Contributions

Voluntary Intoxication Defense to Contracting: Is Summary Judgment Appropriate in the Casino Context?

by Emi­ly Kaplan1

The casi­no indus­try in the Unit­ed States is thriv­ing. In 2018, con­sumers spent a record $41.68 bil­lion on casi­no gam­ing, a 3.5 per­cent increase from the pre­vi­ous year.2 There are cur­rent­ly 24 states with com­mer­cial casi­nos, and half of them report­ed reach­ing an all-time rev­enue high in the last two years.3 Part of this rev­enue comes in the form of mark­ers, which oper­ate as short-term loans. They enable patrons to gam­ble with mon­ey they have in their bank account, but not in their phys­i­cal pos­ses­sion. Mark­ers are sim­i­lar to checks in that a patron may not sign a mark­er for more than he has in the bank. A casi­no will ensure a patron seek­ing a mark­er has suf­fi­cient funds in his bank account before allow­ing that patron to take out a mark­er, which he must pay if his gam­bling results in loss­es.4 New Jer­sey and Neva­da, states with a sig­nif­i­cant com­mer­cial casi­no pres­ence, allow patrons to take out mark­ers.5

When a casi­no patron signs a gam­bling mark­er with a casi­no, they are enter­ing into a con­tract with that casi­no.6 The patron may, there­fore, raise any com­mon law con­tract defense.7 Of the many exist­ing defens­es enabling a par­ty to avoid a con­tract, the vol­un­tary intox­i­ca­tion defense has gar­nered atten­tion in the casi­no contract—likely because of the asso­ci­a­tion between alco­hol con­sump­tion and gam­bling. In gen­er­al, alco­hol low­ers inhi­bi­tions and impairs judg­ment.8 In the casi­no con­text, alco­hol con­sump­tion has been asso­ci­at­ed with larg­er aver­age bets and a more rapid loss of all ini­tial funds.9 Con­se­quent­ly, casi­nos have ample incen­tive to encour­age their patrons to drink alco­hol. Every com­mer­cial casi­no in this coun­try serves alco­hol in some capac­i­ty, and over half of states with a casi­no pres­ence allow casi­nos to pro­vide com­pli­men­ta­ry alco­hol.10

This inevitably results in intox­i­cat­ed patrons, which in turn enables those patrons to assert the vol­un­tary intox­i­ca­tion defense. If the defense is assert­ed suc­cess­ful­ly, the patron will be excused from pay­ing the mark­er. This Con­tri­bu­tion argues that courts should refrain from resolv­ing cas­es involv­ing vol­un­tary intox­i­ca­tion defens­es at the sum­ma­ry judg­ment stage because sum­ma­ry judg­ment should be grant­ed spar­ing­ly in mat­ters involv­ing state of mind, and because grant­i­ng sum­ma­ry judg­ment in this con­text  cre­ates per­verse incen­tives for casi­nos to over-serve alco­hol to their patrons. In light of court deci­sions rec­og­niz­ing the vol­un­tary intox­i­ca­tion defense in a casi­no con­text, casi­nos should gen­er­al­ly not be able to use sum­ma­ry judg­ment as a tool to prof­it off of poten­tial­ly intox­i­cat­ed casi­no patrons, so long as the patron suc­cess­ful­ly dis­avowed the con­tract.11

In Ander­son v. Lib­er­ty Lob­by, the Supreme Court artic­u­lat­ed that courts must grant sum­ma­ry judg­ment with cau­tion.12 A par­ty is enti­tled to sum­ma­ry judg­ment only if they demon­strate there is “no gen­uine dis­pute as to any mate­r­i­al fact.”13 A dis­pute is “gen­uine” if the “evi­dence is such that a rea­son­able jury could return a ver­dict for the non­mov­ing par­ty,” and a fact is “mate­r­i­al” if it could “affect the out­come of the suit under the gov­ern­ing law.”14 When con­sid­er­ing whether there are gen­uine dis­putes over mate­r­i­al facts, “[t]he evi­dence of the non-movant is to be believed, and all jus­ti­fi­able infer­ences are to be drawn in his favor.”15 When a gen­uine dis­pute regard­ing mate­r­i­al facts exists, the res­o­lu­tion there­of must be left to a fact-find­er.16

