Do Gas Stations Owe a Duty to Abstain from Selling Gas to Drunk Customers?

July 26, 2022 • Source: Rhodes, Hieronymus, Jones, Tucker & Gable, PLLC

Duty is crucial to the tort of negligence. The existence of a duty is the foundational element of a negligence claim that alerts potential defendants on how they must act to avoid liability. “Duty constrains and channels human behavior in a socially responsible way before the fact, and it provides a basis for judging the propriety of behavior thereafter. David Owen, Duty Rules, 54 Vand. L. Rev. 767 (2001). The assessment of duty balances the interests of potential victims against the interests of actors, evaluating societal harm versus individual freedom. Thus, when legislators establish a duty or courts assess the existence of a duty, they provide “an important screening mechanism for excluding types of cases that are inappropriate for negligence adjudication.” David G. Owen, The Five Elements of Negligence, 35 Hofstra L. Rev. 1671, 1675 (2007). When a duty does not exist to guide potential defendants’ conduct, negligence claims against the alleged conduct are barred or severely limited. Id.

Dram Shop Liability is Limited to the Sale or “Furnishing” of Alcohol

Dram shop is a legal term referring to a commercial establishment that furnishes alcoholic beverages. The term originates from 18th century Britain, where alcoholic beverages were traditionally sold by the dram, an English unit of liquid. Eric J. Handelman, Proof of Tavern Keeper’s Liability Under Dram Shop Act, 137 Am. Jur. Proof of Facts 3d 195 (2013). A majority of states have adopted dram shop statutes, but the scope of who may be held liable, who may sue, or what conduct is impermissible varies among jurisdictions. Steven M. Gursten, Theories of Liability and Fault, 1 Handling Motor Vehicle Accident Cases 2d § 1:28. Generally, dram shop rules allow a plaintiff to hold a commercial establishment liable that provided a visibly intoxicated individual with alcohol when the intoxicated individual later causes harm on the roadway. Richard Smith, A Comparative Analysis of Dramshop Liability and a Proposal for Uniform Legislation, 25 J. Corp. L. 553, 557 (2000). Some states have extended dram shop liability to commercial establishments that sell to minors; other states have gone even further than sales and allow social hosts to be held liable who “furnish” alcohol to visibly intoxicated individuals or who knowingly provide access to alcohol to minors. Id. at 560-62. While dram shop liability may vary in form among the states, one element of the tort is uniform, the substance of alcohol. Dram shop liability has not yet extended further than the sale or “furnishing” of any substance other than alcohol. Id. at 557.

Jurisdiction Determines Whether a Duty Exists

While the issue of whether a gas station owes a duty to abstain from selling fuel to intoxicated customers does not possess a breadth of case law, a few states have addressed the issue. For jurisdictions that have adopted Section 7 of the Restatement (Third) of Torts (Am. L. Inst. 2010), the New Mexico Supreme Court case, Morris v. Giant Four Corners, Inc., may be persuasive. 498 P.3d 238 (N.M. 2021).

In Morris, a heavily intoxicated driver ran out of gasoline while driving under the influence and walked to a gas station to refuel his vehicle. Id. at 241. Both the driver and his passenger were observed as clearly intoxicated. The driver purchased a gallon of water to serve as a gas can and a gallon of gas from the gas station clerk, who initially refused to sell gasoline to the driver based on his level of intoxication. Id. at 241-42. The driver and his passenger then walked to their vehicle and drove back to the gas station to purchase an additional nine gallons of gasoline. After returning to the highway, the drunk driver crossed the centerline and collided with an oncoming vehicle whose driver was killed upon impact. Id. at 242.

The deceased driver’s estate filed a wrongful death suit, which included a claim against the gas station for negligent entrustment of chattel. Id. at 242. The United States District Court for the District of New Mexico granted the gas station’s motion for summary judgment, declining to find that the gas station owed the deceased driver a duty “to refrain from selling gasoline to an allegedly intoxicated driver.”Id. The deceased driver’s estate appealed to the United States Court of Appeals for the Tenth Circuit, which certified the question to the New Mexico Supreme Court. Id.

The New Mexico Supreme Court overruled the district court’s judgment, finding that under New Mexico law, a commercial gasoline vendor owes a duty to third parties using the roadway “to refrain from selling gasoline to a driver the vendor knows or has reason to know is intoxicated.” Id. at 253. The Court based its decision on public policy considerations, including a review of the legislative intent of New Mexico’s dram shop liability statute to limit intoxicated driving. Id. at 248. The Court also evaluated Section 390 of the Restatement (Second) of Torts, which specifically applies to the doctrine of negligent entrustment:  

One who supplies directly or through a third person a chattel for the use of another whom the supplier knows or has reason to know to be likely because of his youth, inexperience, or otherwise, to use it in a manner involving unreasonable risk of physical harm to himself and others whom the supplier should expect to share in or be endangered by its use, is subject to liability for physical harm resulting to them.

