MASS AUDIENCE VENUES

1. MASS AUDIENCE VENUES How To Responsibly Sell And Serve Alcohol In A Large Venue, And The Consequences Of Failing To Do So by Richard M. Blau, Esq. Chair, GrayRobinson’s Alcohol Industry Team

2. Traditional methods of responsible vending are not completely effective: Traditional methods include TIPS, AST and ServSafe; But Servers have limited oversight or even contact with large venue consumers; Multiple points of access; Law of large numbers means greater likelihood of mistakes. MASS AUDIENCE CHALLENGES

3. MASS AUDIENCE CHALLENGES Greater incidence of unlawful BYOB. Patrons smuggle in booze to avoid paying stadium pricing; Underage consumers smuggle in booze to consume illegally. Greater security challenges Alcohol always comes with the attendant risk of unruly patrons; Mass audiences amplify that risk; Even one tenth of one percent of consumers getting unruly becomes problematic when the venue holds 100,000 –imagine 100 cantankerous and pugilistic drunks to deal with in three hours).

4. CONSIDER RECENT LAWSUITS In just the last few years, a lot has happened in terms of Mass Audience Venue Liability: • Giants Stadium jury verdict hit Aramark for actual PLUS punitive damages exceeding $100+ Million; • Arizona Diamondback’s Stadium litigation threatened liability despite the intervening bar; • Madison Square Gardens litigation over the consequences of a drunk off-duty policeman.

5. “Since the christening of TCF Stadium, the Board of Regents’ alcohol policy has cost the University $1 million.” The Minnesota Daily Last year, Minnesota state lawmakers passed a bill mandating a “beer for all or none” policy at the University of Minnesota’s ’s new stadium, a move seen by many as unnecessary. Lawmakers overruled the Board of Regents, which originally voted in favor of selling alcohol in premium seating sections only, a total of five percent (5%) of the entire stadium capacity. Nevertheless, the Regents decided to ban alcohol sales altogether after the Legislature passed the law, holding with the NCAA’s recommendation which discourages colleges and universities from selling any alcohol at athletic competitions. The result was a situation that denigrated the stadium Club and Box suite experience, made those assets harder to market, and ultimately cost the University an estimated $1 million in revenue that the school desperately needs.

6. WHAT IT TAKES TO SURVIVE ELEMENTS FOR A SUCCESSFUL, RESPONSIBLE ALCOHOL POLICY FOR MASS AUDIENCE VENUES

7. SPECIAL RESPONSIBILITIES IMPOSED ON ALCOHOL RETAILERS • The alcohol laws, especially given the fact that most were written shortly after the repeal of Prohibition in 1933, generally require licensed retail vendors to consummate face-to-face sales with the consumer at the licensed premises. • Unlike most other consumer goods, alcohol generally cannot be sold to minors OR any adult who is under 21 years of age. • No sales other than to end-use consumers (no sales for resale). • No sales to obviously intoxicated consumers. • No consumer is legally allowed to drive an automobile with a BAC greater than 0.08. • Extraordinary auditing and record-keeping obligations associated with tax collection and remittance responsibilities.

8. SUCCESFUL & RESPONSIBLE RETAILING IS EASIER SAID THAN DONE Ambiguity over legal responsibility and liability • Personal responsibility vs. negligence; • Foreseeability vs. duty to unknown 3rd party (he wasn’t obviously drunk, but he had three beers in an hour and a set of car keys). Mandatory face-to-face sales on the premises vs. mass audiences • Server-consumer ratio does not support traditional responsible vending models; • Costs of comprehensive responsible vending training for hundreds of part-time servers is problematic. Sophisticated fake I.D.s • Scanners at every beer tap?