A major­i­ty of cir­cuits have con­clud­ed that sum­ma­ry judg­ment is rarely appro­pri­ate where state of mind is at issue.17 In Char­bon­nages de France v. Smith, the Fourth Cir­cuit applied the max­im to a con­tract case, extrap­o­lat­ing that “dis­putes about whether a con­tract has or has not been formed as the result of words and con­duct … are quin­tes­sen­tial­ly dis­putes about ‘state of mind’,” and there­fore refused to grant sum­ma­ry judg­ment.18 The court reached this con­clu­sion because whether state of mind can be deter­mined as a mat­ter of fact—as the Supreme Court in Ander­son requires for a grant sum­ma­ry judgment—will depend on “con­flict­ing infer­ences to be drawn from evi­dence so like­ly to be cir­cum­stan­tial or, if direct, self-serv­ing.”19

The vol­un­tary intox­i­ca­tion defense explic­it­ly involves issues relat­ing to the par­ties’ states of mind. It allows a par­ty who entered into what would have been a legal­ly valid con­tract to avoid the con­tract if the oth­er par­ty knew or had rea­son to know of the intox­i­ca­tion, and the par­ty claim­ing intox­i­ca­tion was either (1) unable to under­stand in a rea­son­able man­ner the nature and con­se­quences of the trans­ac­tion when he signed it, or (2) unable to act in a rea­son­able man­ner in rela­tion to the trans­ac­tion.20 Whether a patron was suf­fi­cient­ly intox­i­cat­ed as to ren­der him inca­pac­i­tat­ed and whether the casi­no knew or had rea­son to know of that inca­pac­i­ta­tion are both ques­tions of fact that should be reserved for a jury in most cas­es.21 This is par­tic­u­lar­ly true in light of the fact that when a casi­no moves for sum­ma­ry judg­ment in these cas­es, all infer­ences must be resolved in favor of the patron.22

Courts should be wary about dis­miss­ing vol­un­tary intox­i­ca­tion defens­es at the sum­ma­ry judg­ment stage for two main rea­sons. First, the prin­ci­ple that sum­ma­ry judg­ment should be grant­ed spar­ing­ly in mat­ters involv­ing state of mind is even more applic­a­ble when intox­i­ca­tion, and knowl­edge of the same, are at issue. Sec­ond, courts grant­i­ng sum­ma­ry judg­ment for casi­nos on vol­un­tary intox­i­ca­tion defens­es cre­ate per­verse incen­tives for casi­nos to over-serve alco­hol to their patrons.

Alco­hol affects dif­fer­ent indi­vid­u­als in dis­tinct ways. Depend­ing on a range of factors—including the consumer’s bio­log­i­cal sex and weight, whether it is mixed with oth­er med­ica­tion, and the way in which it is consumed—a quan­ti­ty of alco­hol that would ine­bri­ate one indi­vid­ual will bare­ly have an impact on anoth­er.23 There­fore, a court will rarely be able to decide as a mat­ter of law whether a casi­no patron was suf­fi­cient­ly intox­i­cat­ed as to ren­der the patron unable to under­stand the nature and con­se­quences of their actions.24 It would be just as dif­fi­cult for a court to deter­mine as a mat­ter of law whether a casi­no had rea­son to know of a patron’s intox­i­ca­tion. Intox­i­cat­ed indi­vid­u­als do not exhib­it uni­form behavior—where some will have dif­fi­cul­ty speak­ing or walk­ing, oth­ers may exhib­it impaired judg­ment or impaired social func­tion­ing.25 Many behav­iors typ­i­cal of intox­i­cat­ed individuals—for instance, inap­pro­pri­ate or aggres­sive behav­ior26—could also be typ­i­cal of a casi­no patron hav­ing a los­ing day. While a fact-find­er could make this rea­son­able infer­ence, they could also come to anoth­er con­clu­sion: the patron in ques­tion was exhibit­ing inap­pro­pri­ate behav­ior because they were so intox­i­cat­ed that they did not under­stand the nature of their actions. Either way, where rea­son­able minds may dif­fer in eval­u­at­ing the evi­dence before them, it should be up to the tri­er of fact to draw con­clu­sions from that evi­dence.27

In addi­tion, pol­i­cy con­sid­er­a­tions weigh against grant­i­ng sum­ma­ry judg­ment on vol­un­tary intox­i­ca­tion defens­es in the casi­no con­text. Casi­nos oper­ate in large part with the mon­ey patrons spend gam­bling. Research demon­strates that intox­i­ca­tion may increase both the length of time patrons spend at gam­ing tables and the amount of time they spend while they are there.28 The log­i­cal con­clu­sion, there­fore, is that casi­nos ben­e­fit from intox­i­cat­ed gam­blers. Con­sid­er­ing that casi­nos in thir­teen states serve com­pli­men­ta­ry alco­hol to patrons,29 casi­nos seem to be aware that the more alco­hol gam­blers drink, the more mon­ey a casi­no will make.

