ED Legal Correspondent Larry Kaplan examines how weak policies, a lack of training, poor documentation and unprepared testimony can devastate a club in his final Legal Panel recap.
(Note: This article appears in the January issue of ED Magazine.)
During the “Club Operator on Trial” Legal Panel at the 2025 EXPO, panelist Barry Covert’s final deposition covered liquor liability and substance control, stressing how serving minors, over-serving patrons or missing drug activity can trigger huge judgments and criminal charges. The case concerned an underage customer who was served eight beers in two hours and caused a fatal crash within minutes of leaving the club.
Caricatured mock club owner Will King began by evasively responding to the question of whether he had consumed any alcohol before his deposition. “You mean today, like water? It’s a relative question,” he asserted.
King confirmed he was familiar with the fatal May 5, 2023, incident involving patron Chad Parker, but admitted no internal investigation was conducted. He also confirmed he was the Custodian of Records for that date. King said three guards were on duty—two licensed and one unlicensed, filling in at the last minute—and acknowledged this violated New York statutes, remarking, “I guess.” On surveillance, he noted cameras were in place but was unsure if tapes were reviewed or preserved, adding, “I think so.”
King described security training as minimal: “Here’s your flashlight… try not to drink too much.” Alcohol service staff were liquor-certified, with a policy of “We don’t [serve intoxicated patrons],” but intoxication was judged informally—“You can usually see it”—and no staff had formal training. On serving minors, he joked, “Don’t serve the kids… that’s insane,” yet admitted ID checks were left to “bouncer’s discretion” with no scanner, log or photo records.
King confirmed that receipts documented serving at least eight bottles of Stella Artois to Parker over roughly two hours. He denied that staff observed any signs of intoxication, even though he knew after the fact that Parker’s blood alcohol content was 0.21—“I guess that’s the math”—and that Parker was underage and involved in a fatal crash shortly after leaving the premises.
King said the drug policy was simply, “No drugs,” and explained recognition relied on anecdotal methods, such as “Jimmy with the fanny pack stays out of the club—that’s how.” He recalled maybe seeing drugs at the club once before and noted firing the staff member involved. Regarding May 5, he acknowledged reports that Parker appeared “red-eyed and jumpy,” and that a bartender claimed to have seen him snorting cocaine in the bathroom before telling him to leave.
King also confirmed that Parker purchased two beers in the VIP room from dancers, a violation of both club policy and New York liquor laws. He acknowledged the illegality by stating, “That is what ChatGPT told me.”
To avoid situations like this, clubs can utilize these essential practices to safeguard themselves against liquor and drug-related claims.
Documented procedures and training
Panelist Covert opened his analysis of the deposition by calling the scenario “a landmine” and stressing recurring themes: solid policies, procedures and practices. He urged ongoing, recorded training for new staff, saying, “The more you can prove that you have policies and procedures in place, the better you’re going to be in all these lawsuits.”
Covert warned that cases involving injuries, fatalities or minors—especially with two Dram Shop violations like “an obviously intoxicated patron leaving the premises” and “a minor being served—require airtight procedures. With illegal drug use added, he cautioned, “If anybody’s utilizing illegal narcotics, you have to have these policies and procedures, or you will be destroyed.”
“You have to try to make sure you have enough insurance in place,” he added. “Because the verdicts have been astronomical in these types of cases,” citing damages from pain, suffering, death and lost future economic value.
“The more you can prove that you have policies and procedures in place, the better you’re going to be in all these lawsuits.”
— Barry Covert
Deposition preparation
Covert acknowledged that while depositions can be intrusive, they require preparation and skilled legal support. “If your client shows up at a deposition as Mr. King just did… you’re gonna get slaughtered in any lawsuit.”
Panelist Edinger added to Covert’s statement, stressing deposition readiness. “It is essential that you meet with your attorney before you do the deposition, so that your head is in the right space,” noting even experienced witnesses need proper preparation. He warned that opposing counsel is “not your friend” and may be “like a religious Crusader, intending to punish you and try to shut you down.”
Edinger said witnesses should expect irritating questions about “your educational background, where you grew up, where you went to high school,” and that their lawyer should discuss them in advance so that the witness doesn’t become riled up. He noted modern depositions are often on Zoom and video recorded. “You don’t want to have the presentation that Will did where… you’re squirming and talking back, and you’re mouthy.” His advice: prepare with your attorney so “the jury won’t hate you when they see you on videotape.”
Understand local laws
Panelist Shafer warned, “Don’t get complacent because you think these Dram Shop laws may not apply to you.” He noted some clubs are in states without such laws, and others are BYOB. Yet, both can be liable. “We’re representing a BYOB club where plaintiff lawyers are trying to establish new law regarding the imposition of liability… for the liquor that a customer brings in and consumes.”
Shafer warned that owners cannot ignore excessive drinking just because the customer brought the alcohol. “Don’t think you can… just let this guy… drink 18 bottles of liquor and let him go out and drive, and you think you’re okay.” He reminded operators of a legal maxim. “Bad facts make bad law.” Allowing obvious misconduct, he explained, can make you “the first one to be held liable under a change of law.” His bottom line: “Policies and procedures, that’s what you need.”
“It’s a piece of paper I could hold up and say, ‘here’s the rule in the club, and they followed it.’ If you don’t do that, it’s much harder to defend.”
— Will King
Enforced policies
Panelist Will King offered the operator’s perspective, beginning with a direct recommendation. “Develop some policies, talk to your lawyer, keep them updated and follow them.” He stressed that policies are worthless if they are not implemented. “They don’t matter if the entertainers have never seen them… They don’t matter if the security guys have never seen them.”
King explained that written rules are powerful in court. “It’s a piece of paper I could hold up and say, ‘Here’s the rule in the club, and they followed it.’ If you don’t do that, it’s much harder to defend.” He also spoke frankly about the burden of serving as a corporate representative. “Being a corporate representative sucks because you have to do all kinds of homework. You have to meet with your lawyer, but it’s important.” Reflecting on his own performance, King admitted giving equivocal answers like “I don’t know,” “maybe” and “possibly,” warning that such responses “just open you up to a second deposition.” His advice: “Try to get as well prepared for a corporate representative deposition as you can.”
The panel’s message was clear—enforced policies, thorough training, documented procedures, careful deposition preparation and adequate insurance coverage are essential. Whether facing existing Dram Shop laws or innovative legal theories, operators must eliminate “bad facts” before they ever get to court. Running a legally defensible club means being proactive, disciplined and ready for the most challenging questions under oath.
Please note that this article provides a brief summary of complex legal issues and should be used for general informational purposes only. It is not intended to provide an exhaustive analysis of these matters or any specific legal advice or recommendation. Laws vary by state and municipality. The positions and opinions expressed by the attorneys represented here are theirs alone and do not necessarily reflect those of ED Publications. Club operators and others are strongly encouraged to consult their attorneys and other professionals for specific advice on how these issues will affect their businesses and what measures to take. Larry Kaplan and ED Publications do not guarantee the accuracy of this information.
Larry Kaplan is a broker of adult nightclubs and retail stores, a principal in the Strategic Club Consultants training entity and the Executive Director of the ACE of Michigan adult nightclub state trade association. For 25 years, he has served as legal correspondent for ED Publications. Contact him at 313-815-3311 or larry@kaplanclubsales.com.
Barry N. Covert is a trial lawyer with 30+ years of nationwide success in liquor liability, criminal defense, zoning, constitutional and cybercrime cases. Contact him at 716-849-1333 or bcovert@lglaw.com.
Gary S. Edinger is a partner at Benjamin, Aaronson, Edinger and Patanzo, PA. His practice focuses primarily on First Amendment litigation. Contact him at 353-338-4440 or gsedinger12@gmail.com.
Will King, a senior attorney at McDowell Hetherington LLP, represents adult clubs nationwide in First Amendment challenges, regulatory matters and employment disputes. Contact him at 713-221-3840 or william.king@mhllp.com.
Brad Shafer has represented adult entertainment businesses exclusively, nationwide, including before the U.S. Supreme Court, for 40+ years, and is the leading defender of dancer employee/independent contractor cases. Contact him at 517-886-6560 or brad@bradshaferlaw.com.
