Commerce Committee Report – Week 13, 2018

SF 2169 – Alcoholic beverages licensee liability. 



SF 2169 limits the liability of an alcoholic beverage license or permit holder for certain alcohol-related injuries, commonly known as Dram Shop. Currently, the holder, regardless of whether the license or permit was issued by the Iowa Alcoholic Beverages Division (ABD) or by the licensing authority of any other state, is liable for all damages caused by an intoxicated person if the holder served alcohol to them when the holder knew or should have known the person was intoxicated, or who sold to and served the person to a point where the holder knew or should have known the person would become intoxicated. Under the bill, damages are available to an innocent third party, and a license or permit holder is liable only if the establishment sold and served beer, wine or intoxicating liquor directly to the intoxicated person, provided the person was visibly intoxicated at the time of sale or service. The damages available to an innocent third party from a licensee or permittee would be limited to $75,000 for claims involving injury to a person or property, and to $100,000 for claims involving loss of means of support or loss of services, companionship, society or consortium resulting from the death or injury of a person.

The House amended the bill on a vote of 61-36. In addition to clarifying that the “third party” is not the third party who was intoxicated and caused the accident, the House amendment:

  • Removes the $75,000 and $100,000 cap language and adds a cap of $250,000 in a civil action for each plaintiff, unless a jury determines that there is a substantial or permanent loss or impairment of a bodily function, substantial disfigurement or death, and the jury finds that such limitation would deprive the plaintiff of just compensation for injuries sustained.
  • Directs ABD to conduct a study every two years to evaluate minimum coverage requirements, including a comparison of Dram Shop requirements in other states, other relevant issues, and ABD findings and recommendations. The first report to the Legislature is due January 31, 2019.
    [4/4: Concur 32-17 (No: Allen, Bisignano, Bolkcom, Boulton, Costello, Dvorsky, Hogg, Horn, Jochum, D. Johnson, Lykam, Mathis, McCoy, Petersen, Quirmbach, Ragan, Taylor)]