Some may argue that by allow­ing these cas­es to pro­ceed to tri­al, patrons will be able to take advan­tage of casi­nos. Patrons will bet big, keep their mon­ey if they win, and sue if they lose. While not with­out mer­it, this con­cern is unlike­ly to be real­ized. First, there is no evi­dence sug­gest­ing that casi­no patrons track how often and for what rea­sons a court grants or denies sum­ma­ry judg­ment on vol­un­tary intox­i­ca­tion defens­es. If they alter their gam­bling behav­ior, it will like­ly be for oth­er rea­sons. Sec­ond, even if patrons were aware that they may be able to assert a defense that could enti­tle them to keep their mon­ey, pre­vail­ing past the sum­ma­ry judg­ment phase does not guar­an­tee suc­cess at tri­al,30 and lit­i­ga­tion is extreme­ly expen­sive.31

As the law cur­rent­ly stands, there is no dras­tic split with regard to the vol­un­tary intox­i­ca­tion defense: courts in states with a large casi­no pres­ence rec­og­nize it in a casi­no con­text.32 There may be a valid argu­ment for bar­ring the defense in this con­text, but because that is a pol­i­cy deci­sion, sep­a­ra­tion of pow­ers demands that the legislature—not the courts—address the issue. As long as the defense is rec­og­nized, it can­not be mere­ly illu­so­ry. There would be no point in main­tain­ing the defense if casi­no patrons could nev­er actu­al­ly pre­vail on it—or at the very least, make it to tri­al. More­over, because fact find­ers are best sit­u­at­ed to eval­u­ate a party’s state of mind, sum­ma­ry judg­ment should not be grant­ed in these cas­es as the defense impli­cates the state of mind of mul­ti­ple par­ties. Final­ly, should courts exhib­it a will­ing­ness to get rid of cas­es at the sum­ma­ry judg­ment stage where a vol­un­tary intox­i­ca­tion defense is assert­ed, they will enable casi­nos to take advan­tage of their patrons.

1. Emi­ly Kaplan is a J.D. Can­di­date (2021) at New York Uni­ver­si­ty School of Law. This piece is a com­men­tary on the prob­lem pre­sent­ed at the Frank A. Schreck Gam­ing Law Moot Court Com­pe­ti­tion host­ed by the Uni­ver­si­ty of Neva­da, Las Vegas School of Law. The ques­tion addressed whether sum­ma­ry judg­ment on a casi­no patron’s request for a declara­to­ry judg­ment was appro­pri­ate. The views expressed in this arti­cle do not nec­es­sar­i­ly rep­re­sent the views of the author on this point of law. Rather, this arti­cle is a dis­til­la­tion of one side of an argu­ment assigned to the team the author rep­re­sent­ed at the Schreck Gam­ing Law Moot Court Competition.

2. Am. Gam­ing Ass’n, State of the States 2019: The AGA Sur­vey of the Com­mer­cial Casi­no Indus­try 1, https://www.americangaming.org/wp-content/uploads/2019/06/AGA-2019-State-of-the-States_FINAL.pdf [here­inafter State of the States].

3. Am. Gam­ing Ass’n, Fact Sheet to State of the States 2019: The AGA Sur­vey of the Com­mer­cial Casi­no Indus­try, https://www.americangaming.org/wp-content/uploads/2019/06/State-of-the-States-2019-One-Pager.pdf.

4. See Nguyen v. State, 116 Nev. 1171, 1172–73 (2000) (“An appli­cant may receive all or a por­tion of the cred­it­ed amount at a gam­ing table in the form of a ‘mark­er.’ The mark­er … con­tains a stip­u­la­tion where­by the pay­or rep­re­sents that the amount drawn by the mark­er is on deposit in the ref­er­enced finan­cial insti­tu­tion, and that he guar­an­tees pay­ment. The play­er and a casi­no rep­re­sen­ta­tive sign the mark­er. The play­er then exchanges the mark­er for gam­ing tokens or ‘chips,’ which may be exchanged for cur­ren­cy with the casi­no cashier.”).