9. HOW HAS THE LAW DEALT WITH THESE SPECIAL CHALLENGES TO DATE?

10. “The System” Is Doing Something Right The most recent findings from The National Survey on Drug Use and Health (NSDUH) support the basic trends from four other large national surveys that track reductions in teen drinking. The 2008 NSDUH data found: "Binge alcohol" use by 12-17 yr-olds declined from 10.7% in 2002 to 8.8% in 2008, a 17.8% drop-off in the "binge" rate. During the same period, "heavy alcohol use" - 5 or more drinks on a single occasion 5+ times in the past 30 days - declined by 20%. Heavy use by young males declined by 25%. Just 2% of 12-17 yr-olds are heavy drinkers. Stretching the definition to include 18-20 year olds, the binge use rate declined nearly 10% over the last 6 years and the heavy use rate declined by 11.3%. Rates of "current use" - at least one drink in the past 30 days - declined significantly among 14-17 year olds over the last 6 years. Among 14-15 yr olds there was a 21% drop in the current drinking rate. Among 16-17 yr-olds the drop off was just below 20%. Among 18-20 yr-olds there was a modest 4.5% drop. SOURCE: Substance Abuse and Mental Heal Health Services Administration, "Results from the 2008 National Survey on Drug Use and Health: National Findings," (Office of Applied Studies, NSDUH Series H-36, HHS Publication No. SMA-4434), Rockville Maryland, September 2009.

11. DEFENSE AGAINST FAKE I.D.S Making and selling a fake ID is a felony in many states, punishable by up to $10,000 in fines and 3 years in prison. However, challenges continue to frustrate the legal system’s ability to deal with fake I.D.s States are improving their use of advanced technologies to thwart fakes made using Photoshop and similar desktop publishing tools; HOW HAS THE LAW DEALT WITH THESE SPECIAL CHALLENGES TO DATE?

12. However, Local prosecutors are hesitant to prosecute criminally, in lieu of diversion programs; Civil claims against fake I.D. users stymied by local/parental pressures, as well as the specter of unrecoverable legal costs. HOW HAS THE LAW DEALT WITH THESE SPECIAL CHALLENGES TO DATE?

13. AIM INITIATIVE TO AID DUI CASES • The AIM initiative requires a driver to blow into a BAC monitor before the car will start. • Ignition interlock laws are in place in 45 states and the District of Columbia for repeat DUI offenders. • Currently mandated for all first-time DUI offenders in 10 states as a result of a proactive campaign by MADD and other advocacy groups. • AL, AR, AZ, HW, IL, LA,NE, NM, • UT and WA • In most states, AIMs can be ordered as a license restriction on second and subsequent DUI/DWI offenses or for a refusal of a chemical test under the implied consent law. Unlike vehicle seizure, AIM is tied to a person's operating privilege rather than to a particular vehicle. Drivers pay for installation! • AIMs can be ordered for any length of time from one year to the maximum available revocation period for the offense.

14. IMPLEMENTATION OF DUI COURTS • Recognized and supported by Mothers Against Drunk Driving (MADD), the Governor’s Highway Safety Association (GHSA), and the Highway Safety Committee of the International Association of Chiefs of Police (IACP) as a useful tool against impaired driving, DWI courts are becoming a staple in the criminal justice system. Showing promising results on recidivism, the growth of these courts across the nation is gaining momentum. • In 2004 there were 176 DWI courts—86 designated DWI and 90 “hybrid” drug/DWI courts. (Hybrid drug/DWI courts started as drug courts, then added a separate track or docket for DWI offenders.) • As of December 31, 2007, there were 110 designated DWI courts and 286 hybrid drug/ DWI courts for a total of 396. That is a 233% increase in three years. • Huddleston, Marlowe, and Casebolt, 2007; Huddleston et al., 2004).

15. HOW HAS THE LAW DEALT WITH THESE SPECIAL CHALLENGES TO DATE? LEGAL LIABILITY • Dram shop is a term of art in the U.S., referring to a bar, tavern or other licensee where alcohol beverages are sold. Traditionally, it referred to a shop where spirits were sold by the “dram,” a small unit of liquid. • Dram shop liability refers to the body of state law governing the liability of taverns, restaurants, night clubs, liquor stores, casinos and every other licensed establishment that sells or serve alcohol beverages. • Generally, dram shop laws establish the liability of establishments arising out of the sale of alcohol to visibly intoxicated persons or minors who subsequently cause death or injury to third-parties—those not having a relationship to the bar, as a result of alcohol-related car crashes and other accidents.

