Bernhard v. Harrah's Club
16 Cal.3d 313, 546 P.2d 719, 128 Cal. Rptr. 215 (1976)
Premium Feature
Subscribe to Lexplug to listen to the Case Podcast.
Rule of Law:
In a true conflict of laws situation, the court will apply the law of the state whose governmental interest would be more impaired if its law were not applied. A state's interest in imposing civil liability on tavern keepers extends to out-of-state businesses that actively solicit that state's residents as customers.
Facts:
- Harrah's Club, a Nevada corporation, owned and operated gambling establishments in Nevada where it sold intoxicating liquors.
- Harrah's Club advertised in California and solicited the business of California residents, expecting them to use California highways to travel to and from its Nevada establishments.
- On July 24, 1971, California residents Fern and Philip Myers drove from California to Harrah's Club in Nevada in response to its solicitations.
- Harrah's Club employees served the Myers numerous alcoholic beverages, continuing to serve them even after they became obviously intoxicated and incapable of safely driving.
- While driving back to California in their intoxicated state, the Myers' car, driven by Fern Myers, crossed the center line on a California highway.
- The Myers' car collided head-on with a motorcycle driven by Richard A. Bernhard, a California resident, causing him severe injuries.
Procedural Posture:
- Richard A. Bernhard sued Harrah's Club in a California trial court.
- Harrah's Club filed a general demurrer to Bernhard's first amended complaint, arguing Nevada law should apply and that it barred the claim.
- The trial court sustained the demurrer without leave to amend.
- The trial court entered a judgment of dismissal in favor of Harrah's Club.
- Bernhard, as appellant, appealed the judgment of dismissal to the Supreme Court of California.
Premium Content
Subscribe to Lexplug to view the complete brief
You're viewing a preview with Rule of Law, Facts, and Procedural Posture
Issue:
Does California's rule imposing civil liability on tavern keepers for injuries caused by intoxicated patrons apply to a Nevada tavern that solicits California business, when the patrons became intoxicated in Nevada but caused injury to a California resident in California?
Opinions:
Majority - Sullivan, J.
Yes, California's rule imposing civil liability applies. When the laws of two states are in direct conflict and both states have a legitimate governmental interest in the application of their law, a 'true conflict' exists. This conflict should be resolved by applying the law of the state whose interest would be more impaired if its law were not applied. California's interest is to protect the public from injuries caused by intoxicated persons, and this interest is particularly strong when a California resident is injured on a California highway. Nevada's interest is to protect its tavern keepers from ruinous civil liability. Because Harrah's Club actively solicited California residents, it purposefully availed itself of the California market, and California's interest in protecting its citizens would be significantly more impaired by applying Nevada's rule than Nevada's interest would be by applying California's rule. Furthermore, civil liability can be imposed under California's common law principles of negligence, independent of any specific statutory violation.
Analysis:
This decision formally adopted the 'comparative impairment' approach as the methodology for resolving 'true conflicts' in California's choice-of-law analysis. It moves beyond simply identifying conflicting state interests to a deeper analysis of which state's policy would be more substantially undermined if it were not applied. This precedent significantly expands the potential liability of out-of-state businesses that solicit customers from California, subjecting them to California's regulatory and tort law regime. The ruling also clarifies that the common law duty of care articulated in Vesely v. Sager is not dependent solely on a statutory violation, but is grounded in broader principles of negligence.
