When testimony about a “culture of intoxication” at Giants Stadium led to a $110 million jury award for a drunk-driving victim, the verdict made headlines nationwide. Victims'-rights advocates praised the court for holding alcohol vendors accountable for the actions of drunk patrons while defense attorneys criticized its expansive interpretation of state dram-shop law.

In February 2007, however, the New Jersey Supreme Court sent the case back to the superior court for a new trial, denying cert in Verni v. Harry M. Stevens of New Jersey, which was on appeal from the New Jersey appellate division. The appeals court in August 2006 threw out the superior court's verdict and ordered a retrial, citing multiple prejudicial errors by the trial judge.

Most notably, the court ruled the jury was prejudiced because the judge allowed it to consider testimony about the beer-swilling environment at Giants Stadium. Such testimony is irrelevant under New Jersey's Beverage Server Act (BSA), which, like many states' dram-shop laws, limits vendors' liability for claims of negligence to instances of serving a “visibly-intoxicated” person.

While the case sets precedent only for New Jersey, alcohol vendors everywhere welcomed the decision because it creates a blueprint for stripping away prejudicial evidence that can lead to outrageous jury awards in dram-shop cases.

“The appellate division did a good job of discriminating between habit and character evidence,” says Joe Deal, a partner with Cooper Levenson who specializes in alcohol-liability defense. “It acknowledged evidence of rowdy behavior at the stadium, but said that type of character evidence is irrelevant to the central issue of whether the defendants served someone who was visibly intoxicated.”

Multiple Errors

Verni arises from a tragic set of facts. A week before Halloween in 1999, two-year-old Antonia Verni was riding in the back seat of her parents' Toyota Corolla, returning from an outing to a pumpkin patch. Daniel Lanzaro–a self-described binge drinker–swerved his car across a lane of traffic and slammed into the Vernis' Toyota. Antonia's mother, Fazila Verni, was thrown into the back seat and sustained serious injuries that later healed. But Antonia's spine was damaged, rendering her paraplegic.

In a criminal trial, Lanzaro was found guilty of vehicular assault and sentenced to serve five years in prison. Then, in December 2000, Fazila Verni filed a civil suit against the drivers of both vehicles (including her husband) as well as many other defendants, seeking recovery for her injuries and injuries to Antonia. The named defendants included Toyota Motor North America, two bars where Lanzaro admitted drinking after the football game he'd attended, Giants Stadium, its concession vendors (Harry M. Stevens of New Jersey (HMS) and Aramark Services Management), the New York Giants, the NFL, Commissioner Paul Tagliabue and the New Jersey Sports & Exposition Authority.

By the time the trial began in January 2005, all the defendants either settled or were dismissed from the case in summary judgment, except for three–HMS, Aramark and one of the two bars. After a four-week trial, the jury found the defendants liable for serving Lanzaro while he was visibly intoxicated and awarded compensatory and punitive damages totaling more than $135 million–of which the court ordered HMS and Aramark to pay nearly $110 million.

HMS and Aramark appealed to the New Jersey Appellate Division, which found the Verni trial was riddled with errors that led to the huge award. For example, the trial judge erred by instructing jurors they could consider Antonia's reduced life expectancy when calculating quality-of-life damages. He also erred by not allowing jurors to factor settlements the plaintiff reached with other defendants into the final damage award. But the most important error, which prejudiced the jury and invalidated the verdict, occurred in two parts.

First, at the outset of the trial, the court had not determined whether Aramark was protected under the state BSA as an agent of HMS, which held the liquor license for Giants Stadium. Therefore the court allowed testimony about the stadium's rowdy environment, which would have been admissible if Aramark was subject to common law negligence, but was inadmissible under the BSA.

The second part of the judge's error occurred when he failed to instruct jurors to disregard evidence they'd heard about the alleged culture of intoxication at Giants Stadium after he determined that Aramark was an agent of HMS and therefore covered under the BSA. The appellate court said this error prejudiced the jury enough to invalidate the verdict and require a new trial.

“This is a wonderfully worded decision,” Deal says. “It brings the focus on whether the plaintiff can prove the vendor served alcohol to someone who was visibly intoxicated. That historically has been a difficult burden to prove.”

Giant Hangover

Deal says the parties in Verni seem likely to settle the case before a new trial proceeds. But if they don't, plaintiffs will take their cue from the appellate division, and develop evidence about Aramark servers' habits and practices as thoroughly as possible in hopes of maximizing a punitive award.

“At the end of the day we'll have more than enough proof that Mr. Lanzaro was served while visibly intoxicated,” says the Verni family's lawyer, David A. Mazie, senior partner with Mazie Slater Katz & Freeman in Roseland, N.J. “The only thing that's out is evidence about the culture of drunkenness, about people wandering drunk in the stadium. We need witnesses of visibly drunk people being served.”

The plaintiffs' ability to find such witnesses could determine whether the $110 million verdict in the flawed first trial was an anomaly, or within the realm of what an unprejudiced jury will award. Either way, the appellate decision will give dram-shop litigators ammo to keep out irrelevant evidence.