16. DRAM SHOP LAW LIABILITY • All states make selling alcohol to a minor illegal, and most prohibit sale to a habitual drunkard or an obviously intoxicated person. • But not all allow states allow the consumer to sue the provider for subsequent damages incurred by the consumer as a result of the consumption • In fact, numerous state dram shop laws immunize the licensed provider so long as the consumer is not a minor or a drunk.

17. DRAM SHOP LAW LIABILITY • The big question for most hospitality industry members is whether their service to somebody who goes out and causes harm to a THIRD party gives rise to third party liability. • Even where statute suggests (or SAYS) “No,” liability may arise. • Constructive knowledge cases (knew or should have known); • Negligence cases (irresponsible retailing).

18. DRAM SHOP & NEGLIGENT SERVICE • Judicial cases reflect developing (and continuing) fluctuations in liability standards. • Some state courts adhere to rigid application of statutory standards. • But in other states, courts use negligence to push and expand dram shop liability restrictions adopted by legislatures.

19. LAST YEAR’S EXAMPLE OF JUDICIAL OVER-COMPENSATION GONE WILD Nesbitt v. Bauer 969 A.2d 1122, 198 N.J. 601, N.J. Supreme Court May 7, 2009.

20. Verni v. Lanzaro New Jersey Giants Stadium litigation hit Aramark with a $135 Million state court judgment (actual + $75M punitive damages) in a personal injury case where an intoxicated football fan who was served several beers at the game ultimately arrested for DUI after hitting another car and paralyzing a young girl for life. The defense argued that Aramark did nothing wrong. Witnesses said that the company has a two-beer limit and trains its employees to spot problems and refuse to serve those that are intoxicated. The plaintiffs responded to that argument by calling a toxicologist to testify that, with a blood alcohol level that was twice the legal limit at the time of the accident, there was little doubt Lanzaro would have showed signs of intoxication when he bought the beers at halftime. In fact, Lanzaro himself testified that he was slurring his speech by halftime and his brother and sister-in-law testified that they noticed he was showing signs of being intoxicated at halftime. Similar personal injury and wrongful death lawsuits are pending across the US, as plaintiff’s counsel challenge responsible vending practices used at mass audience venues.

21. Wallace v. Levy’s Restaurants, et al. Plaintiffs in Phoenix, Arizona sued the stadium concessionaire where Arizona Diamondbacks play, after a baseball fan had a few beers, subsequently went to a bar for more drinking, THEN got behind a wheel and killed people. Despite the dram shop laws on the books, Arizona Supreme Court has ruled that the retailer can besued if it acted “negligently.” See Andrews ex rel. Woodard v. Eddie's Place, Inc., 16 P.3d 801 (Ariz.App. Div. 2, 2000) citing Ontiveros v. Borak, 667 P.2d 200 (1983) (“[T]hose who furnish liquor have an obligation or “duty” to exercise care for the protection of others. This is an obligation imposed upon tavern owners for the benefit of those who may be injured by the tavern owners' patrons, whether such injury occurs on or off the premises. We find that duty both as a matter of common law and of statute.”)

22. Zeylaya v. Madison Square Garden, L.P. The suit naming the Garden and its parent company, Cablevision Systems Corp., alleged that concessions workers at the Garden continued to sell alcohol to a visibly intoxicated off-duty police officer who later crashed his SUV and killed a two-year-old boy named Jose Carlo Zelaya and has left his mother in a coma. The police officer's Jeep Cherokee rear-ended the car in which the boy was riding; the driver’s blood-alcohol level was more than three times the legal limit. Now-former Jersey City police officer Kevin Freibott is also named in the suit, as is Stitch Bar & Lounge, a bar located a few blocks from the arena. The suit alleges the bar also served Freibott while he was intoxicated, before he attended a basketball game at The Garden. Freibott, who had a history of driving offenses dating back to the mid-1980s, pled guilty to vehicular homicide and was fired from the force. He was sentenced to 11 years in prison and must serve nearly seven years before he's eligible for parole.

