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Senate committee hears bill to revise alcohol liability standards

John Iverson, lobbyist for the Montana Tavern Association, speaks in support of Senate Bill 107 during a Business, Labor and Economic Affairs Committee meeting. (Photo: MPAN)
John Iverson, lobbyist for the Montana Tavern Association, speaks in support of Senate Bill 107 during a Business, Labor and Economic Affairs Committee meeting. (Photo: MPAN)
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An effort is underway in the Montana Legislature to lower the cost of alcohol liability insurance for bars and hospitality businesses.

On Tuesday morning, Senate Majority Leader Steve Fitzpatrick (R-Great Falls) presented Senate Bill 107 before the Senate Business, Labor and Economic Affairs Committee.

His plan is to focus legal standards and specify what a bar owner or hospitality business can get sued for.

“The Montana Supreme Court just issued a decision, and it’s not one that I really agree with, that you could bring a premise liability claim for overserving. Premise liability is for conditions of property. It’s for slipping on ice. It’s not for overserving,” said Fitzpatrick.

Fitzpatrick says the bill would make it so only establishments that served a visibly intoxicated consumer could be liable for injuries caused as a result of the serving.

“People often have their first sip of the evening at a sample room if a distiller is in town,” said Jennifer Hensley, speaking on behalf of the Montana Distillers Guild. “It’s part of the tourism experience, it’s a way to meet the local ag producers and manufacturing agents of the community. And then they go onto frequent the establishments that make up the retail sector of Montana’s alcohol industry. But because they get a sip of alcohol at the distillery sample room, we’re looped in if they just make some poor choices down the line, whether or not they remember those choices. So we stand in support of this bill to help everyone in this industry have a more clear-headed approach to the topic.”

The bill would also prevent a jury from weighing certain types of testimony.

“Think about this -- how is a server supposed to know what your hypothetical blood alcohol level is?” Fitzpatrick asked. “There’s no way they can do that. We don’t take blood tests at the bar door.”

If passed, noneconomic damages, such as pain and suffering, would be capped at $250,000 for each event. For the plaintiff to receive punitive damages, the standard of actual malice would need to be proved.

Proponents of the bill included representatives from numerous organizations, including the Liquor Store Owners Association of Montana, the Montana Brewers Association, the National Association of Insurance and Financial Advisors, the Gaming Industry Association of Montana.

“We’ve hired some very, very bright people to help us with this. And what we said is we don’t want to get greedy. We don’t want to protect irresponsible operators. We don’t want to protect reckless operators,” said John Iverson, a lobbyist for the Montana Tavern Association. “But what we want to do is create a marketplace that is available for good operators to access. While still creating an opportunity for if there was a reckless operator, they could still be sued and those people that are injured could be made whole. That’s the goal of this bill.”

There were two opponents of the bill at the hearing, one of which argued it might not actually decrease insurance rates at all.

“I’d really like to see a letter on insurance company stationary that says if you pass this legislation we will drop our rates,” said Al Smith, executive director for the Montana Trial Lawyers Association. “It ain’t gonna happen. Never has happened. Insurers don’t do it that way.”

The hearing on SB 107 concluded after over 70 minutes. The committee meets again on Wednesday, Thursday and Friday of this week.

We’ll follow this bill and let you know what happens.

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