5. Id.; see also Haki­moglu v. Trump Taj Mahal Assocs., 876 F. Supp. 625, 633 (D.N.J. 1994), aff’d, 70 F.3d 291 (3d Cir. 1995).

6. Haki­moglu, 876 F. Supp. at 633 (“[W]hen a casi­no comes to court to enforce a mark­er debt against a patron, it seeks to enforce a con­trac­tu­al debt.”).

7. Id.; see also Adamar of New Jer­sey, Inc. v. Luber, No. 09-CV-2800 NLH KMW, 2011 WL 1325978 at *3 (D.N.J. Mar. 30, 2011) (“[E]xcessive intox­i­ca­tion is also a viable defense to con­tracts aris­ing between casi­nos and their patrons.”); Lomona­co v. Sands Hotel Casi­no and Coun­try Club, 259 N.J. Super. 523, 530 (N.J. Law Div. 1992) (hold­ing that com­mon law con­tract defens­es such as inca­pac­i­ty apply in casi­no settings).

8. Why Alco­hol Low­ers Inhi­bi­tions, Alcohol.org, (Apr. 8, 2020), https://www.alcohol.org/effects/inhibitions/.

9. Jes­si­ca M. Cronce & William R. Corbin, Effects of Alco­hol and Ini­tial Gam­bling Out­comes on With­in-Ses­sion Gam­bling Behav­ior, Exper­i­men­tal and Clin­i­cal Psy­chophar­ma­col­o­gy, 18(2) (2010) https://www.ncbi.nlm.nih.gov/pmc/articles/PMC3039524/.

10. State of the States, supra note 2 at 8–11.

11. To pre­vail on a vol­un­tary intox­i­ca­tion defense, the par­ty seek­ing to avoid the con­tract must dis­avow it with­in a rea­son­able amount of time upon regain­ing capac­i­ty. Restate­ment (Sec­ond) of Con­tracts § 16 (Am. Law Inst. 1981). This Con­tri­bu­tion will not ana­lyze this com­po­nent of the defense, because it does not car­ry any par­tic­u­lar inter­est or spe­cial sig­nif­i­cance in the casi­no con­text. If a con­tract is not prop­er­ly dis­af­firmed, a patron will not be able to avoid their oblig­a­tion, regard­less of their lev­el of intoxication.

12. 477 U.S. 242, 255 (1986).

13. Fed. R. Civ. P. 56.

14. Ander­son, 477 U.S. at 248.

15. Id. at 255.

16. Id. at 250.

17. See, e.g., Char­bon­nages de France v. Smith, 597 F.2d 406, 414 (4th Cir. 1979) (“Implic­it in these basic rules [of sum­ma­ry judg­ment] is a con­se­quence, fre­quent­ly expressed as a max­im, that sum­ma­ry judg­ment is sel­dom appro­pri­ate in cas­es where­in par­tic­u­lar states of mind are deci­sive as ele­ments of claim or defense.”); Den­ny v. Seaboard Lac­quer, Inc., 487 F.2d 485, 491 (4th Cir. 1973) (“Where state of mind is at issue, sum­ma­ry dis­po­si­tion should be spar­ing­ly used.”); Cro­ley v. Mat­son Nav. Co., 434 F.2d 73, 75 (5th Cir. 1970) (find­ing sum­ma­ry judg­ment inap­pro­pri­ate because rea­son­able minds could dif­fer with respect to whether an employ­er knew a prod­uct was dan­ger­ous, cre­at­ing a ques­tion of fact prop­er­ly reserved for a jury); Empire Elec­tron­ics Co. v. Unit­ed States, 311 F.2d 175, 180 (2nd. Cir. 1962) (col­lect­ing cas­es from the Fifth, Sev­enth, and Ninth Cir­cuits that sup­port the propo­si­tion that courts should be wary of sum­ma­ry judg­ment motions when “ques­tions of motive, intent, and sub­jec­tive feel­ings and reac­tions” are at issue).

18. 597 F.2d 406, 414 (4th Cir. 1979).