23. WHAT ARE MASS AUDIENCE VENUE OPERATORS DOING?

24. CURRENT EXAMPLES Serving and Consumption of Alcohol • STAPLES Center and its food and beverage concessionaires have adopted an alcohol policy that is designed to protect Guests and the community from alcohol-related incidents. • Guests are expected to obey all state and local laws governing the purchase, possession, and consumption of alcohol. It is illegal for anyone under the age of 21 to consume alcoholic beverages. In addition, the following items are to be noted: • Alcoholic beverages will not be served in containers larger than 16 ounces • There shall be a maximum limit of two alcoholic beverages sold to each Guest, per purchase • All Guests who appear to be younger than the age of thirty-five (35) will be asked to show positive identification prior to being served alcoholic beverages • STAPLES Center reserves the right to eject anyone under the age of twenty one (21) who is observed to be consuming alcohol on the premises or who appears to be visibly intoxicated • STAPLES Center and its food and beverage concessionaires will implement ongoing responsible alcohol management training sessions for its serving staff. • At NBA events, service of alcohol will stop when the official game clock indicates 12-minutes until the end of the game. Intoxicated Guests STAPLES Center reserves the right to deny entry to intoxicated guests. Any intoxicated Guests causing a disturbance during an event will be asked to leave the facility and may be subject to arrest.

25. CURRENT EXAMPLES ALCOHOL POLICIES Guests who attend events at Red Bull Arena expect to have a good time.  As such, it is our duty to ensure that those guests who drink alcoholic beverages do so responsibly.  The following is a list of alcohol policies instituted at the Arena:· Guests will not be permitted to bring alcoholic beverages into the Arena.· Guests will not be allowed to enter the Arena if they appear to be intoxicated.· Limit of (2) alcoholic beverages per possession.· By New Jersey State law, alcoholic beverages are not vended in the seating areas.· All guests must provide valid proof of age.· Alcohol sales are shut off at the 55th minute of soccer matches or earlier at management’s discretion.· For other events including concerts and sporting events, Arena management will determine the shut off time on a case by case basis.· Drunk and disorderly behavior as well as violation of any alcohol policy will result in ejection from the Arena without refund and could result in the loss of season tickets.

26. INNOVATIVE PROGRAMS D.C. United Seeks Fans to Film Public Service Announcement D.C. United fans had their first opportunity to serve as spokespeople for responsible behavior at their home game against the Chicago Fire at RFK Stadium on Saturday, April 17. D.C. United, Anheuser-Busch and TEAM Coalition are partnering to educate fans about the importance of using a designated driver, buckling up and demonstrating positive fan behavior. The message is simple: "Always Have a Designated Driver.“ Fans must first make the Responsibility Has Its Rewards (RHIR) pledge to: • Always have a designated driver • Never drive drunk • Always buckle up Those fans will have the opportunity to tape their own message about responsible behavior at the game. Public service announcements produced from the taping will air throughout the season on the RFK Stadium video board and on local broadcast TV. In addition, the video clips will be e-mailed to participants so their moment of fame can be shared with family and friends.  Fans who pledge at RFK Stadium and demonstrate responsible behavior also have a chance to be selected as the D.C. United Designated Driver for the Season. Those fans may win either a trip to MLS Cup 2010™ on Nov. 21, 2010 or the 2011 MLS All-Star Game™.

27. INDUSTRY STANDARD? TEAM Coalition Recommendations for Venue Alcohol Policies The policies presented are recommendations approved by the TEAM Coalition Board of Directors and member organizations. These policy recommendations represent the best practices of sports facilities across the country, representing Major League Baseball, the National Basketball Association, the National Football League, and the National Hockey League. TEAM encourages every sports facility to establish and enforce policies that ensure the safety and enjoyment of the experience for their fans. Neither TEAM nor its member organizations mandate these recommendations.1. Sports and entertainment facilities in the US (both professional and university) should: • Train both concessions and operations employees in an alcohol management training program; • Set an employee policy to always use safety belts when driving; • Post signs in their parking facilities reminding guests to always buckle up;

