Baatz v. Arrow Bar (1988)

Supreme Court of South Dakota · 1988 · Corporations

426 N.W.2d 298 (S.D. 1988)

Updated August 22, 2026

Corporationsdram shop liabilitynegligence per seretroactivityseparation of powersopen courtsSDCL 35-4-78SDCL 35-11-1

Facts

Kenny and Peggy Baatz alleged they were seriously injured when a drunk driver, Roland McBride, crossed the center line of a Sioux Falls street and struck them. They claimed Arrow Bar served alcoholic beverages to McBride while he was already intoxicated and that this further contributed to his intoxication and to their injuries. The Baatzes filed their action against Arrow Bar in 1984. In 1985, after the suit had been filed, the legislature enacted SDCL 35-11-1 and amended SDCL 35-4-78 to attempt to eliminate civil liability of licensees for such injuries.

Issue

Whether the plaintiffs' dram shop-type negligence action under SDCL 35-4-78, as recognized in Walz v. City of Hudson, could be defeated by the 1985 legislation, and whether Walz applied to this case even though the accident predated Walz.

Rule

A judicial decision interpreting an existing statute as establishing a safety standard and negligence per se applies both retrospectively and prospectively unless limited otherwise, especially where it does not overrule settled statutory law but recognizes a duty already contained in the statute. A statute will not operate retroactively absent clearly expressed legislative intent, and a legislature cannot effectively abolish a negligence action grounded in an unrepealed statutory duty by declaring proximate cause or civil nonliability, because determining proximate cause and civil liability in individual cases belongs to courts and juries. South Dakota's open-courts provision and SDCL 20-9-1 preserve a right to a remedy against wrongdoers, though the legislature may impose only reasonable constitutional restrictions.

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One of 10 multiple-choice questions for this case. Pick an answer to see why.

In Rapid City, Nora Kim was injured in 1980 when a driver allegedly left Red Mesa Tavern after being served while obviously intoxicated. Nora sued the tavern in 1983 under a preexisting state statute that prohibited licensees from serving obviously intoxicated persons, and the state supreme court had interpreted that statute in 1982 to make its violation negligence per se.

If the tavern argues the 1982 decision cannot apply because Nora's injury occurred before that decision, which result is most consistent with the governing rule?

Explanation. The majority reasoned that when a court construes an existing safety statute as establishing negligence per se, the duty comes from the statute itself, not from the date of the judicial opinion. Thus the interpretation applies retrospectively as well as prospectively unless otherwise limited. The bar owner's lack of notice of the later case does not defeat liability because the statute already prohibited the conduct.