Bernhard v. Harrah’s Club
Citation: 16 Cal. 3d 313 (1976)
Facts
A California resident drove to Harrah’s Club in Nevada and was served alcohol until intoxicated, then drove back to California and caused an accident injuring Bernhard. California had a Dram Shop Act imposing liability on vendors who serve intoxicated customers; Nevada did not. The question was whether California’s Dram Shop Act applied to a Nevada tavern owner.
Issue
Should California’s Dram Shop liability statute apply to a Nevada tavern that served alcohol to a California resident who then caused an accident in California?
Holding
Yes. California law applies. California had a strong interest in applying its Dram Shop Act to protect California residents from drunk drivers who begin their drive in Nevada. Nevada’s lack of such a law reflected its permissive policy for its own taverns — but Nevada had no interest in protecting Nevada taverns from California’s safety regulations when the harm occurred in California.
Rule
Comparative impairment (California): California applies its law when: (1) California has an interest in applying its law, and (2) the other state’s interest would not be significantly impaired by non-application of its law. Nevada’s policy permitting service of intoxicated customers was designed for Nevada’s own economic interests; applying California’s more stringent rule to conduct affecting California residents does not significantly impair Nevada’s legitimate policy goals.
Significance
- Leading California case applying comparative impairment to out-of-state tortfeasors
- Established that California’s Dram Shop Act has extraterritorial reach when the harm occurs in California
- Demonstrates how courts use comparative impairment to resolve true conflicts in favor of the forum when the foreign state’s interest would be minimally impaired