Restatement § 390 (Am. L. Inst. 1965). Applying this section, the Court could not identify a significant difference “between a duty not to give an intoxicated person the keys to a vehicle and a duty to refrain from giving an intoxicated person gasoline to drive that vehicle.” Id. at 250. Addressing concerns of widespread applicability, the Court elaborated that instances where a gas station may not have the opportunity to observe a gasoline purchaser or instances involving unattended gas stations were questions of foreseeability, which New Mexico courts reserve for juries. Id. at 252. New Mexico has adopted Section 7 of the Restatement (Third) of Torts (Am. L. Inst. 2010), which states that ordinarily one “has the duty to exercise reasonable care when determining the actor’s conduct creates a risk of physical harm.” Consequently, the Court noted in the beginning of its analysis that it does not consider foreseeability when assessing the existence of a duty. Id. at 243.  

For jurisdictions that rely on a foreseeability analysis to determine the existence of a duty, the Oklahoma Court of Civil Appeals case, Snow v. TravelCenters of America LLC, Case No. 119143 (Okla. Civ. App. Jul. 12, 2022), may be persuasive.  In Snow, an intoxicated driver stopped at a gas station to refuel, and the gas station attendants observed that the driver appeared intoxicated but still proceeded with the sale of gasoline. Id. at ¶ 3. Almost four hours later in a different town, the intoxicated driver lost control of his vehicle and veered off the road, striking and killing a grandmother and her grandchild, who were both standing in the grandmother’s front yard. Id.

The estate of the deceased brought a civil lawsuit against the gas station for negligence and negligent entrustment. Id. at ¶ 5. The District Court of Oklahoma County granted the gas station’s motion to dismiss, finding that “gas stations owe no duty to abstain from selling gas to drunk customers.” Id. at ¶ 7. The estate of the deceased filed a motion to reconsider, which the district court overruled. The estate of the deceased appealed this judgment to the Oklahoma Court of Civil Appeals. Id. at ¶ 11.

The Oklahoma Court of Civil Appeals affirmed the district court’s judgment, holding that the Oklahoma legislature had not codified a duty to refrain from selling gasoline to intoxicated customers through an extension of dram shop liability, the creation of a separate tort claim, or by the adoption of the Restatement (Third) of Torts. Id. at ¶ 56-58. The Court reasoned that a close connection of conduct and injury, moral blame of the alleged conduct, and foreseeability assist in determining the existence of a duty. The significant lapse of time and distance between the sale of gasoline and the injury, as well as “the absence of moral blame in the legal sale of motor fuel” argued against the imposition of a duty. Id. at ¶ 38-39.

After examining Section 314A and B of the Restatement (Second) of Torts, which lists the special relationships sufficient to impose a duty, the Court determined that the relationship between gas stations and third parties unrelated to the sale of gasoline does not constitute a special relationship which would impose a duty. Id. at ¶ 41. The Court reasoned that while it is foreseeable that a drunk driver may cause harm while driving under the influence, in the absence of a special relationship between the gas station and the third party who suffered an injury from the drunk driver’s actions, gas stations do not owe a duty to protect a third party by refusing to sell gasoline to drunk customers. Id. at ¶ 40. The Court further elaborated that the gas station’s failure to act, or failure to refuse to sell gasoline to an intoxicated customer, did not violate a general duty to protect others from harm or criminal conduct because this duty does not exist absent a special relationship. Id. at 38, 40, 42. To reach this conclusion, the Court relied on Section 314 of the Restatement (Second) of Torts, which provides: “The fact that the actor realizes or should realize that action on his part is necessary for another’s aid or protection does not of itself impose upon him a duty to take such action.” The Court additionally relied on Section 315, which states: “There is no duty so to control the conduct of a third person as to prevent him from causing physical harm to another.” Consequently, because no duty exists in Oklahoma for gas stations to refrain from selling fuel to drunk customers, the Court affirmed the district court’s dismissal of the lawsuit. Id. at ¶ 60. 

