Georgetown University Law Center
Examination in Law and Economics: Selected Topics
(2 Hours)


Professor Avery Katz
December 17, 1992

Instructions:

1. This is an open book exam. Any written materials may be consulted.

2. There are two questions, which will receive equal weight in the grading. I recommend that you spend a portion of the suggested time for each question planning and organizing your answer. If you feel that any of your answers depend on facts not detailed in the question, you should state clearly any additional assumptions you are making.

3. If you are writing the exam by hand, please write legibly. Please begin each essay in a separate examination book.

4. I will read material that appears on the scrap paper if you indicate in the examination book that you wish me to, but not otherwise.

5. Good luck on the exam, and for those of you graduating at the end of the term, best wishes. I will be returning to the University of Michigan Law School next semester, but please feel free to call or write me there.

This exam consists of pages. Please be sure your exam is complete.


Please do not turn the page until the proctor gives the signal.

Georgetown University Law Center
Examination in Law and Economics: Selected Topics
(2 Hours)

Professor Avery Katz
December 17, 1992

Read the attached case, Burkhart v. Harrod, 110 Wash. 2d 381, 755 P.2d 759 (1988), and then write an essay on each of the following two questions. You should read the questions before you read the case. You are welcome in your essay to develop the specific issues discussed in the opinion, or to raise related ideas of your own.


Question 1 (1 hour): What answer does the economic analysis of law suggest for the policy issue raised by the case --- whether social hosts should be held liable for damages caused by the intoxication of the persons they serve?


Question 2 (1 hour): Suppose that the judges in this case had been strongly confident in the assessment that extending liability to social hosts, under the circumstances of the case and others like it, would have the ultimate effect of lowering the total social costs associated with preventing and insuring against accidents resulting from intoxication. Would this have justified them in finding the defendant liable? If not, would such a belief, by itself, justify a state legislator in voting for a statute imposing such liability?

OPINION: Durham, J.

Under this state's common law, commercial furnishers of alcohol who serve "obviously intoxicated" customers can be held liable for damages caused by that intoxication. We are asked to extend this principle to impose liability on hosts of social parties who provide alcohol for their guests. We decline to do so. If social host liability is to be imposed in Washington, it should be done through the Legislature which has greater ability to fully explore the spectrum of competing societal interests.

I

Michael Burkhart was to have been the best man at the wedding of Charles and Denise Bonfante. On July 21, 1985, Burkhart participated in a wedding rehearsal and then attended the dinner party that followed. The party was held at the house of the groom's sister and brother-in-law, Suzanne and Gary Harrod. Burkhart arrived with the other guests between 2 and 2:30 p.m. For the first half hour, Gary Harrod mixed drinks for the guests, and thereafter the bar was open for guests to mix their own drinks. Available at the bar were wine, beer, scotch, bourbon, vodka and assorted nonalcoholic beverages. According to all seven affidavits filed by members of the groom's family, Burkhart consumed "a few" alcoholic drinks during the day, but he never appeared intoxicated. Dinner was served at 4:30 p.m. Most of the guests left at 6:30, but Burkhart stayed to watch the opening of wedding gifts and to help clean up. Burkhart drank at least one beer during the cleanup.

Around 9 p.m., the bride and groom left the party and drove to the groom's house. Burkhart followed them part of the way on his motorcycle, but then stopped at a store while the bride and groom continued on. A motorist later noticed that Burkhart was operating his motorcycle aggressively and erratically. A short time later, around 10 p.m., Burkhart's motorcycle left the roadway and struck a power pole, killing him instantly. At the time of the accident, Burkhart's blood alcohol content was .16 percent.

Linda Sue Burkhart, Michael's wife, brought a wrongful death action against the Harrods for negligently furnishing alcohol to an obviously intoxicated person. The trial judge granted summary judgment to the Harrods, holding that there is no social host liability in this state. We affirm.

II

This court has adopted the common law rule that furnishers of alcohol are not liable for damages caused by the intoxication of the persons they serve. The common law rule, however, has exceptions, so that an action will still lie if alcohol is furnished to a person who is obviously intoxicated, helpless, or in a special relationship to the furnisher of the alcohol. These principles recently have been reaffirmed.

Liability has been imposed under these rules to commercial hosts and to quasi-commercial hosts, i.e., those who did not sell alcohol but who otherwise had business interests in furnishing alcohol to their guests. However, this court never has held that a purely social host can be liable for furnishing alcohol.

There are strong arguments both for and against social host liability. Proponents point first of all to the need to compensate victims injured by drunk drivers. Additionally, social host liability arguably could reduce the frequency of drunk driving by requiring hosts to use greater care in serving alcohol at social gatherings.

On the other hand, opponents stress the potentially substantial financial liability that social hosts would face, as well as the heavy burden that would be placed on social hosts to regulate guests' alcohol consumption. This duty to regulate the drinking of others would raise a series of problematic questions for social hosts. How is a social host, inexperienced at judging the extent to which others have become intoxicated, to decide the course of his own actions? Must the host determine if a guest has been drinking before arriving at the party? Can the host determine if a guest is drinking on an empty stomach? What if a guest is taking prescribed medication or using illegal drugs? Must the host count the number of drinks that each guest consumes? Is it necessary to gauge a guest's weight and height in order to determine allowable amounts of alcohol? May guests be allowed to mix their own drinks, or should the host tend the bar himself to monitor consumption? Must the host refrain from drinking in order to better supervise the guests? Must the host determine which of its guests will be driving home? Before guests depart, should the host conduct sobriety tests, asking them to recite the alphabet or walk a straight line? If an intoxicated guest insists on driving home, how far can the host go in preventing him from doing so? Must he offer to pay for a taxi or put the guest up for the night? As one court has noted, the implications of social host liability are "almost limitless".

The nature of the judicial role prevents us from capably deciding the relative merits of social host liability. Evaluating the overall merits of social host liability, with its wide sweeping implications, requires a balancing of the costs and benefits for society as a whole, not just the parties of any one case. Yet because judicial decisionmaking is limited to resolving only the issues before the court in any given case, judges are limited in their abilities to obtain the input necessary to make informed decisions on issues of broad societal impact like social host liability. . . .

III

. . . Additionally, the implications of social host liability are so much more wide sweeping and unpredictable in nature than are the implications of commercial host liability. While liability for commercial providers affects only a narrow slice of our population, social host liability would touch most adults in the state on a frequent basis. Because social hosts are generally unaccustomed to the pressures involved in taking responsibility for the intoxication of their guests, we cannot predict how well social hosts would respond when the scope of their duties would be so ill defined. It is also difficult to estimate the effect that social host liability would have on personal relationships. Indeed, judicial restraint is appropriate when the proposed doctrine, as here, has implications that are "far beyond the perception of the court asked to declare it." . . .

For all these reasons, we decline to extend common law liability to social hosts. This is not to say, however, that social host liability is necessarily an inappropriate reaction to the problem of drunk driving. Rather, we hold only that the judiciary is ill equipped to impose such a remedy . . .

END OF EXAM
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