28. INDUSTRY STANDARD? 2. TEAM venues should provide at least one designated driver booth: • Fans that sign up to be designated drivers must present a valid drivers license proving they are over 21 years of age • Designated drivers should sign an agreement pledging to: • Not drink alcohol while at the stadium • Take responsibility for driving home their friends and family who have been drinking • Ensure that everyone wears safety belts

29. INDUSTRY STANDARD? • TEAM venues should set policies regarding the purchase and consumption of alcohol, the policies below represent the average of all sports venues participating in TEAM • Alcohol sales cut off time: • MLB: end of 7th inning • NFL: end of 3rd quarter • NBA: end of 3rd period • NHL: end of 2nd period • ID policy: 30 and younger • Maximum number of beers per purchase: 2 beers • Maximum serving size per beer: 20 oz • Denial of outside beverages into the facility

31. CHALLENGES TO SOLVE We must reassess how we serve alcohol Stationary taps vs. in-the-aisle hawkers – no more “Beer Guys!” Use of TSA-style hand-held ID/license scanners. Limit one reasonably-sized drink per purchase; Only Approved Products may be consumed. Review pricing structures to avoid claims that the venue is pushing “quantity discounts” for larger size purchases (the “Bucket O’ Beer”). Last call before the end of the event, to allow time for acclamation. Safe Ride home rather than ejection of intoxicated patrons.

32. WHERE ARE WE HEADED? HOW WILL THE LAW HANDLE THESE CHALLENGES IN THE FUTURE?

33. On March 11, 2010 the United States Patent and Trademark Office (USPTO) issued Patent Number: 20100062134 Inventors: Melvin; David Hart; (Toronto, CA) ; Irvine; John David; (Oakville, CA) The invention may utilize the ingredients of bulk frozen desserts with the addition of alcohol. The invention is stable at retail and home freezer situations. The formulation and manufacture of the single phase product is different from bulk frozen desserts as well as other alcohol containing frozen products. The result is a product that maintains the desired individuality of the pellets while maintaining structure, such that fusing is inhibited at the storage and serving temperature. Alcohol Based “Dippin’ Dots” Frozen Dessert Product

34. ENHANCING DEFENSES AGAINST FAKE I.D.s New technologies and innovative practices by retailers will help defeat Fake I.D.s, including: holographic imaging; biometrics; database embedding; TSA-style handheld scanners; rewards programs for employees who turn in fake I.D.s; civil litigation plans to pursue claims against users. HOW WILL THE LAW DEAL WITH THESE CHALLENGES IN THE FUTURE?

35. HOW WILL THE LAW DEAL WITH THESE CHALLENGES IN THE FUTURE? DEALING WITH DUIs • DUI Courts will become standard in all 50 states; • MADD will succeed in expanding a program of mandatory AIMs for first-time DUI offenders from current 10 states to all or nearly all 50 states; • Initiatives will be funded by the federal government to encourage, and then mandate, the installation of AIMs as standard equipment in all new automobiles sold in America. • Efforts will continue to lower the BAC standard for DUI from 0.08 to 0.05.

36. HOW WILL THE LAW DEAL WITH THESE CHALLENGES IN THE FUTURE? APPORTIONING LEGAL LIABILITY Plaintiffs’ counsel will continue to try and circumvent the limitations of dram shop laws via negligence pleadings. A new cottage industry will arise around excessive service based on the 0.08 BAC threshold for DUI, rather than the traditional “obviously intoxicated” standard.

37. THE FINAL SOLUTION

38. THE FINAL SOLUTION Ultimately, the proper balance between personal responsibility and licensee liability will be struck when biometric technology and the dynamics of private enterprise together produce an affordable tissue spectroscopy (or other technology) solution for determining a precise, accurate, instantaneous, and non-intrusive determination (whether by gauging a consumer’s BAC, scanning their retinas; reading the tactile perspiration of their skin, etc) for purposes of determining, with conclusive certainty, whether someone is “intoxicated.”

39. THE FINAL SOLUTION All retailers, on-premises and off-premises, will apply this solution to all purchasers/ consumers of alcohol beverages. In return for properly performing these prophylactic diagnostics as a condition of alcohol sale or service, compliant licensees will be provided immunity from legal liability for the consumer’s alcohol-related damages.