Affirmative Acts May Alter the Existence of a Duty

Where a duty may not have been found originally in the sale of fuel to an intoxicated customer, a duty may arise when the gas station takes an affirmative action during the fuel transaction. In West v. East Tennessee Pioneer Oil Company, the Tennessee Supreme Court held that gas station employees owed a duty of reasonable care to third parties on roadways after they sold gasoline and assisted in fueling the vehicle of an obviously intoxicated driver. 172 S.W.3d 545 (Tenn. 2005). In West, an obviously intoxicated customer entered a gas station attempting to purchase alcohol. The gas station attendant refused to sell him alcohol because he appeared intoxicated. The intoxicated customer then paid for gas and left to refuel his vehicle. Id. at 548. The intoxicated customer could not operate the pump, so two gas station employees assisted the customer in fueling his vehicle. The drunk driver then exited the gas station without turning on his headlights and drove into the wrong lane of traffic. Less than three miles away from the gas station, the drunk driver collided head-on with a vehicle, seriously injuring both passengers. Id. at 548-49.

The injured passengers filed a civil lawsuit against the gas station, alleging that the gas station employees were negligent in selling gasoline to an obviously intoxicated driver and assisting him in fueling his vehicle. The Tennessee Circuit Court granted the gas station’s motion for summary judgment, holding that the gas station owed no duty to the injured passengers to refrain from selling gasoline to the intoxicated customer and that the sale of gasoline was not the proximate cause of the passengers’ injuries. Id. at 549. The Tennessee Court of Appeals affirmed the trial court’s judgment on two of the injured passengers’ claims, but reversed the trial court on the negligence claim, determining that “the affirmative acts of [the] employees in both selling gasoline to and in helping a visibly intoxicated [customer] pump the gasoline into his vehicle created a duty to act with care.” Id. at 549-50. The gas station filed for a review of the appellate court’s decision, which the Tennessee Supreme Court granted. Id. at 550.

The Tennessee Supreme Court affirmed in part the Tennessee Court of Appeals decision, holding that the affirmative acts of the gas station employees did create a legal duty. Id. at 556. The Court reasoned that a legal duty is a legal obligation “to conform to a reasonable standard of care for protection against unreasonable risks of harm.” Id. at 551. If a risk is foreseeable, the Court uses a balancing approach to determine if the probability and gravity of harm posed by the alleged conduct “outweigh the burden upon the defendant to engage in alternative conduct that would have prevented the harm.” Id. The Court refused to analyze whether a special relationship existed between the gas station and the injured passengers that would create a duty and instead focused on the gas station employees’ affirmative acts that contributed to the creation of foreseeable harm. With the general knowledge that drunk driving causes accidents, the Court weighed the burden of the gas station employees’ refusal to sell gas to an intoxicated driver or to assist him in fueling his vehicle against the strong likelihood of an injury resulting from drunk driving. Id. The Court concluded that gas station employees owe a duty to refrain from selling gasoline to intoxicated customers and to refrain from assisting intoxicated customers with fueling their vehicles. Addressing the essential element of foreseeability, the Court further analyzed that a gas station employee must have actual knowledge or reasonable indication of intoxication to establish a duty to refrain from selling gasoline, and whether or not the gas station employee was actually aware or reasonably informed of the drunk customer’s intoxicated state would be a fact question for a jury to determine. Id. at 552.

Conclusion

While case law for this issue remains limited, and state legislatures have not yet created a separate tort claim independent of dram shop liability for vendors who sell gasoline to intoxicated customers, plaintiffs may still seek the deeper pockets of gasoline vendors to finance their claims. Whether a gas station owes a duty to abstain from selling gas to drunk customers will depend on the jurisdiction and whether the gas station has performed an affirmative act during the fuel transaction that would assist a drunk customer in driving while under the influence.

Sources

David Owen, Duty Rules, 54 Vand. L. Rev. 767 (2001).

David G. Owen, The Five Elements of Negligence, 35 Hofstra L. Rev. 1671 (2007).

Eric J. Handelman, Proof of Tavern Keeper’s Liability Under Dram Shop Act, 137 Am. Jur.         Proof of Facts 3d 195 (2013).

Richard Smith, A Comparative Analysis of Dramshop Liability and a Proposal for Uniform         Legislation, 25 J. Corp. L. 553 (2000).

Steven M. Gursten, Theories of Liability and Fault, 1 Handling Motor Vehicle Accident Cases    2d § 1:28.

Nark is a Partner with Rhodes Hieronymus in Oklahoma. He concentrates his practice on Medical Mal-Practice Defense, Hospitality and Retail Defense, Specialty Panel Insurance Defense, Insurance Subrogation, Commercial Litigation, and Mold Litigation.

Kerry Lewis is a Partner with Rhodes Hieronymus in Oklahoma.  His primary emphasis involves trial and appellate litigation with experience in a variety of areas, including insurance coverage, bad faith, complex litigation, and professional malpractice matters. Mr. Lewis has been the primary brief writer in more than 30 appeals.

Nathan and Kerry would like to give special thanks to Lyric Clark, Law Student, for her superb assistance with this article.