The Explainer: Brief Primer on Alcohol Liability for South Carolina Restaurants/Bars

by Christian Stegmaier
cstegmaier@collinsandlacy.com

Restaurants and bars have competing interests regarding the sale of alcohol. On one hand, sale of alcohol can be very profitable; however, on the other hand, it can create tremendous liability, which in turn incentivizes them to moderate both the promotion and the sale of alcohol.

The sale of alcohol is intensely regulated by the government. In South Carolina, a bar or restaurant must possesses a license to sell alcohol in an on-premises manner. The Department of Revenue regulates the sale of alcohol. The State Law Enforcement Division (SLED) has primary enforcement responsibility. It works with local law enforcement to enforce the laws. As a general rule, the government shows very little leniency when it comes to the regulation of the sale of alcohol.

A license to sell alcohol can be revoked or suspended for violation of the alcohol laws. Additionally, license holders can be fined for violations.

In South Carolina, it is against the law to: sell to underage patrons and persons who are visibly intoxicated.

S.C. Code Ann. § 61-4-50 states:

(A) It is unlawful for a person to sell beer, ale, porter, wine, or other similar malt or fermented beverage to a person under twenty-one years of age. A person who makes a sale in violation of this section, upon conviction:

(1) for a first offense, must be fined not less than two hundred dollars nor more than three hundred dollars or imprisoned not more than thirty days, or both; and

(2) for a second or subsequent offense, must be fined not less than four hundred dollars nor more than five hundred dollars or imprisoned not more than thirty days, or both.

(B) Failure of a person to require identification to verify a person’s age is prima facie evidence of the violation of this section.

(C) A person who violates the provisions of this section also is required to successfully complete a DAODAS approved merchant alcohol enforcement education program. The program must be a minimum of two hours and the cost to the person may not exceed fifty dollars.

S.C. Code Ann. § 61-4-580 states:

No holder of a permit authorizing the sale of beer or wine or a servant, agent, or employee of the permittee may knowingly commit any of the following acts upon the licensed premises covered by the holder’s permit:

(1) sell beer or wine to a person under twenty-one years of age;

(2) sell beer or wine to an intoxicated person;

(3) permit gambling or games of chance except game promotions including contests, games of chance, or sweepstakes in which the elements of chance and prize are present and which comply with the following:

(a) the game promotion is conducted or offered in connection with the sale, promotion, or advertisement of a consumer product or service, or to enhance the brand or image of a supplier of consumer products or services;

(b) no purchase payment, entry fee, or proof of purchase is required as a condition of entering the game promotion or receiving a prize; and

(c) all materials advertising the game promotion clearly disclose that no purchase or payment is necessary to enter and provide details on the free method of participation.

(4) permit lewd, immoral, or improper entertainment, conduct, or practices. This includes, but is not limited to, entertainment, conduct, or practices where a person is in a state of undress so as to expose the human male or female genitals, pubic area, or buttocks cavity with less than a full opaque covering;

(5) permit any act, the commission of which tends to create a public nuisance or which constitutes a crime under the laws of this State; or

(6) sell, offer for sale, or possess any beverage or alcoholic liquors the sale or possession of which is prohibited on the licensed premises under the law of this State; or

(7) conduct, operate, organize, promote, advertise, run, or participate in a “drinking contest” or “drinking game”. For purposes of this item, “drinking contest” or “drinking game” includes, but is not limited to, a contest, game, event, or other endeavor which encourages or promotes the consumption of beer or wine by participants at extraordinary speed or in increased quantities or in more potent form. “Drinking contest” or “drinking game” does not include a contest, game, event, or endeavor in which beer or wine is not used or consumed by participants as part of the contest, game, event, or endeavor, but instead is used solely as a reward or prize. Selling beer or wine in the regular course of business is not considered a violation of this section.

In commercial settings, South Carolina appellate courts have held that a statute criminalizing the sale of beer or wine to a person under the age of 21 and one providing regulatory penalties for the knowing sale to a person under 21 places a duty on a commercial vendor. A vendor who violates this duty and sells to a person under 21 may be liable to the unlawful purchaser, and to third parties harmed by the purchaser’s consumption of the alcohol. Whitlaw v. Kroger Co., 306 S.C. 51, 410 S.E.2d 251 (1991).

Our courts have also imposed third party liability on the holder of an on-premises sales and consumption license who violated an alcoholic beverage control regulation by permitting an underage person to consume alcoholic beverages on the holder’s premises. E.g., Norton v. Opening Break of Aiken, Inc., 313 S.C. 508, 443 S.E.2d 406 (Ct.App.1994).

South Carolina does not recognize a “first party” cause of action against the tavern owner by an intoxicated adult predicated on an alleged violation of the alcohol control statutes; however, as noted above, there exists “third party” liability. This means the person injured by the wrongful acts of a patron who was knowingly overserved or was underaged can sue the establishment in tort for the injuries he/she sustained. With regard to an overserved partron (who was 21 or older), a commercial host is liable only to third parties injured by an intoxicated adult guest, and then only when he knowingly sells alcoholic beverages to an intoxicated person.