19. Id.

20. Restate­ment (Sec­ond) of Con­tracts § 16 (Am. Law Inst. 1981).

21. See Wynn Las Vegas, LLC v. Tofani, No. 69936, 2017 WL 6541827 at *1 (Nev. App. Dec. 14, 2017) (uphold­ing denial of sum­ma­ry judg­ment because evi­dence of intox­i­ca­tion cre­at­ed “mate­r­i­al issues of fact as to whether [the patron] under­stood that a valid con­tract exist­ed” when he signed gam­bling mark­ers); Pierzcha­la v. MGM Grand Detroit, LLC, No. 302874, 2013 WL 2662881 at *1 (Mich. Ct. App. June 13, 2013) (hold­ing that whether a casi­no patron lacked capac­i­ty was a ques­tion of fact); Luber, 2011 WL 1325978, at *5 (con­clud­ing that the ques­tion of whether the casi­no patron was suf­fi­cient­ly intox­i­cat­ed must be left to a jury); Heward v. Sut­ton, 75 Nev. 452, 455 (1959) (“Con­trac­tu­al capac­i­ty is a ques­tion of fact to be resolved in light of the sur­round­ing circumstances.”).

22. See Tolan v. Cot­ton, 572 U.S. 650, 656 (inter­nal quo­ta­tion marks and cita­tion omit­ted) (“In mak­ing that deter­mi­na­tion [whether to grant sum­ma­ry judg­ment], a court must view the evi­dence in the light most favor­able to the oppos­ing party.”).

23. Fac­tors the Affect How Alco­hol is Absorbed & Metab­o­lized, Stan. Univ., https://alcohol.stanford.edu/alcohol-drug-info/buzz-buzz/factors-affect-how-alcohol-absorbed (last vis­it­ed Mar. 16, 2021).

24. For exam­ple, in Adamar of New Jer­sey, Inc. v. Luber, there was no dis­pute that the casi­no patron “received alco­hol bev­er­ages through­out the night when he gam­bled.” 2011 WL 1325978, at *5. There was also no dis­pute that the patron—a noto­ri­ous­ly high roller—was able to place all of his bets, walk nor­mal­ly, and speak coher­ent­ly. Id. at *1, 4. Bear­ing all of this in mind, the court acknowl­edged that it would like­ly be dif­fi­cult for the patron to suc­ceed at tri­al. Nev­er­the­less, and despite the par­ties’ gen­er­al agree­ment on the under­ly­ing facts, the court declined to grant sum­ma­ry judg­ment against the patron because the “infer­ences to be drawn from that evi­dence” var­ied, and con­se­quent­ly “must be deter­mined by the fact-find­er and not this Court.” Id. at *5.

25. Alco­hol Intox­i­ca­tion, Am. Psy­chol. Ass’n Dic­tio­nary of Psy­chol., https://dictionary.apa.org/alcohol-intoxication (last vis­it­ed Mar. 16, 2021).

26. Id.

27. See Cro­ley, 434 F.2d at 75 (“Even when the facts under­ly­ing the issue of neg­li­gence are undis­put­ed, the issue must still be sub­mit­ted to the jury if rea­son­able men could reach dif­fer­ent con­clu­sions and infer­ences from those facts.”).

28. See Cronce, supra note 9 (“[A]lcohol use may con­tribute to longer dura­tion of gam­bling episodes and increased amount of mon­ey spent.”).

29. State of the States, supra note 2 at 8–11.

30. See Ander­son, 477 U.S. at 249–50 (“[T]he issue of mate­r­i­al fact… to enti­tle a par­ty to pro­ceed to tri­al is not required to be resolved con­clu­sive­ly in favor of the par­ty assert­ing its exis­tence.”) (inter­nal cita­tion and quo­ta­tion marks omitted).

31. The medi­an cost of lit­i­ga­tion in a typ­i­cal breach of con­tract claim is $91,000. See Paula Han­naford-Agor & Nicole L. Waters, Esti­mat­ing the Cost of Civ­il Lit­i­ga­tion, case­load high­lights (Nat’l Ctr. for State Courts), Jan. 2013, at 7, https://ncsc.contentdm.oclc.org/digital/collection/civil/id/94.

32. See e.g., Haki­moglu, 876 F. Supp. at 633; Tofani, 2017 WL 6541827 at *1–3.