Alabama Supreme Court Nixes Tribal Immunity for Casino in Dram-Shop Case

By | May 27, 2014

An Alabama casino lost any tribal immunity from dram-shop lawsuits when it agreed as part of the state licensing process that it would be financially responsible for damages in serving alcohol to an apparently intoxicated person.

The Alabama Supreme Court in a May 23 ruling denied the immunity claim of the Poarch Band of Creek Indians in a case involving a 2011 accident. Victims in the accident sued PBCI claiming its Creek Casino Montgomery had furnished the driver with alcoholic beverages knowing that he was visibly intoxicated.

Alabama’s dram-shop law holds establishments liable for damages resulting from serving alcohol to an intoxicated patron.

PBCI claimed immunity based on its tribal status. The trial court denied the immunity claim, finding that PBCI’s decision to obtain dram-shop insurance as a condition of receiving a liquor license for its Creek Casino Montgomery constituted an express waiver of any immunity from suit based on a violation of the state’s dram shop law.

The plaintiffs argued that since PBCI was required to maintain dram-shop insurance for the defense of any claim against it, it could not then claim immunity in a civil action that triggered the insurance protection. Plaintiffs claimed that granting immunity would nullify the insurance provision of the state’s liquor law that PBCI agreed to as part of its licensing.

The Supreme Court came to the same conclusion as plaintiffs that the casino had waived its tribal immunity but it arrived there through a slightly different route.

The Supreme Court said that the purchasing of insurance itself does not constitute a waiver of immunity, noting that tribes purchase workers’ compensation insurance yet are still subject to claims by injured workers.

However, the court said, PBCI did waive its immunity when it signed the agreement with the state’s alcohol licensing board that it would be financially responsible for damages in serving alcohol to an apparently intoxicated person.

“PBCI cannot both assume financial responsibility for compensating victims of its own wrongdoing and at the same time disclaim its responsibility for providing such compensation. An agreement to be financially responsible is an express declaration that excludes, i.e, waives, the alternative of being financially irresponsible. Otherwise the assumption of financial responsibility would be meaningless,” wrote Chief Justice Roy Moore for the court.

In 2013, the Oklahoma Supreme Court came to a different conclusion in a dram-shop case, ruling that the Peoria tribe did not waive its immunity by agreeing to the terms of the state alcohol licensing process.

The Alabama Supreme Court decision is below: