Note.

Section 33 of chapter 80 of the 1967 Session Laws repealed title 5 of the North Dakota Century Code. This section specifies that the provisions of chapter 80 shall replace the provisions of title 5 of the North Dakota Century Code. Therefore the provisions of chapter 80 of the 1967 Session Laws have been placed in title 5 of the North Dakota Century Code and supersede any of the provisions of title 5 which were in effect prior to July 1, 1967.

CHAPTER 5-01 General Provisions

5-01-01. Definitions. [For taxable periods beginning after June 30, 2021]

In this title:

  1. “Alcohol” means neutral spirits distilled at or above one hundred ninety degrees proof, whether or not such product is subsequently reduced, for nonindustrial use.
  2. “Alcoholic beverages” means any liquid suitable for drinking by human beings, which contains one-half of one percent or more of alcohol by volume.
  3. “Beer” means any malt beverage containing one-half of one percent or more of alcohol by volume and includes an alcoholic beverage made by the fermentation of malt substitutes, including rice, grain of any kind, glucose, sugar, or molasses, which has not undergone distillation.
  4. “Bottle or can” means any container, regardless of the material from which made, having a capacity less than a bulk container for use for the sale of malt beverages at retail.
  5. “Direct shipper” means a person that is licensed by the commissioner and ships or causes to be shipped alcoholic beverages directly into this state to a consumer for the consumer’s personal use and not for resale.
  6. “Distilled spirits” means any alcoholic beverage that is not beer, wine, sparkling wine, or alcohol.
  7. “In bulk” means in containers having a capacity not less than one-sixth barrel for use for the sale of malt beverages at retail.
  8. “Licensed alcohol carrier” means a person licensed to transport or deliver alcoholic beverages to a consumer without first having the alcoholic beverage delivered through a wholesaler licensed in this state.
  9. “Licensed logistics shipper” means a person that provides fulfillment house services, including warehousing, packaging, distribution, order processing, or shipment of alcoholic beverages on behalf of a licensed direct shipper and by way of a licensed alcohol carrier.
  10. “Licensed premises” means the premises on which beer, liquor, or alcoholic beverages are normally sold or dispensed and must be delineated by diagram or blueprint which must be included with the license application or the license renewal application.
  11. “Liquor” means any alcoholic beverage except beer.
  12. “Local governing body” means the governing entity of a city, county, or federally recognized Indian tribe in this state.
  13. “Local license” means a city, county, or tribal retail alcoholic beverage license issued by the appropriate local governing body.
  14. “Microbrew pub” means a brewer that brews ten thousand or fewer barrels of beer per year and sells beer produced or manufactured on the premises for consumption on or off the premises or serves beer produced or manufactured on the premises for purposes of sampling the beer.
  15. “Organization” means a domestic or foreign corporation, general partnership, limited partnership, or limited liability company.
  16. “Sparkling wine” means wine made effervescent with carbon dioxide.
  17. “Supplier” means an alcoholic beverage manufacturer, importer, marketer, or wholesaler selling alcoholic beverages to a wholesaler licensed in this state for purposes of resale.
  18. “Tribal licensee” means a person issued a local license by the governing body of a federally recognized Indian tribe in this state for the retail sale of alcoholic beverages within the exterior tribal reservation boundaries.
  19. “Twenty-one years of age” means it is after eight a.m. on the date twenty-one years after a person’s date of birth.
  20. “Wine” means the alcoholic beverage obtained by fermentation of agricultural products containing natural or added sugar or such beverage fortified with brandy and containing not more than twenty-four percent alcohol by volume.

Source:

S.L. 1967, ch. 80, § 1; 1983, ch. 106, § 1; 1991, ch. 75, § 1; 1995, ch. 55, § 2; 1995, ch. 73, § 1; 1995, ch. 74, § 1; 1995, ch. 103, § 2; 2003, ch. 65, § 1; 2005, ch. 73, § 1; 2005, ch. 74, § 1; 2007, ch. 71, §§ 1, 2; 2013, ch. 74, § 1; 2021, ch. 457, § 1, eff for taxable periods beginning after June 30, 2021.

Notes to Decisions

Constitutionality.

State regulations (N.D. Admin. Code, sections 84-02-01-05(5) and (7)) requiring all persons bringing liquor into the state to file monthly reports documenting the volume of liquor they have reported and requiring out-of-state distillers who sell liquor directly to a federal enclave to affix labels to each individual item, indicating that the liquor is for domestic consumption only within the federal enclave, fell within the core of the state’s power under the twenty-first Amendment and were not violative of the Supremacy Clause; the provisions did not violate the intergovernmental immunity doctrine and were not preempted by an act of Congress. North Dakota v. United States, 495 U.S. 423, 110 S. Ct. 1986, 109 L. Ed. 2d 420, 1990 U.S. LEXIS 2574 (U.S. 1990).

DECISIONS UNDER PRIOR LAW

Alcohol.

In a prosecution for bootlegging, the jury was justified in finding that the liquid sold was “alcohol” even though the liquid was a compound mixture of alcohol containing substances other than alcohol, including acetone. State v. Cook, 53 N.D. 429, 206 N.W. 786, 1925 N.D. LEXIS 105 (N.D. 1925); State v. Cook, 53 N.D. 756, 208 N.W. 556, 1926 N.D. LEXIS 38 (N.D. 1926).

Amendment of Law.

In amending the section of the prohibition law defining intoxicating liquors, it was proper to make any definition that would have been appropriate under the original measure undergoing amendment, and it was not necessary to state in the title of the amendatory act the exact character of the amendment. State v. Fargo Bottling Works Co., 19 N.D. 396, 124 N.W. 387, 26 L.R.A. (n.s.) 872 (N.D. 1910), explained, State ex rel. Gammons v. Shafer, 63 N.D. 128, 246 N.W. 874 (1933)

Beer.

In a prosecution under the prohibition law, it was proper for the court to instruct the jury that beer was a malt liquor, and intoxicating, and that if the defendant claimed the beer sold or kept on sale by him was not intoxicating the burden was upon him to show that fact. State v. Currie, 8 N.D. 545, 80 N.W. 475, 1899 N.D. LEXIS 46 (N.D. 1899).

Intoxicating Liquor.

In a prosecution for unlawful possession of intoxicating liquor it was not necessary for the state to prove that the liquid involved was in fact intoxicating if it belonged to the enumeration in the statute before the words “in addition thereto”. State v. Schuck, 51 N.D. 875, 201 N.W. 342, 1924 N.D. LEXIS 89 (N.D. 1924); State v. Gates, 52 N.D. 659, 204 N.W. 350, 1925 N.D. LEXIS 133 (N.D. 1925).

Where the court, in explaining why exhibits could not be sent to the jury room, referred to their contents as “intoxicating liquor”, it was not prejudicial error since the state had introduced testimony to the effect that the exhibits contained alcohol fit for use as a beverage, which was not controverted by defendant, and the jury had been previously instructed as to the burden of proof resting on the state. State v. McCauley, 68 N.D. 198, 277 N.W. 605, 1938 N.D. LEXIS 97 (N.D. 1938).

A defendant was improperly convicted of the crime of purchasing intoxicating liquor for persons under the age of twenty-one years in violation of former section 5-01-26 where the evidence, although showing that defendant had bought beer for minors, did not show that the beer contained more than four percent alcohol by weight within the former statutory definition of “intoxicating liquor”. State v. Anderson, 116 N.W.2d 623, 1962 N.D. LEXIS 82 (N.D. 1962).

Repeal of Prohibition Provisions of State and Federal Constitutions.

The repeal of the prohibition provisions of the state and federal constitutions did not abrogate state prohibition statutes. STATE v. NORTON, 64 N.D. 675, 255 N.W. 787, 1934 N.D. LEXIS 251 (N.D. 1934).

Sales Tax.

Alcoholic beverages taxed under the Liquor Control Act, when combined with ingredients to make a “mixed drink”, became a part of a new commodity that was wholly taxable under the Sales Tax Act. ISAKSON v. STATE, 70 N.D. 505, 296 N.W. 192, 1941 N.D. LEXIS 192 (N.D. 1941).

Sunday Observance Statute.

The statute relating to Sunday observance and prohibiting sale on Sunday of intoxicating beverages was not repealed by implication by the later measure authorizing the manufacture, sale, and distribution of beer, nor by the Liquor Control Act (Laws 1937, ch. 259). State v. Young, 68 N.D. 300, 279 N.W. 251, 1938 N.D. LEXIS 112 (N.D. 1938).

Wine.

“Wine”, declared in the state law to be presumptively intoxicating, did not include sweet fruit juices or compounds without a trace of alcohol. State v. Danials, 53 N.D. 403, 206 N.W. 78, 1925 N.D. LEXIS 88 (N.D. 1925).

Collateral References.

Products liability: alcoholic beverages, 42 A.L.R.4th 253.

5-01-02. Exceptions.

Nothing contained in this title may be construed to apply to the following articles, when they are unfit for beverage purposes:

  1. Denatured alcohol produced and used pursuant to Acts of Congress, and the regulations thereunder;
  2. Patent, proprietary, medical, pharmaceutical, antiseptic, and toilet preparations;
  3. Flavoring extracts, syrups, and food products; or
  4. Scientific, chemical, and industrial products;

nor to the manufacture or sale of said articles containing alcohol. This title does not apply to wines delivered to priests, rabbis, and ministers for sacramental use.

Source:

S.L. 1967, ch. 80, § 2.

5-01-03. Penalty. [Repealed]

Repealed by S.L. 1975, ch. 106, § 673.

5-01-04. Manufacture of alcoholic beverages prohibited — Exceptions.

A person may manufacture alcoholic beverages for personal or family use, and not for sale, without securing a license if the amount manufactured is within quantities allowed by the alcohol and tobacco tax and trade bureau of the United States treasury department. Any person manufacturing alcoholic beverages within this state in quantities greater than those permitted by the alcohol and tobacco tax and trade bureau of the United States treasury department is guilty of a class A misdemeanor and property used for the same is subject to disposition by the court except any person may establish a brewery for the manufacture of malt beverages, a winery, or a distillery or other plant for the distilling, manufacturing, or processing of alcohol within this state if the person has secured a license from the tax commissioner. This license must be issued on a calendar-year basis with a fee of five hundred dollars. A first-time license fee may be reduced twenty-five percent for each full quarter of a year elapsed between the first day of the year for which the license is issued and the date on which the application for the license is filed with the tax commissioner. A license may not be issued for any period for a fee less than one-half of the annual license fee. This license shall allow sale to only licensed wholesalers.

Source:

S.L. 1967, ch. 80, § 4; 1969, ch. 90, § 1; 1975, ch. 106, § 29; 1995, ch. 75, § 1; 2001, ch. 84, § 2; 2007, ch. 71, § 3; 2009, ch. 87, § 1.

Notes to Decisions

In General.

While beer may be manufactured and sold in the state, the business is so intimately associated with the proscribed traffic that it must be strictly supervised, regulated, and controlled. Fylken v. Minot, 66 N.D. 251, 264 N.W. 728, 1936 N.D. LEXIS 169 (N.D. 1936).

Effect of Repeals of Constitutional Provisions.

The repeal of the prohibitory provisions of the state and federal constitutions did not abrogate the state prohibition statute. STATE v. NORTON, 64 N.D. 675, 255 N.W. 787, 1934 N.D. LEXIS 251 (N.D. 1934).

Sunday Observance Statute Not Repealed.

The statute relating to Sunday observance and prohibiting the sale of alcoholic beverages on Sunday was not repealed by subsequent enactments authorizing the manufacture, sale, and distribution of beer. State v. Young, 68 N.D. 300, 279 N.W. 251, 1938 N.D. LEXIS 112 (N.D. 1938); State v. Hawley, 68 N.D. 309, 279 N.W. 255, 1938 N.D. LEXIS 113 (N.D. 1938); State v. Coman, 68 N.D. 310, 279 N.W. 256, 1938 N.D. LEXIS 167 (N.D. 1938).

DECISIONS UNDER PRIOR LAW

Beer.

Though beer could be sold pursuant to the provisions of the initiated measure, nevertheless it was an intoxicating beverage. State v. Fargo Bottling Works Co., 19 N.D. 396, 124 N.W. 387, 1910 N.D. LEXIS 2 (N.D. 1910); Fylken v. Minot, 66 N.D. 251, 264 N.W. 728, 1936 N.D. LEXIS 169 (N.D. 1936).

Nature of Initiated Measure.

The initiated measure merely substituted regulation and control of the manufacture and sale of beer for its absolute prohibition and, so far as the state was concerned, the measure was both a tax measure and a regulatory measure. Fylken v. Minot, 66 N.D. 251, 264 N.W. 728, 1936 N.D. LEXIS 169 (N.D. 1936).

5-01-05. Public intoxication — Penalty. [Repealed]

Repealed by S.L. 1969, ch. 91, § 5.

5-01-05.1. Public intoxication — Assistance — Medical care.

  1. As used in this section “intoxicated” means a state in which an individual is under the influence of alcoholic beverages, drugs, or controlled substances, or a combination of alcoholic beverages, drugs, and controlled substances.
  2. A peace officer may take any apparently intoxicated individual to the individual’s home, to a local hospital, to a detoxification center, or, whenever that individual constitutes a danger to that individual or others, to a jail. A tier 1 b mental health professional, as defined under section 25-01-01, of a local hospital may hold that individual for treatment up to seventy-two hours.
  3. An intoxicated individual may not be held in jail because of intoxication more than twenty-four hours. An intoxicated individual may not be placed in a jail unless a jailer is constantly monitoring the individual and medical services are provided if the need is indicated.
  4. Upon placing that individual in jail, or if the individual is admitted to a hospital or detoxification center, upon admission, the peace officer shall make a reasonable effort to notify the intoxicated individual’s family as soon as possible.
  5. Any additional costs incurred by the city, county, ambulance service, or medical service provider on account of an intoxicated individual are recoverable from that individual.

Source:

S.L. 1969, ch. 91, § 1; 1995, ch. 76, § 1; 1999, ch. 67, § 1; 2009, ch. 88, § 1; 2017, ch. 97, § 1, eff August 1, 2017; 2019, ch. 74, § 1, eff August 1, 2019.

Notes to Decisions

In General.

Provisions for warrantless arrests for DUI and for detention for detoxification of apparently intoxicated persons evidence a legislative recognition that the safety concerns associated with the detention of DUI arrestees can be resolved under the detoxification procedures upon a finding that a specific person is “apparently intoxicated,” and establishes a discretionary procedure for peace officers to adequately protect the safety of the public and persons found to be apparently intoxicated. City of Fargo v. Stutlien, 505 N.W.2d 738, 1993 N.D. LEXIS 203 (N.D. 1993).

“Apparently Intoxicated”.

This section does not require that a person be intoxicated before he may be taken into custody but rather provides that the officers may take into custody any person apparently intoxicated; thus, actual proof of intoxication is not required and if it is reasonable for the officers to assume that the person is intoxicated, the requirements of this section are satisfied. McCroskey v. Fettes, 336 N.W.2d 645, 1983 N.D. LEXIS 387 (N.D. 1983).

Independent Observation of Intoxication.

Although arrest for DUI is some evidence of intoxication, city may not assume everyone arrested for DUI is intoxicated; before jail detention under this section, the officer must independently observe whether the person appears intoxicated and dangerous. City of Jamestown v. Erdelt, 513 N.W.2d 82, 1994 N.D. LEXIS 60 (N.D. 1994).

Defendant’s seizure for detoxification at the detention center was not unlawful and was not an unreasonable seizure where an officer testified about his actual observations of defendant’s behavior, including that he thought defendant was intoxicated and was a danger to himself based on his statements and actions. Thus, under N.D.C.C. § 5-01-05.1, the officer had discretion to decide whether defendant should have been detained for detoxification in the county detention center. State v. Hollis, 2019 ND 163, 930 N.W.2d 171, 2019 N.D. LEXIS 164 (N.D. 2019).

Inventory Search.

The inventory search of the wallet of a person held for detoxification is permissible in light of three policy considerations: (1) protection of the detainee’s property while it remains in police custody; (2) protection of the police against claims and disputes over lost or stolen property; and, (3) protection of the police from danger. Schwindt v. State, 510 N.W.2d 114, 1994 N.D. LEXIS 14 (N.D. 1994).

Notice to Family.

This section requires the police officer to notify a person’s family as soon as possible upon placing such person in jail for apparent intoxication; there is no discretion involved in executing this function. McCroskey v. Cass County, 303 N.W.2d 330, 1981 N.D. LEXIS 255 (N.D. 1981).

Police Custody.

Regardless of whether the initial admission of defendant to the hospital was under the involuntary commitment statute or under the public intoxication statute, he was not in police custody for purposes of Miranda when he confessed to killing his wife as law enforcement was not involved in the decision to hold defendant or to transfer him to a second hospital as that was based on a doctor's determination. State v. Rogers, 2014 ND 134, 848 N.W.2d 257, 2014 N.D. LEXIS 131 (N.D. 2014)

Release on Bond Required.

Absent extraordinary circumstances, a person arrested for DUI must be released on bond to go with a responsible adult; where officer believed he was required to jail defendant for detoxification, and told her boyfriend any effort to get her released on bond would be futile for eight hours, defendant’s mandatory jail detention was unlawful. City of Jamestown v. Erdelt, 513 N.W.2d 82, 1994 N.D. LEXIS 60 (N.D. 1994).

Sobriety Tests.

This section does not require the officers to administer any blood test, breathalyzer test, or field sobriety tests before making a determination that a person is apparently intoxicated; however, some reasonable sobriety tests would assist the officers in making their determination as well as assisting a court in reviewing the reasonableness of the officers’ actions. McCroskey v. Fettes, 336 N.W.2d 645, 1983 N.D. LEXIS 387 (N.D. 1983).

Suspension of Driver’s License.

Although officer who arrested defendant for driving while impaired by alcohol violated the statutory detention procedures of N.D.C.C. § 5-01-05.1 by holding defendant overnight without notifying his family, suspension of defendant’s driver’s license was upheld as defendant did not prove that his right to a fair hearing was prejudiced by the violation through the loss of significant evidence. Larson v. North Dakota DOT, 1997 ND 114, 564 N.W.2d 628, 1997 N.D. LEXIS 116 (N.D. 1997).

Driver’s license suspension would not be reversed because hearing officer’s finding that trooper made individualized determination driver was a danger to himself was supported by the evidence, and because driver did not demonstrate a systematic disregard for the law of bail and detoxification. Larson v. North Dakota DOT, 1997 ND 114, 564 N.W.2d 628, 1997 N.D. LEXIS 116 (N.D. 1997).

Time Limits.

Defendant held for more than ninety hours was detained beyond the time allowed by this section where he received no treatment during that time, and was held only because his family requested that he be held until after the victim’s funeral. State v. Smaage, 547 N.W.2d 916, 1996 N.D. LEXIS 135 (N.D. 1996).

Defendant, held for a period in excess of what is legally permitted under this section, was not entitled to a dismissal of the criminal complaint absent a showing that he suffered actual prejudice as a result of the illegal detention. State v. Smaage, 547 N.W.2d 916, 1996 N.D. LEXIS 135 (N.D. 1996).

DECISIONS UNDER PRIOR LAW

Arrest.

A peace officer could arrest one without a warrant for a public offense, such as public intoxication, committed in his presence; and when the officer notified the individual of his intention to arrest him and he resisted, the officer could use all necessary means to effect his arrest. Schell v. Collis, 83 N.W.2d 422, 1957 N.D. LEXIS 126 (N.D. 1957).

5-01-05.2. No prosecution for intoxication.

No person may be prosecuted in any court solely for public intoxication. Law enforcement officers may utilize standard identification procedures on all persons given assistance because of apparent intoxication.

Source:

S.L. 1969, ch. 91, § 3.

5-01-05.3. Disturbing the peace — Disorderly conduct — Penalty. [Repealed]

Repealed by S.L. 1975, ch. 106, § 673.

5-01-05.4. Informational, counseling, and referral centers for alcoholism.

Any county or city within the state at the discretion of their governing bodies, either individually or jointly, may establish or provide office space, including personnel, for informational, counseling, and referral services for alcoholics and their families.

Source:

S.L. 1969, ch. 92, § 1.

5-01-06. Recovery of damages resulting from intoxication. [Repealed]

Repealed by S.L. 1987, ch. 95, § 5; S.L. 1987, ch. 99, § 2.

5-01-06.1. Claim for relief for fault resulting from intoxication.

  1. Every spouse, child, parent, guardian, employer, or other individual who is injured by any obviously intoxicated individual has a claim for relief for fault under section 32-03.2-02 against any person who knowingly disposes, sells, barters, or gives away alcoholic beverages to an individual under twenty-one years of age or to an incompetent or an obviously intoxicated individual, and if death ensues, the survivors of the decedent are entitled to damages defined in section 32-21-02.  If a retail licensee is found liable under this section and exemplary damages are sought, the finder of fact may consider as a mitigating factor that the licensee provided to an employee alcohol server training that addressed intoxication, drunk driving, and underage drinking.
  2. If a retail licensee provided to an employee alcohol server training that addresses intoxication, drunk driving, and underage drinking, a person with a claim for relief under this section may not use the fact that the retail licensee provided this training to prove culpability.
  3. A claim for relief under this section may not be had on behalf of the intoxicated individual nor on behalf of the intoxicated individual’s estate or personal representatives, nor may a claim for relief be had on behalf of an adult passenger in an automobile driven by an intoxicated individual or on behalf of the passenger’s estate or personal representatives.

Source:

S.L. 1987, ch. 95, § 2; 2015, ch. 77, § 1, eff August 1, 2015.

Notes to Decisions

Applicability.

Where passengers in pickup truck driven by an intoxicated minor had not provided the driver with any alcohol, there was no basis for imposing statutory liability on the passengers under North Dakota’s dram shop law. Hurt v. Freeland, 1999 ND 12, 589 N.W.2d 551, 1999 N.D. LEXIS 4 (N.D. 1999).

Common Law Actions.

A bar owner, although not an insurer of the safety of its patrons, has a common law duty independent of the dram shop statute to exercise reasonable care to protect patrons from reasonably foreseeable injury at the hands of other patrons. Zueger v. Carlson, 542 N.W.2d 92, 1996 N.D. LEXIS 21 (N.D. 1996).

Complicity.

The legislature made no exception for complicity in this section. Aanenson v. Bastien, 438 N.W.2d 151, 1989 N.D. LEXIS 56 (N.D. 1989).

Construction.

This section is remedial in character and should be liberally construed to advance its remedy. Born v. Mayers, 514 N.W.2d 687, 1994 N.D. LEXIS 87 (N.D. 1994).

The dram shop amendments in 1987 plainly granted persons injured by an obviously intoxicated person a dram shop claim for relief under the comparative fault guidelines against persons who knowingly sell alcoholic beverages to the intoxicated person while that person is obviously intoxicated; the amendments specifically incorporated the requirement of N.D.C.C. § 32-03.2-02, for allocation of fault among all persons “who contributed to the injury.” Stewart v. Ryan, 520 N.W.2d 39, 1994 N.D. LEXIS 169 (N.D. 1994).

North Dakota’s Dram Shop Act, N.D.C.C. § 5-01-06.1, does not supersede a wrongful death claim under N.D.C.C. § 32-21-01 because the North Dakota Supreme Court has concluded that the dram shop statutes do not supersede all other negligence liability of bar owners. Therefore, the Dram Shop Act was not the exclusive remedy for parties claiming to be injured by a bar owner’s negligence. Hoff v. Elkhorn Bar, 613 F. Supp. 2d 1146, 2009 U.S. Dist. LEXIS 58752 (D.N.D. 2009).

Intervening Cause.

The legal requirements of causal relation preclude dram shop liability for cases in which there is a superseding, intervening cause which breaks the causal link between the dram shop vendor’s fault and the injuries. Stewart v. Ryan, 520 N.W.2d 39, 1994 N.D. LEXIS 169 (N.D. 1994).

Assuming that defendant’s tavern knowingly served customer more alcoholic beverages while he was obviously intoxicated, customer’s criminal act of shooting policeman was not, as a matter of law, a superseding, intervening cause of their dram shop fault. Stewart v. Ryan, 520 N.W.2d 39, 1994 N.D. LEXIS 169 (N.D. 1994).

Legislative Intent.

The legislature intended to create a new, distinct cause of action unrelated to any recognized by common law when it enacted the dram shop statute, and did not thereby supersede unrelated premises liability actions against bar owners. Zueger v. Carlson, 542 N.W.2d 92, 1996 N.D. LEXIS 21 (N.D. 1996).

Surviving relatives of a man who died after being served numerous alcoholic drinks in a bar could not recover under North Dakota’s Dram Shop Act, N.D.C.C. § 5-01-06.1, because the 1987 amendments to the Act were intended to limit recovery to only those parties injured by the intoxicated person, and not the intoxicated person’s family. Hoff v. Elkhorn Bar, 613 F. Supp. 2d 1146, 2009 U.S. Dist. LEXIS 58752 (D.N.D. 2009).

Liability.

As between the liquor merchant and a drinking companion, the legislature intended the responsibility and liability for serving alcoholic beverages to an intoxicated person to fall on the merchant (the dram shop). Aanenson v. Bastien, 438 N.W.2d 151, 1989 N.D. LEXIS 56 (N.D. 1989).

It would be an absurd result if alcoholic beverage dealers could avoid liability for illegal sales to intoxicated customers depending upon whether the customers paid for their own drinks or took turns paying for each other’s drinks. Relieving the merchant of liability under the latter circumstance would not deter sales to intoxicated persons, which is the objective of the Dram Shop Act. Aanenson v. Bastien, 438 N.W.2d 151, 1989 N.D. LEXIS 56 (N.D. 1989).

Obvious Intoxication.

Trial court erred in granting judgment on an injured party’s dram shop claim. The injured party, who claimed that she was pushed to the ground by a bar patron, testified she saw the bar patron drinking beer at the bar earlier that night and noticed signs that would suggest that the bar patron was obviously intoxicated. Forsman v. Blues, Brews and Bar-B-Ques, Inc., 2012 ND 184, 820 N.W.2d 748, 2012 N.D. LEXIS 186 (N.D. 2012).

Violent Propensities.

It would defeat the remedial purpose of the dram shop law to require an obviously intoxicated person to always display violent propensities before the intoxicated person’s subsequent criminal acts are not deemed a superseding, intervening cause of a victim’s injuries. Stewart v. Ryan, 520 N.W.2d 39, 1994 N.D. LEXIS 169 (N.D. 1994).

DECISIONS UNDER PRIOR LAW

Applicability.

This section creates a claim for relief against any person who knowingly provides alcoholic beverages to an obviously intoxicated person for any purpose, including acts of hospitality and acts to promote business good will. Born v. Mayers, 514 N.W.2d 687, 1994 N.D. LEXIS 87 (N.D. 1994).

This section creates a cause of action against any person who knowingly provides alcoholic beverages to an obviously intoxicated person; the claim for relief is against anyone, without limitation, who knowingly commits the prohibited conduct, not only “professional merchants of alcohol.” Born v. Mayers, 514 N.W.2d 687, 1994 N.D. LEXIS 87 (N.D. 1994).

Burden of Proof.

Plaintiffs in a wrongful death action based on former § 5-01-06 had the burden of proof that driver was intoxicated and that his actions were the proximate cause of the death, and a negative finding by the jury on either issue would support a verdict for defendant. Jore v. Saturday Night Club, 227 N.W.2d 889, 1975 N.D. LEXIS 185 (N.D. 1975).

Comparative Negligence.

Comparative negligence does not apply to actions brought under the Dram Shop Act; trial court did not err in refusing to allow defendant-bar to include contributory negligence and assumption of risk in its answer as defenses, since these defenses have been replaced by comparative negligence, which is not a defense to a dramshop action. Feuerherm v. Ertelt, 286 N.W.2d 509, 1979 N.D. LEXIS 328 (N.D. 1979).

Damages.

Where a markedly intoxicated person was sold or delivered an alcoholic beverage while in a tavern owned by defendant, and such intoxicated person thereafter negligently caused a collision which injured the plaintiff, and said collision occurred while the negligent party was still intoxicated, the injured party was entitled to recover money damages for personal injuries and property damage from the defendant tavern owner. Wanna v. Miller, 136 N.W.2d 563, 1965 N.D. LEXIS 130 (N.D. 1965).

Denial of JNOV.

In an action brought by plaintiff for loss of services, support, and society of her husband who died as the result of injuries received in a bar operated by defendants, trial court did not err in denying defendants’ motion for judgment notwithstanding the failure of the jury to arrive at a verdict where there was ample evidence on which the jury could have found for the plaintiff under allegations of her complaint charging that defendants sold alcoholic beverages to decedent after he became intoxicated and that such illegal sale contributed to the intoxication. Hanson v. Fledderman, 111 N.W.2d 401, 1961 N.D. LEXIS 99 (N.D. 1961).

Denial of Motion to Dismiss.

In wrongful death action against parties that had supplied liquor to decedent who was later struck and killed by truck, denial of defendant’s motion to dismiss for failure to join indispensable party (owner and driver of truck) was proper since defendant had right to implead them. Revoir v. Kansas Super Motels, 224 N.W.2d 549, 1974 N.D. LEXIS 164 (N.D. 1974).

Exemplary Damages.

The only condition necessary for an award of exemplary damages is that a right to compensatory damages be established. Iszler v. Jorda, 80 N.W.2d 665, 1957 N.D. LEXIS 95 (N.D. 1957).

Extraterritorial Application.

Former § 5-01-06 applied only to North Dakota vendors and had no extraterritorial application where the sale took place outside of this state. Thoring v. Bottonsek, 350 N.W.2d 586, 1984 N.D. LEXIS 312 (N.D. 1984).

Injury to Property.

Payment by a father of his son’s funeral expenses, which he was obligated to pay, was an injury to property, and the destruction, by the death of their son, of the parents’ right to the earnings and services of an unmarried minor child was also an injury to property. Iszler v. Jorda, 80 N.W.2d 665, 1957 N.D. LEXIS 95 (N.D. 1957).

Instruction.

Trial court erred in instructing jury that it must decide if defendant’s intoxication “caused” death of plaintiffs’ son, where statute provides for recovery when injury is “by any intoxicated person”. Meshefski v. Shirnan Corp., 385 N.W.2d 474, 1986 N.D. LEXIS 300 (N.D. 1986).

Intoxicated and Under Influence Distinguished.

Term “intoxicated” as used in former § 5-01-06 differed from that of “under the influence of intoxicating liquor”; to interpret the terms as synonymous would distort the function of the Dram Shop Act by rendering the seller of liquor liable even if he was unable to discern that the buyer was, in any way, intoxicated; it was not error in dram shop action to give instruction calling attention to the distinction between the two terms and defining “intoxicated” as referring to one whose ordinary judgment and common senses have been disturbed and whose symptoms were reasonably discernible to a person of ordinary experience. Jore v. Saturday Night Club, 227 N.W.2d 889, 1975 N.D. LEXIS 185 (N.D. 1975).

Last Drink.

Former section 5-01-21 did not require that a claimant prove that an intoxicated person received his last drink at the defendant’s place of business. It was sufficient if it was proved that a defendant engaged in the business of selling alcoholic beverages sold, bartered or gave away an alcoholic drink contrary to law, and that the damages complained of resulted from the intoxication of the recipient of such alcoholic drink. Wanna v. Miller, 136 N.W.2d 563, 1965 N.D. LEXIS 130 (N.D. 1965).

Liability of Seller.

A licensed retail liquor dealer was not liable for damages caused by the intoxication of a minor who received a part of such liquor from the purchaser where the minor who made the purchase made no statement to the dealer that he was making the purchase for other minors and the facts were not such that the dealer knew or should have known that the purchaser would give part of the liquor to other minors. Fladeland v. Mayer, 102 N.W.2d 121, 1960 N.D. LEXIS 60 (N.D. 1960).

Liability for unlawful sale of alcoholic beverages rests on the seller only for damage caused by the intoxication of the immediate buyer, unless the seller knew or reasonably should have known that others would consume a part of such liquor. Fladeland v. Mayer, 102 N.W.2d 121, 1960 N.D. LEXIS 60 (N.D. 1960).

The legislature intended to fix liability on the maker of an illegal sale where such sale causes the intoxication of the person doing the damage. Ross v. Scott, 386 N.W.2d 18, 1986 N.D. LEXIS 304 (N.D. 1986).

Loss of Consortium.

A wife deprived of her husband’s consortium was entitled to bring an action for damages under this section even though the common law recognized loss of consortium as actionable only when sustained by the husband; however, a minor child deprived of her father’s “advice and counsel” could not maintain a similar action. Hastings v. James River Aerie No. 2337-Fraternal Order of Eagles, 246 N.W.2d 747, 1976 N.D. LEXIS 149 (N.D. 1976).

Loss of consortium was a loss of “property” within the meaning of former § 5-01-06, and was therefore a basis of a right of action under it. Hastings v. James River Aerie No. 2337-Fraternal Order of Eagles, 246 N.W.2d 747, 1976 N.D. LEXIS 149 (N.D. 1976).

Objection to Blood Test.

The objection that the extraction of a blood specimen for alcohol content test purposes was not voluntarily submitted to is only available to the person charged with driving a vehicle while under the influence of intoxicating liquor. Such an objection is not available to one accused of illegal sale of alcoholic beverages to such intoxicated person and affords the vendor no defense to provision for recovery of damages for illegal sale of liquor. Wanna v. Miller, 136 N.W.2d 563, 1965 N.D. LEXIS 130 (N.D. 1965).

Sale to Minor.

Sale of alcoholic beverages to a minor is an illegal sale of liquor. Fladeland v. Mayer, 102 N.W.2d 121, 1960 N.D. LEXIS 60 (N.D. 1960).

For liability under the Dram Shop Act to attach to an illegal sale of alcoholic beverages to a minor who becomes intoxicated, the minor need not have been intoxicated at the time of the sale. Ross v. Scott, 386 N.W.2d 18, 1986 N.D. LEXIS 304 (N.D. 1986).

Where attire of minor purchaser, manner of payment, type of purchase and refusal of aid in loading two kegs of beer provided evidence to defendant’s agent at time of sale that another minor would be given portion of liquor to consume, defendant was liable under this section for damages caused by intoxicated minor who consumed alcoholic beverage though he did not purchase it. Trapp v. 4-10 Inv. Corp., 424 F.2d 1261, 1970 U.S. App. LEXIS 9883 (8th Cir. N.D. 1970).

Wrongful Death.

The death of an unmarried minor child, as a result of intoxication caused by the use of alcoholic beverages sold or given away in violation of law, gives rise to a cause of action in favor of surviving parents against the persons who sold or gave the beverages to the deceased. Iszler v. Jorda, 80 N.W.2d 665, 1957 N.D. LEXIS 95 (N.D. 1957).

Collateral References.

What constitutes “injury in person or property” within civil damage or dramshop act, 6 A.L.R.2d 798, 78 A.L.R.3d 1199.

Liability for death by suicide under civil damage acts, 11 A.L.R.2d 751.

“Intoxicating liquor”, what constitutes, 52 A.L.R.2d 890.

Statute of limitations applicable to action under dramshop or civil damage act, 55 A.L.R.2d 1286.

Right to recover under civil damage or dramshop act for death of intoxicated person, 64 A.L.R.2d 705.

Liability of liquor furnisher under civil damage or dramshop act for injury or death of intoxicated person from wrongful act of third person, 65 A.L.R.2d 923.

Liability of innkeeper, restaurateur, or tavern keeper for injury occurring on or about premises to guest or patron by person other than proprietor or his servant, 70 A.L.R.2d 628.

Survival of action or cause of action under civil damage acts, 84 A.L.R.2d 1136, 1140.

Irregular sales: liability, under dramshop acts, of one who sells or furnishes liquor otherwise than in operation of regularly established liquor business, 8 A.L.R.3d 1412.

Insurance: coverage of policy insuring against liability under dramshop acts, 14 A.L.R.3d 858.

Owner: who is, as “owner” of premises on which intoxicating liquor is sold, liable under civil damage or dramshop acts, 18 A.L.R.3d 1323.

Drinking: third person’s participating in or encouraging drinking as barring him from recovery under civil damage or similar acts, 26 A.L.R.3d 1112.

Contribution or indemnity: right of one liable under civil damage act to contribution or indemnity from intoxicated person, or vice versa, 31 A.L.R.3d 438.

Common-law right of action for damage sustained by plaintiff in consequence of sale or gift of intoxicating liquor or habit-forming drug to another, 97 A.L.R.3d 528.

Furnishing intoxicating liquor — liability, 98 A.L.R.3d 1230.

Choice of law as to liability of liquor seller for injuries caused by intoxicated person, 2 A.L.R.4th 952.

Products liability: alcoholic beverages, 42 A.L.R.4th 253.

Tavernkeeper’s liability to patron for third person’s assault, 43 A.L.R.4th 281.

Intoxicating liquors: employer’s liability for furnishing or permitting liquor on social occasion, 51 A.L.R.4th 1048.

Social host’s liability for injuries incurred by third parties as a result of intoxicated guest’s negligence, 62 A.L.R.4th 16.

Tort liability of college or university for injury suffered by student as a result of own or fellow student’s intoxication, 62 A.L.R.4th 81.

Validity, construction, and effect of statute limiting amount recoverable in dram shop action, 78 A.L.R.4th 542.

Social host’s liability for death or injuries incurred by person to whom alcohol was served, 54 A.L.R.5th 313.

Law Reviews.

The Drunken Driver and Punitive Damages: A Survey of the Case Law and the Feasibility of a Punitive Damage Award in North Dakota, 59 N.D. L. Rev. 391 (1983).

Social Host Liability for Injuries Caused by the Acts of an Intoxicated Guest, 59 N.D. L. Rev. 391 (1983).

Summary of significant decisions rendered by the North Dakota Supreme Court in 1990 relating to dram shop acts, 66 N.D. L. Rev. 753 (1990).

Intoxicating Liquors — Persons Liable: North Dakota Extends Statutory Dram Shop Liability to Social Hosts, 71 N.D. L. Rev. 743 (1995).

Summary of North Dakota Supreme Court Decisions on Dram Shop Act — Liability of Host, 71 N.D. L. Rev. 841 (1995).

Summary of North Dakota Supreme Court Decisions on Dram Shop Act, 72 N.D. L. Rev. 763 (1996).

Intoxicating Liquors — Persons Liable: The North Dakota Dram Shop Statute Does Not Supersede the Common Law Duty of a Tavernkeeper to Intervene in a Bar Fight, 73 N.D. L. Rev. 505 (1997).

5-01-07. Township beer or liquor licenses.

No retail beer or liquor license may be issued in any organized township without the written consent of the board of township supervisors.

Source:

S.L. 1967, ch. 80, § 7; 1969, ch. 93, § 1; 1987, ch. 96, § 1.

5-01-08. Individuals under twenty-one years of age prohibited from using alcoholic beverages or entering licensed premises — Penalty. [Effective through August 31, 2022]

  1. Except as permitted in this section and section 5-02-06, an individual under twenty-one years of age may not manufacture or attempt to manufacture, purchase or attempt to purchase, consume or have recently consumed other than during a religious service, be under the influence of, be in possession of, or furnish money to any individual for the purchase of an alcoholic beverage.
  2. An individual under twenty-one years of age may not enter any licensed premises where alcoholic beverages are being sold or displayed, except:
    1. A restaurant if accompanied by a parent or legal guardian;
    2. In accordance with section 5-02-06;
    3. If the individual is an independent contractor or the independent contractor’s employee engaged in contract work and is not engaged in selling, dispensing, delivering, or consuming alcoholic beverages;
    4. If the individual is a law enforcement officer or other public official who enters the premises in the performance of official duty; or
    5. If the individual enters the premises for training, education, or research purposes under the supervision of an individual twenty-one or more years of age with prior notification of the local licensing authority.
  3. An individual who violates this section is guilty of an infraction. For a violation of subsection 1 or 2, the court also may sentence a violator to an evidence-based alcohol and drug education program operated under rules adopted by the department of human services under section 50-06-44. For a second or subsequent violation of subsection 1 or 2, the court also shall sentence a violator to an evidence-based alcohol and drug education program operated under rules adopted by the department of human services under section 50-06-44.
  4. The court, under this section, may refer the individual to an outpatient addiction facility licensed by the department of human services for evaluation and appropriate counseling or treatment.
  5. The offense of consumption occurs in the county of consumption or the county where the offender is arrested.
  6. An individual under twenty-one years of age is immune from criminal prosecution under this section if that individual contacted law enforcement or emergency medical services and reported that another individual under twenty-one years of age was in need of medical assistance due to alcohol consumption, provided assistance to the individual in need of medical assistance until assistance arrived and remained on the scene, or was the individual in need of medical assistance and cooperated with medical assistance and law enforcement personnel on the scene. The maximum number of individuals who may be immune for any one occurrence is five individuals.

Source:

S.L. 1967, ch. 80, § 8; 1971, ch. 99, § 1; 1975, ch. 64, § 1; 1975, ch. 106, § 30; 1981, ch. 102, § 1; 1987, ch. 97, § 1; 1991, ch. 76, § 1; 1995, ch. 75, § 2; 1999, ch. 68, § 1; 2001, ch. 85, § 1; 2003, ch. 66, § 1; 2005, ch. 75, § 1; 2005, ch. 76, § 1; 2007, ch. 72, § 1; 2007, ch. 71, § 4; 2007, ch. 73, § 1; 2017, ch. 333, § 1, eff July 1, 2017; 2019, ch. 75, § 1, eff August 1, 2019; 2021, ch. 69, § 1, eff August 1, 2021; 2021, ch. 70, § 1, eff August 1, 2021; 2021, ch. 176, § 1, eff August 1, 2021.

Note.

Section 05-01-08 was amended 4 times by the 2021 Legislative Assembly. Pursuant to Section 1-02-09.1, the section is printed above to harmonize and give effect to the changes made in Section 1 of Chapter 176, Session Laws 2021, Senate Bill 2264; Section 1 of Chapter 69, Session Laws 2021, House Bill 1124; Section 1 of Chapter 70, Session Laws 2021, House Bill 1223; and Section 2 of Chapter 352, Session Laws 2021, House Bill 1247.

Notes to Decisions

Application and Construction.

The county court misinterpreted the statutes when it held that it was not a delinquent act for a minor to enter a liquor establishment, or purchase, attempt to purchase, consume, or possess alcoholic beverages; the fact that the legislature has chosen to define as unruly a child who has committed these delinquent acts is not determinative of whether the acts themselves are classified as delinquent and contributing to such behavior can constitute contributing to delinquency. State v. Azure, 520 N.W.2d 574, 1994 N.D. LEXIS 184 (N.D. 1994).

Defenses.

Although N.D.C.C. § 5-01-08 prohibits persons under 21 years of age from purchasing alcohol, attempting to purchase alcohol, and entering premises where alcoholic beverages are sold, law enforcement officials do not violate the law when conducting compliance checks because N.D.C.C. § 12.1-05-02(4) gives law enforcement officials the authority to use persons under 21 years of age for this purpose. City of Bismarck v. DePriest, 2006 ND 158, 717 N.W.2d 924, 2006 N.D. LEXIS 166 (N.D. 2006).

Possession.

Where a juvenile went to a house, knowing that alcohol was present, and remained there for some 30 minutes, those circumstances of knowledge and proximity alone were not enough to establish actual possession. Her mere presence in a house where alcohol was accessible, without any actual control of the alcohol, was insufficient, as a matter of law, to support a determination that the minor was in possession of alcohol. In Interest of K.S., 500 N.W.2d 603, 1993 N.D. LEXIS 97 (N.D. 1993).

Under this section, “possession” requires that a minor exercise some degree of actual dominion or control over an alcoholic beverage. In Interest of K.S., 500 N.W.2d 603, 1993 N.D. LEXIS 97 (N.D. 1993).

Defendant’s passenger’s breath sample indicated a blood alcohol content of .083 percent, which provided probable cause that she committed the crime of minor in possession of alcohol, and defendant’s admission that there was alcohol in the car, coupled with the evidence that the passenger had consumed alcohol, would be enough to provide a reasonable belief that the passenger had actual control over those beverages in the vehicle, thus violating the law prohibiting minors from being in possession of alcohol; thus, the officers had probable cause to search the vehicle for alcohol, as it constituted an identifiable object connected with the passenger’s criminal activity. State v. Zwicke, 2009 ND 129, 767 N.W.2d 869, 2009 N.D. LEXIS 128 (N.D. 2009).

Strict Liability.

This section creates a strict liability crime. In Interest of K.S., 500 N.W.2d 603, 1993 N.D. LEXIS 97 (N.D. 1993).

Because violation of this section is a strict liability offense, the juvenile was in violation of this section when he was stopped by the arresting officer, and it was irrelevant that no proof was offered that he physically consumed the alcohol while driving. Russell v. Z.C.B. (In the Interest of Z.C.B.), 2003 ND 151, 669 N.W.2d 478, 2003 N.D. LEXIS 165 (N.D. 2003).

DECISIONS UNDER PRIOR LAW

Information.

An information charging the sale of intoxicating liquor to an eighteen-year-old “minor”, in the words of the statute prior to the 1945 amendment, was sufficient. State v. Prince, 75 N.D. 386, 28 N.W.2d 538, 1947 N.D. LEXIS 74 (N.D. 1947).

Sale to Minor.

Even though there was no penalty provision in the statute, sale of alcoholic beverages to a minor was a misdemeanor, and punishable by the penalty provided in section 12-0614 R. C. 1943. State v. Prince, 75 N.D. 386, 28 N.W.2d 538, 1947 N.D. LEXIS 74 (N.D. 1947).

Collateral References.

Criminal offense of selling liquor to a minor or permitting him to stay on licensed premises as affected by ignorance or mistake regarding his age, 12 A.L.R.3d 991.

Serving liquor to minor in home as unlawful sale or gift, 14 A.L.R.3d 1186.

5-01-08. Individuals under twenty-one years of age prohibited from using alcoholic beverages or entering licensed premises — Penalty. [Effective September 1, 2022]

  1. Except as permitted in this section and section 5-02-06, an individual under twenty-one years of age may not manufacture or attempt to manufacture, purchase or attempt to purchase, consume or have recently consumed other than during a religious service, be under the influence of, be in possession of, or furnish money to any individual for the purchase of an alcoholic beverage.
  2. An individual under twenty-one years of age may not enter any licensed premises where alcoholic beverages are being sold or displayed, except:
    1. A restaurant if accompanied by a parent or legal guardian;
    2. In accordance with section 5-02-06;
    3. If the individual is an independent contractor or the independent contractor’s employee engaged in contract work and is not engaged in selling, dispensing, delivering, or consuming alcoholic beverages;
    4. If the individual is a law enforcement officer or other public official who enters the premises in the performance of official duty; or
    5. If the individual enters the premises for training, education, or research purposes under the supervision of an individual twenty-one or more years of age with prior notification of the local licensing authority.
  3. An individual who violates this section is guilty of an infraction. For a violation of subsection 1 or 2, the court also may sentence a violator to an evidence-based alcohol and drug education program operated under rules adopted by the department of health and human services under section 50-06-44. For a second or subsequent violation of subsection 1 or 2, the court also shall sentence a violator to an evidence-based alcohol and drug education program operated under rules adopted by the department of health and human services under section 50-06-44.
  4. The court, under this section, may refer the individual to an outpatient addiction facility licensed by the department of health and human services for evaluation and appropriate counseling or treatment.
  5. The offense of consumption occurs in the county of consumption or the county where the offender is arrested.
  6. An individual under twenty-one years of age is immune from criminal prosecution under this section if that individual contacted law enforcement or emergency medical services and reported that another individual under twenty-one years of age was in need of medical assistance due to alcohol consumption, provided assistance to the individual in need of medical assistance until assistance arrived and remained on the scene, or was the individual in need of medical assistance and cooperated with medical assistance and law enforcement personnel on the scene. The maximum number of individuals who may be immune for any one occurrence is five individuals.

Source:

S.L. 1967, ch. 80, § 8; 1971, ch. 99, § 1; 1975, ch. 64, § 1; 1975, ch. 106, § 30; 1981, ch. 102, § 1; 1987, ch. 97, § 1; 1991, ch. 76, § 1; 1995, ch. 75, § 2; 1999, ch. 68, § 1; 2001, ch. 85, § 1; 2003, ch. 66, § 1; 2005, ch. 75, § 1; 2005, ch. 76, § 1; 2007, ch. 72, § 1; 2007, ch. 71, § 4; 2007, ch. 73, § 1; 2017, ch. 333, § 1, eff July 1, 2017; 2019, ch. 75, § 1, eff August 1, 2019; 2021, ch. 69, § 1, eff August 1, 2021; 2021, ch. 70, § 1, eff August 1, 2021; 2021, ch. 176, § 1, eff August 1, 2021; 2021, ch. 352, § 2, eff September 1, 2022.

5-01-08.1. Misrepresentation of age — Penalty — Licensee may keep book.

Any person who misrepresents or misstates that person’s age or the age of any other person or who misrepresents that person’s age through presentation of any document purporting to show that person to be of legal age to purchase alcoholic beverages is guilty of a class B misdemeanor. Any licensee may keep a book and may require anyone who has shown documentary proof of that person’s age, which substantiates that person’s age to allow the purchase of alcoholic beverages, to sign the book if the age of that person is in question. The book must show the date of the purchase, the identification used in making the purchase and the appropriate numbers of such identification, the address of the purchaser, and the purchaser’s signature.

Source:

S.L. 1971, ch. 100, § 1; 1975, ch. 106, § 31; 1987, ch. 98, § 1.

Notes to Decisions

Failure to Keep Book.

A vendor that did not keep a book of the kind formerly required by this section may not avail itself of the provisions of section 5-01-08.2. This section and section 5-01-08.2 must be considered together. Ross v. Scott, 386 N.W.2d 18 (N.D. 1986), decided prior to the 1987 amendment to this section by S.L. 1987, ch. 98.

5-01-08.2. Presumption of licensee’s innocence when certain facts established.

The establishment of the following facts by a person making a sale of alcoholic beverages to a person not of legal age constitutes prima facie evidence of innocence and a defense to any prosecution therefor:

  1. That the purchaser falsely represented and supported with other documentary proof that the purchaser was of legal age to purchase alcoholic beverages.
  2. That the appearance of the purchaser was such that an ordinary and prudent person would believe the purchaser to be of legal age to purchase alcoholic beverages.
  3. That the sale was made in good faith and in reliance upon the representation and appearance of the purchaser in the belief that the purchaser was of legal age to purchase alcoholic beverages.

Source:

S.L. 1971, ch. 100, § 2; 1987, ch. 98, § 2.

Notes to Decisions

Single Statutory Defense.

Reading the statute as a whole, it is clear that the three subsections do not present separate defenses. The false representation described in subsection (1) and the appearance of the purchaser described in subsection (2) are necessary elements of the good faith sale described in subsection (3). All three subsections must be satisfied in order to qualify for the single statutory defense established in this section. State v. Smokey's Steakhouse, 478 N.W.2d 361, 1991 N.D. LEXIS 228 (N.D. 1991).

DECISIONS UNDER PRIOR LAW

Failure to Keep Book.

A vendor that did not keep a book of the kind formerly required by N.D.C.C. § 5-01-08.1 could not avail itself of the provisions of this section. N.D.C.C. § 5-01-08.1 and this section must be considered together. Ross v. Scott, 386 N.W.2d 18 (N.D. 1986).

5-01-08.3. Proof of age — Seizure of false identification.

  1. A licensed retailer of alcoholic beverages or an employee of a licensed retailer may determine proof of age for purchasing or consuming an alcoholic beverage solely by inspection of one of the following:
    1. A valid driver’s license or identification card issued by this state, another state, or a province of Canada which includes the photograph and date of birth of the licensed individual;
    2. A valid military identification card issued by the United States department of defense; or
    3. A valid passport issued or recognized by the United States.
  2. A licensed retailer or an employee of a licensed retailer may seize a form of identification displayed as proof of age if the licensed retailer or an employee of a licensed retailer has a reasonable belief that the form of identification has been altered, falsified, or is being used to unlawfully obtain alcoholic beverages.
  3. Within twenty-four hours of seizing a form of identification as allowed under this section, a licensed retailer or an employee of a licensed retailer shall notify a law enforcement agency of the seizure and the law enforcement agency shall take possession of the identification within twenty-four hours after receipt of the notice.

Source:

S.L. 2011, ch. 71, § 1.

5-01-09. Delivery to certain persons unlawful.

  1. Any individual knowingly delivering alcoholic beverages to an individual under twenty-one years of age, except as allowed under section 5-02-06, or to an incompetent or an obviously intoxicated individual is guilty of a class A misdemeanor, subject to sections 5-01-08, 5-01-08.1, and 5-01-08.2.
  2. An individual under twenty-one years of age is immune from criminal prosecution under this section if that individual contacted law enforcement or emergency medical services and reported that another individual under twenty-one years of age was in need of medical assistance due to alcohol consumption, provided assistance to the individual in need of medical assistance until assistance arrived and remained on the scene and cooperated with medical assistance and law enforcement personnel on the scene, or was the individual in need of medical assistance. The maximum number of individuals that may be immune for any one occurrence is five individuals.
  3. If an individual is convicted of this section for delivering alcoholic beverages to an individual under twenty-one years of age, the court shall consider the following in mitigation:
    1. After consuming the alcohol, the underage individual was in need of medical assistance as a result of consuming alcohol; and
    2. Within twelve hours after the underage individual consumed the alcohol, the defendant contacted law enforcement or emergency medical personnel to report that the underage individual was in need of medical assistance as a result of consuming alcohol.

Source:

S.L. 1967, ch. 80, § 9; 1971, ch. 100, § 3; 1975, ch. 106, § 32; 1987, ch. 95, § 4; 1987, ch. 99, § 1; 1989, ch. 91, § 1; 2007, ch. 72, § 2; 2019, ch. 225, § 2, eff August 1, 2019.

Notes to Decisions

Appeal.

District court did not abuse its discretion when it denied defendant’s motion to refund fines and administrative fees incurred in relation to his criminal conviction for delivery of alcoholic beverages to a person under 21 years of age because, although defendant appealed his drug related convictions, he failed to appeal from the alcohol conviction because the case number for that conviction had not been included in his notice of appeal and defendant allowed the case to proceed through appeal, oral argument, and a written opinion by the Supreme Court of North Dakota without ever attempting to correct the notice of appeal. State v. Smith, 2006 ND 14, 709 N.W.2d 713, 2006 N.D. LEXIS 28 (N.D. 2006).

Cause of Intoxication.

This statute does not limit the unlawfulness of delivery of alcoholic beverages only to those intoxicated persons whose intoxication resulted from the use of alcoholic beverages. Meshefski v. Shirnan Corp., 385 N.W.2d 474, 1986 N.D. LEXIS 300 (N.D. 1986).

A vendor of alcoholic beverages should not deliver alcoholic beverages to a person who exhibits outward manifestation of intoxication, regardless of the cause of the intoxication. Meshefski v. Shirnan Corp., 385 N.W.2d 474, 1986 N.D. LEXIS 300 (N.D. 1986).

Liability Where Purchaser Shows Signs of Intoxication.

A vendor of alcoholic beverages may be held liable for damage caused by an intoxicated person who was sold alcoholic beverages at a time when he exhibited outward manifestations of intoxication, regardless of the cause of the intoxication. Meshefski v. Shirnan Corp., 385 N.W.2d 474, 1986 N.D. LEXIS 300 (N.D. 1986).

Proof of Alcoholic Beverage.

Evidence was sufficient to establish that beverage contained in a keg and delivered to a person under twenty-one years of age contained at least one-half of one percent of alcohol by volume, and was thus an alcoholic beverage, where the keg registration card signed by defendant indicated that the keg contained “Pabst” beer and where sheriff, who confiscated the keg, and other minors at the party gave opinion testimony that the keg contained beer. State v. Bohl, 317 N.W.2d 790, 1982 N.D. LEXIS 264 (N.D. 1982).

In prosecution for delivering an alcoholic beverage to a person under twenty-one years of age, state has the burden to prove that the beverage delivered is an alcoholic beverage, defined in essence as containing at least one-half of one percent of alcohol by volume; such burden is met where state proves the involved beverage is beer. State v. Bohl, 317 N.W.2d 790, 1982 N.D. LEXIS 264 (N.D. 1982).

Purpose.

The Legislature intended to fix liability on the maker of an illegal sale where such sale causes the intoxication of the person doing the damage. Ross v. Scott, 386 N.W.2d 18, 1986 N.D. LEXIS 304 (N.D. 1986).

Sale to Minor.

For liability under the Dram Shop Act to attach to an illegal sale of alcoholic beverages to a minor who becomes intoxicated, the minor need not have been intoxicated at the time of the sale. Ross v. Scott, 386 N.W.2d 18, 1986 N.D. LEXIS 304 (N.D. 1986).

DECISIONS UNDER PRIOR LAW

Improper Conviction.

A defendant was improperly convicted of obtaining liquor for minors under former section 5-01-26 where the evidence, although showing that defendant had purchased beer for minors, did not show that the beer contained more than four percent of alcohol by weight within the former statutory definition of “intoxicating liquor”. State v. Anderson, 116 N.W.2d 623, 1962 N.D. LEXIS 82 (N.D. 1962).

Liability.

As between the liquor merchant and a drinking companion, the legislature intended the responsibility and liability for serving alcoholic beverages to an intoxicated person to fall on the merchant (the dram shop). Aanenson v. Bastien, 438 N.W.2d 151, 1989 N.D. LEXIS 56 (N.D. 1989).

Collateral References.

Entrapment to commit crime of selling liquor, 55 A.L.R.2d 1322.

Criminal offense of selling liquor to a minor or permitting him to stay on licensed premises as affected by ignorance or mistake regarding his age, 12 A.L.R.3d 991.

Serving liquor to a minor in home as unlawful sale or gift, 14 A.L.R.3d 1186.

What constitutes violation of enactment prohibiting sale of intoxicating liquor to minor, 89 A.L.R.3d 1256.

Intoxicating liquors: employer’s liability for furnishing or permitting liquor on social occasion, 51 A.L.R.4th 1048.

Social host’s liability for death or injuries incurred by person to whom alcohol was served, 54 A.L.R.5th 313.

5-01-10. Bottle clubs prohibited — Penalty.

Any person operating an establishment whereby persons are allowed to bring their own alcoholic beverages on the premises where the proprietor sells soft drinks, mix, ice, or charges for bringing such beverages on the premises is guilty of a class B misdemeanor.

Source:

S.L. 1967, ch. 80, § 10; 1975, ch. 106, § 33.

5-01-11. Unfair competition — Penalty.

A manufacturer may not have any financial interest in any wholesale alcoholic beverage business. A manufacturer or wholesaler may not have any financial interest in any retail alcoholic beverage establishment and may not furnish any such retailer with anything of value. A retailer may not have any financial interest in any manufacturer, supplier, or wholesaler. A wholesaler may:

  1. Extend normal commercial credits to retailers for industry products sold to them. The state tax commissioner may determine by rule the definition of “normal commercial credits” for each segment of the industry.
  2. Furnish retailers with beer containers and equipment for dispensing of tap beer if the expense to the wholesaler associated with the furnishing of containers, equipment, and tap or coil cleaning service does not exceed one hundred fifty dollars per tap per calendar year.
  3. Furnish outside signs to retailers if the sign cost does not exceed four hundred dollars exclusive of costs of erection and repair.
  4. Furnish miscellaneous materials to retailers not to exceed one hundred dollars per year. “Miscellaneous materials” not subject to this limitation include any indoor point-of-sale items for retail placement. Point-of-sale items include back bar signs, pool table lights, neon window signs, and items of a similar nature. The point-of-sale items must be limited to five hundred dollars per retail account from the wholesaler for each of the wholesaler’s brewers or suppliers.

Any wholesaler, retailer, or manufacturer violating this section, or any rule adopted to implement this section, and any retailer receiving benefits thereby, is guilty of a class A misdemeanor. A microbrew pub is exempt from the provisions of this section to the extent that this section restricts the co-ownership of a manufacturer’s license and a retail license for the purpose of a microbrew pub.

Source:

S.L. 1967, ch. 80, § 11; 1975, ch. 106, § 34; 1977, ch. 60, § 1; 1989, ch. 92, § 1; 1991, ch. 75, § 2; 1995, ch. 74, § 2; 2001, ch. 84, § 3; 2005, ch. 73, § 2.

5-01-12. Duty to enforce. [Repealed]

Repealed by S.L. 1975, ch. 106, § 673.

5-01-13. State’s attorney’s inquiry.

The state’s attorney may subpoena persons and take sworn testimony concerning any alleged violation of the alcoholic beverage laws and may apply to the district court for an order compelling persons subpoenaed to appear and testify. Such witnesses shall receive the same fees and mileage as in a civil case in district court.

Source:

S.L. 1967, ch. 80, § 23.

DECISIONS UNDER PRIOR LAW

Analysis

Affidavit.

It made no difference whether the affidavit of a witness subpoenaed under former section showed an offense or not when filed with the information, for it was not a part of the information. State v. Stevens, 19 N.D. 249, 123 N.W. 888, 1909 N.D. LEXIS 100 (N.D. 1909).

Depositions.

The fact that a state’s attorney may have conducted a preliminary examination did not make it necessary for him to file the depositions and testimony taken along with the information. State v. Lesh, 27 N.D. 165, 145 N.W. 829, 1914 N.D. LEXIS 39 (N.D. 1914).

5-01-14. Microbrew pubs — Licensing — Taxes.

  1. A microbrew pub shall obtain a brewer license and a retailer license as required under this title. A microbrew pub may manufacture on the licensed premises, store, transport, sell to wholesale malt beverage licensees, and export no more than ten thousand barrels of malt beverages annually; sell malt beverages manufactured on the licensed premises; sell alcoholic beverages regardless of source to consumers for consumption on the microbrew pub’s licensed premises; and sell or direct ship malt beverages manufactured on the licensed premises to an individual in this state for consumption in accordance with section 5-01-16. A microbrew pub may not engage in any wholesaling activities. Except as provided in subsection 3, all sales and delivery of malt beverages to any other retail licensed premises may be made only through a wholesale malt beverage licensee. Beer manufactured on the licensed premises and sold by a microbrew pub directly to the consumer for consumption on or off the premises is subject to the taxes imposed pursuant to section 5-03-07, in addition to any other taxes imposed on brewers and retailers. A microbrew pub is required to file a monthly sales report with the tax commissioner by the fifteenth day of the month following the month in which the sales are made. The report must be prepared and submitted in a form and manner as prescribed by the tax commissioner. A microbrew pub is not precluded from retailing beer it purchases from a wholesaler. Complimentary samples of beer may not be in an amount exceeding sixteen ounces [.47 liter] per patron. A licensee may sell beer to any person for off-premises consumption if sold in a brewery-sealed container and the total amount sold to each person does not exceed five and sixteen-hundredths gallons [19.53 liters] per day. This section may not be superseded under chapters 11-09.1 and 40-05.1.
  2. The tax commissioner may issue a special event permit for not more than forty days per calendar year to a microbrew licensee which allows the licensee to give free samples of beer manufactured by the licensee, sell beer manufactured by the glass or in closed containers, or dispense beer manufactured by the licensee at a designated trade show, convention, festival, fundraiser, or other related special event hosted by a nonprofit organization unaffiliated with the licensee, or a similar event approved by the tax commissioner. This subsection is subject to local ordinances.
  3. A microbrew pub may transfer beer in bulk, as defined by section 5-01-01, manufactured by the microbrew pub to an affiliated microbrew pub licensee. For purposes of this subsection, “affiliated microbrew pub licensee” means a microbrew pub of which at least an eighty-five percent interest is owned by the microbrew pub measured annually and:
    1. The microbrew pub does not own more than three affiliated microbrew pub licensees;
    2. The microbrew pub licensee receiving the beer in bulk has produced no less than five thousand gallons [18927.06 liters] of beer on the premises in the preceding calendar year. For the purpose of calculating the production requirements, the production must be prorated based on the number of days beer was produced;
    3. The beer in bulk transferred in any calendar year constitutes no more than fifty percent of the beer being produced by the microbrew pub licensee receiving the beer; and
    4. For purposes of determining whether the ten thousand barrel production limit under subsection 1 is being exceeded, the beer being transferred is credited to the microbrew pub that manufactured the beer.
  4. A contractee brewer may contract with a contractor brewer to produce beer for the contractee brewer to the extent allowed by federal law under the following conditions:
    1. The contractee brewer and the contractor brewer must be licensed and owned separately;
    2. The contractee brewer must have a proper license issued under this section and maintain a physical brewing presence in the state;
    3. Beer brewed for a contractee brewer counts toward the contractee brewer’s annual barrels produced, and the beer does not count toward the contractor brewer’s annual barrels produced;
    4. The contractee brewer retains ownership of the product; and
    5. Each brewer is separately and distinctly responsible for compliance with this chapter.

Source:

S.L. 1991, ch. 75, § 3; 1995, ch. 74, § 3; 2009, ch. 87, § 2; 2019, ch. 76, § 1, eff August 1, 2019; 2021, ch. 71, § 1, eff August 1, 2021.

5-01-15. Penalty.

Any person who violates any provision of this title, or any rule adopted to implement this title, is guilty of a class B misdemeanor, unless the penalty is provided for elsewhere.

Source:

S.L. 1991, ch. 75, § 4.

5-01-16. Direct sale from out-of-state person to consumer — Penalty.

  1. A person in the business of selling alcoholic beverages may not knowingly or intentionally ship, or cause to be shipped, any alcoholic beverage from an out-of-state location directly to a person in this state who is not a licensed wholesaler in this state.
  2. A person in the business of transporting goods may not knowingly or intentionally transport, or cause to be transported, any alcoholic beverage directly to a person in this state who is not a licensed wholesaler in this state.
  3. For a first violation of subsection 1 or 2, the tax commissioner shall notify, by certified mail, the person and order that person to cease and desist any shipment of alcoholic beverages in violation of subsection 1 or 2 and shall assess a civil penalty of one hundred dollars for each illegal shipment. For a second violation of subsection 1 or 2, the tax commissioner shall assess a civil penalty of two hundred dollars for each illegal shipment. For any subsequent violation of subsection 1 or 2, the tax commissioner shall assess a civil penalty of five hundred dollars for each illegal shipment.
  4. The alcoholic beverage transported in violation of this section and the vehicle used in violation of this section are forfeitable property under chapter 29-31.1.
  5. This section does not apply to a transaction by a person holding a valid manufacturer’s or retailer’s license issued by the state of its domicile and if the person obtains a direct shipping license from and on a form prescribed by the tax commissioner before making a shipment. The annual fee for a direct shipping license is fifty dollars. Licensed direct shippers may sell and ship to an individual twenty-one years of age or older 7.13 gallons [27 liters] or less of wine, two hundred eighty-eight fluid ounces [8517.18 milliliters] or less of beer, or 2.38 gallons [9 liters] or less of any other alcoholic beverages per month for personal use and not for resale.
    1. A direct shipper shall ship all containers of alcoholic beverages shipped directly to a resident of this state using a licensed alcohol carrier and may cause the alcoholic beverages to be shipped by a licensed logistics company.
    2. A direct shipper shall label all containers of alcoholic beverages shipped directly to an individual in this state with conspicuous words “SIGNATURE OF PERSON AGE 21 OR OLDER REQUIRED FOR DELIVERY”.
    3. A licensed direct shipper shall report and pay the wholesaler excise tax and retailer sales taxes to the tax commissioner on all alcoholic beverages sold to residents in this state at the rates set forth in sections 5-03-07 and 57-39.6-02. The excise tax reports are due January fifteenth of the year following the year sales and shipments were made. When the fifteenth day of January falls on a Saturday, Sunday, or legal holiday, the due date is the first working day thereafter. The report must provide such detail and be in format as prescribed by the tax commissioner and include the identification of any logistics or fulfillment houses the licensee used for such shipments. The sales and use tax reports are due as set forth in chapter 57-39.6. The sales and use tax reports must be in a format as prescribed by the tax commissioner. The tax commissioner may require that the report be submitted in an electronic format approved by the tax commissioner.
    4. All alcoholic beverages that are shipped directly to a resident of this state must be properly registered with the federal alcohol and tobacco tax and trade bureau and must be owned by the licensed direct shipper.
  6. A licensed alcohol carrier may ship alcoholic beverages into, out of, or within this state. A licensed alcohol carrier shall pay an annual fee of one hundred dollars and obtain a license on an application form provided by the tax commissioner and subject to any requirements determined by the tax commissioner.
    1. A licensed alcohol carrier shall ensure all containers of alcoholic beverages shipped directly to an individual in this state are labeled with conspicuous words “SIGNATURE OF PERSON AGE 21 OR OLDER REQUIRED FOR DELIVERY”. A licensed alcohol carrier may not deliver alcoholic beverages to a person under twenty-one years of age, or to a person who is or appears to be in an intoxicated state or condition. A licensed alcohol carrier shall obtain valid proof of identity and age before delivery and shall obtain the signature of an adult as a condition of delivery.
    2. A licensed alcohol carrier shall maintain records of alcoholic beverages shipped into, out of, or within this state which include the name of the licensed direct shipper, the name of any licensed logistics shipper, the date of each shipment, the recipient’s name and address, and an electronic or paper form of signature from the recipient of the alcoholic beverages. A licensed alcohol carrier shall submit a report to the tax commissioner on a monthly basis in the form and format prescribed by the tax commissioner. The report is due on the last day of the month following the month of shipment. If the due date falls on a Saturday, Sunday, or legal holiday, the due date is the first working day after the due date. The tax commissioner may require that the report be submitted in an electronic format approved by the tax commissioner.
    3. If the tax commissioner has provided notice to a licensed alcohol carrier that a direct shipper is not licensed, the licensed alcohol carrier must notify the direct shipper that the direct shipper must obtain a direct shipper permit before tendering packages to the licensed alcohol carrier for delivery. Any assessed penalty may be waived by the tax commissioner for good cause upon request by the licensed alcohol carrier.
  7. Licensed logistics shippers must obtain a logistics shipping license from the tax commissioner and shall pay an annual fee of one hundred dollars before making or causing a shipment.
    1. A licensed logistics shipper shall ensure all containers of alcoholic beverages shipped directly to an individual in this state are labeled with conspicuous words “SIGNATURE OF PERSON AGE 21 OR OLDER REQUIRED FOR DELIVERY”.
    2. All containers of alcoholic beverage shipped directly to a resident of this state must be shipped using a licensed alcohol carrier as provided in subsection 6.
    3. A licensed logistics shipper shall maintain records of alcoholic beverages shipped which include the license number and name of the licensed direct shipper, the license number and name of the licensed common carrier, the date of each shipment, the quantity and kind of alcohol shipped, and the recipient’s name and address for each shipment. A licensed logistics shipper shall submit a report to the tax commissioner on a monthly basis in the form and format prescribed by the tax commissioner. The report is due on the last day of the month following the month of shipment. If the due date falls on a Saturday, Sunday, or legal holiday, the due date is the first working day after the due date. The tax commissioner may require that the report be submitted in an electronic format approved by the tax commissioner.
    4. Licensed logistics shippers may not ship alcoholic beverages from unlicensed direct shippers or through unlicensed carriers. For a violation, a licensed logistics shipper is subject to the penalties in subsection 3.
  8. The tax commissioner may initiate and maintain an action in a court of competent jurisdiction to enjoin a violation of this section and may request award of all costs and attorney’s fees incurred by the state incidental to that action. Upon determination by the tax commissioner that an illegal sale or shipment of alcoholic beverages has been made to a consumer in this state by any person, the tax commissioner may notify both the alcohol and tobacco tax and trade bureau of the United States department of the treasury and the licensing authority for the state in which the person is domiciled that a state law pertaining to the regulation of alcoholic beverages has been violated and may request those agencies to take appropriate action.

Source:

S.L. 1999, ch. 69, § 1; 2001, ch. 84, § 4; 2001, ch. 86, § 2; 2005, ch. 77, § 1; 2007, ch. 71, § 5; 2009, ch. 87, § 3; 2013, ch. 74, § 2; 2015, ch. 74, § 1, eff August 1, 2015.

Law Reviews.

Commerce — Intoxicating Liquors: Wine Lovers Rejoice! Why Vineyards Can Now Ship Directly to Consumers and Why Everyone Else Should Care (Granholm v. Heald, 544 U.S. 460 (2005)), 82 N.D. L. Rev. 557 (2006).

5-01-17. Domestic winery license.

  1. The tax commissioner may issue a domestic winery license to the owner or operator of a winery located within this state to produce wine. A domestic winery may purchase, at wholesale or retail, brandy for use of onpremises fortification. A domestic winery license may be issued and renewed for an annual fee of one hundred dollars, which is in lieu of all other license fees required by this title.
  2. A domestic winery may sell wine produced by that winery at on sale or off sale, in retail lots, and not for resale, and may sell or direct ship its wine to persons inside or outside of the state in a manner consistent with the laws of the place of the sale or delivery in total quantities not in excess of twenty-five thousand gallons [94635 liters] in a calendar year; glassware; wine literature and accessories; and cheese, cheese spreads, and other snack food items. A licensee may dispense free samples of the wines offered for sale. Subject to local ordinance, sales at on sale and off sale may be made on Sundays between eight a.m. and twelve midnight. The tax commissioner may issue special events permits for not more than forty events per calendar year to a domestic winery allowing the winery, subject to local ordinance, to give free samples of its wine and to sell its wine by the glass or in closed containers, at off-premises events. A domestic winery may not engage in any wholesaling activities. All sales and deliveries of wines to any other retail licensed premises in this state may be made only through a licensed North Dakota liquor wholesaler. For any month in which a domestic winery has made sales to a North Dakota wholesaler, that domestic winery shall file a report with the tax commissioner no later than the last day of each calendar month reporting sales made during the preceding calendar month. When the last day of the calendar month falls on a Saturday, Sunday, or legal holiday, the due date is the first working day thereafter.
  3. A domestic winery may obtain a domestic winery license and a retailer license allowing the onpremises sales of alcoholic beverages at a restaurant owned by the licensee and located on property contiguous to the winery.
  4. A domestic winery may purchase wine in bulk from within and outside the state, excluding label approved containers and not to exceed four thousand gallons [15142 liters] per calendar year.
  5. A domestic winery is subject to section 5-03-06 and shall report and pay annually to the tax commissioner the wholesaler taxes due on all wines sold by the licensee at retail, including all wines shipped directly to consumers as set forth in sections 5-03-07 and 57-39.6-02. The annual wholesaler tax reports are due January fifteenth of the year following the year sales were made. When the fifteenth of January falls on a Saturday, Sunday, or legal holiday, the due date is the first working day thereafter. The report must provide such detail and be in a format as prescribed by the tax commissioner. The tax commissioner may require that the report be submitted in an electronic format approved by the tax commissioner.

Source:

S.L. 2001, ch. 87, § 1; 2001, ch. 5, § 2; 2003, ch. 67, § 1; 2003, ch. 524, § 1; 2005, ch. 78, § 1; 2007, ch. 71, § 6; 2011, ch. 35, § 11; 2011, ch. 72, § 1; 2019, ch. 77, § 1, eff August 1, 2019; 2021, ch. 72, § 1, eff August 1, 2021.

5-01-18. Alcohol without liquid devices prohibited — Definition — Penalty.

  1. A person may not sell, offer to sell, purchase, possess, use, or if that person is a retail alcoholic beverage licensee, have on the premises an alcohol without liquid device. In this section, an “alcohol without liquid device” means an apparatus that is advertised, designed, or used to vaporize an alcoholic beverage to produce a vapor that may be inhaled by an individual. The term does not include an inhaler, nebulizer, atomizer, or other device that is designed and intended specifically for medical purposes to dispense prescribed or over-the-counter medications or water.
  2. This section does not apply to a hospital that operates primarily for the purpose of conducting scientific research, a state institution conducting bona fide research, a private college or university conducting bona fide research, or a pharmaceutical company or biotechnology company conducting bona fide research.
  3. A violation of this section is a class B misdemeanor.

Source:

S.L. 2007, ch. 74, § 1.

5-01-19. Domestic distillery.

  1. The tax commissioner may issue a domestic distillery license to the owner or operator of a distillery that is located within this state which uses a majority of North Dakota farm products to manufacture and sell spirits produced on the premises. A domestic distillery license may be issued and renewed for an annual fee of one hundred dollars. This fee is in lieu of all other license fees required by this title. The tax commissioner may not issue the domestic distillery license until the applicant has established that the applicant has applied for and obtained the necessary federal registrations and permits, as required under the Internal Revenue Code of 1986 [26 U.S.C. 5001 et seq.] and the federal Alcohol Administration Act [27 U.S.C. 203], for the operation of a distilled spirits plant.
  2. A domestic distillery may sell spirits produced by that distillery at on sale or off sale, in retail lots, and not for resale, and may sell or direct ship its spirits to persons inside or outside the state in a manner consistent with the laws of the place of the sale or delivery in total quantities not in excess of twenty-five thousand gallons [94635 liters] in a calendar year. Direct sales within this state are limited to two and thirty-eight hundredths gallons [9 liters] or less per month per person for personal use and not for resale. The packaging must conform with the labeling requirements in section 5-01-16. A licensee may dispense free samples of the spirits offered for sale. Subject to local ordinance, sales at on sale and off sale may be made on Sundays between eight a.m. and twelve midnight. A domestic distillery may hold events inside and outside its premises, but only on contiguous property under common ownership, allowing free samples of its spirits and to sell its spirits by the glass or in closed containers. The tax commissioner may issue event permits for not more than forty event days per calendar year to a domestic distillery allowing the domestic distillery, subject to local ordinance, to give free samples of its product and to sell its product by the glass or in closed containers, at off-premises events. A domestic distillery may not engage in any wholesaling activities. Except as provided by section 5-01-19.1, all sales and deliveries of spirits to any other retail licensed premises in this state may be made only through a licensed North Dakota liquor wholesaler. However, a domestic distillery may sell distilled spirits to a domestic winery if the distilled spirits were produced from products provided to the domestic distillery by the domestic winery. No later than the last business day of a calendar month, a farm distillery that has made sales to a North Dakota wholesaler during the preceding calendar month shall file a report with the tax commissioner reporting those sales.
  3. A domestic distillery may obtain a domestic distillery license and a retailer license allowing the onpremises sale of alcoholic beverages at a restaurant owned by the licensee and located on property contiguous to the domestic distillery. A domestic distillery also may own or operate a winery.
  4. A domestic distillery is subject to section 5-03-06 and shall report and pay annually to the tax commissioner the wholesaler taxes due on all spirits sold by the licensee at retail or to a retail licensee, including all spirits shipped directly to consumers as set forth in sections 5-03-07 and 57-39.6-02. The annual wholesaler tax reports are due January fifteenth of the year following the year sales were made. The report must provide the detail and be in a format as prescribed by the tax commissioner. The tax commissioner may require that the report be submitted in an electronic format approved by the tax commissioner.

Source:

S.L. 2009, ch. 89, § 1; 2011, ch. 35, § 12; 2011, ch. 72, § 2; 2019, ch. 78, § 1, eff April 24, 2019; 2021, ch. 72, § 2, eff August 1, 2021.

Note.

This section is set out above to reflect a correction from the state since the 2015 cumulative supplement. In subsection (2) “[94625 liters]” was changed to “[94635 liters]”.

5-01-19.1. Direct sale by domestic distilleries.

  1. A domestic distillery that produces no more than twelve thousand proof gallons [42000 liters] of spirits per year may sell and deliver, onsite or offsite, the spirits produced by the distillery directly to licensed retailers. The distillery may sell and deliver spirits onsite to a licensed retailer that presents the retailer’s license or a photocopy of the license. The distillery may deliver the spirits offsite if the distillery:
    1. Uses the distillery’s equipment, trucks, and employees to deliver the spirits;
    2. Contracts with a licensed distributor to ship and deliver the spirits to the retailer; or
    3. Contracts with a common carrier to ship and deliver the spirits to the retailer directly from the distillery or the distillery’s warehouse.
  2. The total amount of spirits each domestic distillery may sell or deliver directly to all licensed retailers may not exceed two hundred cases per year. Individual shipments delivered by common carrier may not exceed three cases a day for each licensed retailer. A case may not exceed two and thirty-eight hundredths gallons [9 liters].
  3. As used in this section, “proof gallon” means a gallon [3.78 liters] of liquid at sixty degrees Fahrenheit [15.5 degrees Celsius] which contains fifty percent ethyl alcohol by volume or its equivalent.

Source:

S.L. 2019, ch. 78, § 2, eff April 24, 2019.

5-01-19.2. Manufacturing distillery — Satellite locations.

  1. The tax commissioner may issue a manufacturing distillery license to the owner or operator of a distillery located within this state which uses a majority of North Dakota farm products to manufacture and sell spirits produced on the premises. A manufacturing distillery license may be issued and renewed for an annual fee of one hundred dollars. This fee is in lieu of all other license fees required by this title. The tax commissioner may not issue the manufacturing distillery license until the applicant has established the applicant has applied for and obtained the necessary federal registrations and permits, as required under the Internal Revenue Code of 1986 [26 U.S.C. 5001 et seq.] and the federal Alcohol Administration Act [27 U.S.C. 203], for the operation of a distilled spirits plant.
  2. A manufacturing distillery may sell spirits produced by that distillery at off sale, in retail lots, and not for resale, and may sell or direct ship its spirits to persons inside or outside the state in a manner consistent with the laws of the place of the sale or delivery in total quantities not in excess of twenty-five thousand gallons [94635 liters] in a calendar year. Direct sales within this state are limited to two and thirty-eight hundredths gallons [9 liters] or less per month per person for personal use and not for resale. The packaging must conform with the labeling requirements in section 5-01-16. A licensee may dispense free samples of the spirits offered for sale. Subject to local ordinance, sales at off sale may be made on Sundays between twelve noon and twelve midnight. A manufacturing distillery may hold events inside its premises and at its satellite location. The tax commissioner may issue event permits for not more than forty event days per calendar year to a manufacturing distillery to allow the manufacturing distillery, subject to local ordinance, to give free samples of its product and to sell its product by the glass or in closed containers at on-premises events and at its satellite location. A manufacturing distillery may not engage in any wholesaling activities. Except as provided by section 5-01-19.1, all sales and deliveries of spirits to any other retail licensed premises in this state may be made only through a licensed North Dakota liquor wholesaler. However, a manufacturing distillery may sell distilled spirits to a domestic winery if the distilled spirits were produced from products provided to the manufacturing distillery by the domestic winery.
    1. As used in this subsection, “samples” means the serving of free tastings of a manufacturing distillery’s products not to exceed six ounces [0.18 liter] of spirits per individual per day.
    2. A manufacturing distillery may operate one satellite location in addition to its licensed premises for the purpose of providing samples and on sale or off sale retail sales.
      1. The spirits sampled or sold at the satellite location must be produced by the manufacturing distillery.
      2. A manufacturing distillery may not produce any spirits at the satellite location.
      3. An event permit issued to a manufacturing distillery in accordance with subsection 2 for an indoor or outdoor event held at its satellite location does not count towards the forty event days per calendar year allowed under subsection 2. The manufacturing distillery may offer free samples of its spirits and may sell its spirits by the glass or in closed containers at the event held at the satellite location.
      4. The satellite location must be owned or leased by the manufacturing distillery licensee.
      5. A manufacturing distillery may not engage in wholesaling activities at its satellite location.
    3. A manufacturing distillery shall obtain a satellite location license from the tax commissioner before operating a satellite location. The tax commissioner may issue and renew a satellite location license for an annual fee of one hundred dollars. This fee is in addition to all other license fees required by this title.
    4. A manufacturing distillery is liable for any violation of alcohol or licensing requirements committed on the premises of its satellite location.
  3. A person may not hold a manufacturing distillery license and a domestic distillery license.
  4. A manufacturing distillery may obtain a manufacturing distillery license and a retailer license allowing the on-premises sale of alcoholic beverages at a restaurant owned by the licensee and located at the manufacturing distillery’s satellite location.
  5. A manufacturing distillery is subject to section 5-03-06 and shall report and pay annually to the tax commissioner the wholesaler taxes due on all spirits sold by the licensee at retail or to a retail licensee, including all spirits shipped directly to consumers as set forth in sections 5-03-07 and 57-39.6-02. The annual wholesaler tax reports are due January fifteenth of the year following the year sales were made. The report must provide the detail and be in a format as prescribed by the tax commissioner. The tax commissioner may require the report to be submitted in an electronic format approved by the tax commissioner.

Source:

S.L. 2021, ch. 73, § 1, eff March 18, 2021.

Note.

Section 2 of chapter 73, S.L. 2021, provides, “ TRANSITION PERIOD. After March 18, 2021, a domestic distillery license. After August 1, 2022, a domestic distillery licensee may not be issued a manufacturing distillery license.”

5-01-20. Direct sale by licensed wineries.

  1. A licensed winery that produces no more than twenty-five thousand gallons [94635 liters] of wine per year may sell and deliver, onsite or offsite, the wine produced by the winery directly to licensed retailers. The licensed winery may sell and deliver wine onsite to a licensed retailer who presents the retailer’s license or a photocopy of the license. The winery may deliver the wine offsite if the winery:
    1. Uses the winery’s equipment, trucks, and employees to deliver the wine;
    2. Contracts with a licensed distributor to ship and deliver the wine to the retailer; or
    3. Contracts with a common carrier to ship and deliver the wine to the retailer directly from the winery or the winery’s bonded warehouse.
  2. The shipments delivered by a winery’s equipment, trucks, and employees in a year may not exceed four thousand five hundred cases. A case may not exceed 2.38 gallons [9 liters].
  3. Individual shipments delivered by common carrier may not exceed three cases a day for each licensed retailer. The shipments delivered by a common carrier in a year may not exceed three thousand five hundred cases. A case may not exceed 2.38 gallons [9 liters].

Source:

S.L. 2013, ch. 75, § 1; 2019, ch. 77, § 2, eff August 1, 2019.

Effective Date.

This section became effective August 1, 2013.

5-01-21. Brewer taproom license.

  1. The tax commissioner may issue multiple brewer taproom licenses to the owner or operator of a brewery producing no more than twenty-five thousand barrels of malt beverages annually. A brewer with multiple taproom licenses must produce malt beverages at each location and the total amount of malt beverages produced at all locations combined may not exceed twenty-five thousand barrels of malt beverages annually. Each brewer taproom license may be issued and renewed for an annual fee of five hundred dollars, which is in lieu of all other state license fees required by this title. All provisions of this chapter which apply to a retail license must apply to a license issued under this section unless the provision is explicitly inconsistent with this section.
  2. A brewer holding a brewer taproom license may:
    1. Manufacture on the licensed premises, store, transport, sell, and export no more than twenty-five thousand barrels of malt beverages annually.
    2. Sell malt beverages manufactured on the licensed premises or through a contract for consumption on the premises of the brewery or a restaurant owned by the licensee and located on property contiguous to the brewery.
    3. Sell beer manufactured on the licensed premises or through a contract for off premises consumption in brewery-sealed containers of not more than five and sixteen-hundredths gallons [19.53 liters].
    4. Sell and deliver beer produced by the brewery to licensed beer wholesalers.
    5. Dispense free samples of beer offered for sale. Complimentary samples of beer may not be in an amount exceeding sixteen ounces [.47 liter] per patron.
    6. Sell and deliver beer produced by the brewery to licensed retailers within the state, but only if:
      1. The brewer uses the brewer’s own equipment, trucks, and employees to deliver the beer;
      2. Individual deliveries, other than draft beer, are limited to the case equivalent of eight barrels per day to each licensed retailer;
      3. The total amount of beer sold or delivered directly to all retailers does not exceed ten thousand barrels per year; and
      4. A common carrier is not used to ship or deliver the brewery’s product to the public or to licensed retailers. All other sales and deliveries of beer to licensed retailers in this state may be made only through a wholesaler licensed in this state.
    7. Sell or direct ship beer produced by the brewery to an individual in this state for consumption in accordance with section 5-01-16.
  3. The tax commissioner may issue special event permits for not more than forty days per calendar year to a brewer taproom licensee allowing the licensee, subject to local ordinance, to give free samples of its beer, sell its beer by the glass or in closed containers, or dispense beer manufactured by the licensee at a designated trade show, convention, festival, fundraiser or other related special event hosted by a nonprofit organization unaffiliated with the brewer taproom licensee, or a similar event approved by the tax commissioner.
  4. For any month in which a brewery has made sales to a wholesaler licensed in this state, that brewery shall file a report with the tax commissioner no later than the last day of each calendar month reporting sales made during the preceding calendar month. When the last day of the calendar month falls on a Saturday, Sunday, or legal holiday, the due date is the first working day after that day.
  5. A brewer taproom licensee is subject to section 5-03-06 and shall report and pay annually to the tax commissioner the wholesaler taxes due on all beer sold by the licensee at retail or to a retail licensee, including all beer sold directly to consumers as set forth in sections 5-03-07 and 57-39.6-02. The annual wholesaler tax reports are due January fifteenth of the year following the year sales were made. When the fifteenth of January falls on a Saturday, Sunday, or legal holiday, the due date is the first working day after that day. The report must provide the detail and be in a format as prescribed by the tax commissioner. The tax commissioner may require the report be submitted in an electronic format approved by the tax commissioner.
  6. A brewer may have multiple taproom licenses, but may not have an ownership interest in whole or in part, or be an officer, director, agent, or employee of any other manufacturer, brewer, importer, wholesaler, or retailer, or be an affiliate thereof, whether the affiliation is corporate or by management, direction, or control. A brewer may transfer beer in bulk, as defined by section 5-01-01, manufactured by the brewer to an affiliated brewer. For the purposes of this subsection, an “affiliated brewer taproom” means a licensed brewer taproom of which at least an eighty-five percent interest is owned by the brewer taproom, measured annually and:
    1. The brewer does not own more than three affiliated brewer taprooms;
    2. The licensed brewer taproom receiving the beer in bulk has produced no less than five thousand gallons [18927.06 liters] of beer on the premises in the preceding calendar year. For the purpose of calculating the production requirements, the production must be prorated based on the number of days beer was produced;
    3. The beer in bulk transferred in any calendar year constitutes no more than fifty percent of the beer being produced by the licensed brewer taproom receiving the beer; and
    4. For purposes of determining whether the twenty-five thousand barrel production limit under subsections 1 and 2 is being exceeded, the beer being transferred is credited to the brewer that manufactured the beer.
  7. A contractee brewer may contract with a contractor brewer to produce beer for the contractee brewer to the extent allowed by federal law under the following conditions:
    1. The contractee brewer and the contractor brewer must be licensed and owned separately;
    2. The contractee brewer must have a proper license issued under this section and maintain a physical presence in the state;
    3. Beer brewed for a contractee brewer counts toward the contractee brewer’s annual barrels produced, and the beer does not count toward the contractor brewer’s annual barrels produced;
    4. The contractee brewer retains ownership of product produced by a contractor brewer; and
    5. Each brewer is separately and distinctly responsible for compliance with this chapter.

Source:

S.L. 2013, ch. 76, § 1; 2015, ch. 75, § 1, eff August 1, 2015; 2019, ch. 76, § 2, eff August 1, 2019; 2021, ch. 71, § 2, eff August 1, 2021.

Effective Date.

This section became effective July 1, 2013.

5-01-22. Powdered alcohol products prohibited — Penalty — Exceptions.

  1. As used in this section, “powdered alcohol product” means any alcohol prepared or sold in a powder form for either direct use or reconstitution in a liquid beverage or food.
  2. A person may not sell, offer to sell, purchase, offer to purchase, possess, or consume a powdered alcohol product.
  3. A violation of this section is a class B misdemeanor.
  4. This section does not apply to the use of powdered alcohol products for research by a:
    1. Health care provider that operates primarily for the purpose of conducting scientific research;
    2. State institution;
    3. Private college or university; or
    4. Pharmaceutical or biotechnology company.

History. S.L. 2015, ch. 76, § 1, eff August 1, 2015.

Note.

This section is set out above to reflect a correction since the 2015 cumulative supplement. In the history citation “76” was substituted for “64”.

CHAPTER 5-02 Retail Licensing

5-02-01. State and local retail license required — Penalty — Exception.

  1. Except as otherwise provided in section 5-02-01.1, any person engaging in the sale of alcoholic beverages at retail without first securing an appropriate license from the attorney general and a local license from the governing body of any city, or if the business is located outside the corporate limits of a city, the board of county commissioners or the governing body of an Indian tribe, as the location requires, is guilty of a class A misdemeanor.
  2. This section does not apply to public carriers engaged in interstate commerce.
  3. This section does not apply to a nonprofit organization that sells an alcoholic beverage as part of a fundraising activity. As used in this subsection, fundraising activity includes an auction, raffle, or other prize contest for which consideration is given. If the alcoholic beverage is sold as part of a fundraising event, the sale may not be for consumption at that event.

Source:

S.L. 1967, ch. 80, § 14; 1975, ch. 106, § 35; 1985, ch. 107, § 1; 2003, ch. 65, § 2; 2011, ch. 73, § 1.

Cross-References.

Beverages must be licensed by state laboratories department, see § 19-08-04.

City excise tax on retail liquor sales, see § 40-05-02.2.

DECISIONS UNDER PRIOR LAW

Illegal Contract.

A contract to pay a license fee in excess of the maximum allowed was illegal and void and liquor dealer who agreed to pay an excessive license fee to a city in order to obtain an exclusive right to sell liquor in the municipality was in “pari delicto” with the city and could not recover excess in license fees paid. Krueger v. Hatton, 75 N.D. 489, 28 N.W.2d 749, 1947 N.D. LEXIS 85 (N.D. 1947).

New License.

A licensee who sought to continue in business after his license had expired had to apply for a new license the same as if he had never been licensed. Smith v. City of LaMoure, 77 N.D. 658, 44 N.W.2d 789, 1950 N.D. LEXIS 161 (N.D. 1950).

Repeal of Constitutional Provision.

The repeal of article 20 of the constitution which prohibited every form of liquor traffic did not affect section 185 of the constitution pertaining to government in industry, and the negation of the liquor traffic in section 185 continued in effect as though there had been no repeal. Egbert v. Dunseith, 74 N.D. 1, 24 N.W.2d 907, 1946 N.D. LEXIS 56 (N.D. 1946).

Collateral References.

Grant or renewal of liquor license as affected by fact that applicant held such license in the past, 2 A.L.R.2d 1329.

Withdrawal of application to procure liquor license, 73 A.L.R.2d 1223.

Transfer of retail liquor license or permit from one location to another, 98 A.L.R.2d 1123.

Liquor license as subject to execution or attachment, 40 A.L.R.4th 927.

Interplay between Twenty-First Amendment and Commerce Clause concerning state regulation of intoxicating liquors, 116 A.L.R.5th 149.

5-02-01.1. Event permit authorized — Penalty.

  1. The local governing body may by permit authorize a qualified alcoholic beverage licensee licensed under this chapter to engage in the sale of alcoholic beverages at events designated by the permit. For purposes of this section, “qualified alcoholic beverage licensee” means a licensee in a city that imposed a city lodging and restaurant tax on July 31, 1993, who paid the tax and who continues to pay any such tax imposed by the city or a licensee in a county, a licensee in a city that did not impose a city lodging and restaurant tax on July 31, 1993, or a tribal licensee. A fee for the local permit may be set by ordinance or resolution at not more than twenty-five dollars. The permit may not be valid for a period greater than fourteen days and may include Sundays. The local governing body may establish rules to regulate and restrict the operation of an event permit. Any person that dispenses, sells, or permits the consumption of alcoholic beverages in violation of this section or the conditions of a permit is guilty of a class B misdemeanor.
  2. The local governing body may authorize an individual under twenty-one years of age to attend the event but may not authorize the consumption or possession of an alcoholic beverage by an individual under twenty-one years of age.

Source:

S.L. 1977, ch. 61, § 1; 1979, ch. 111, § 1; 1985, ch. 107, § 2; 1991, ch. 77, § 1; 1993, ch. 63, § 1; 1999, ch. 70, § 1; 2003, ch. 65, § 3; 2017, ch. 14, § 19, eff May 3, 2017; 2021, ch. 74, § 1, eff August 1, 2021.

Notes to Decisions

Retail Liquor Licensing Authority.

The attorney general is the retail liquor licensing authority. Haugland v. Spaeth, 476 N.W.2d 692, 1991 N.D. LEXIS 180 (N.D. 1991).

Construing this section and N.D.C.C. § 5-02-02, together with N.D.C.C. §§ 23-09-02 and 23-09-16, and considering the chapters in which they are contained, the attorney general’s authority to issue retail liquor licenses is plenary, not derivative, and may be exercised independent of the exercise of the state health department’s authority to license and regulate restaurants. Haugland v. Spaeth, 476 N.W.2d 692, 1991 N.D. LEXIS 180 (N.D. 1991).

5-02-02. Qualifications for license.

A retail license may not be issued to any person unless the applicant files a sworn application, accompanied by the required fee, showing the following qualifications:

  1. The applicant, other than an organization, must be a legal resident of the United States and be a person of good moral character.
  2. If the applicant is:
    1. A corporation, then:
      1. The manager of the licensed premises and the officers and directors must be legal residents of the United States and persons of good moral character; and
      2. The shareholders:
        1. Who are individuals, must be legal residents of the United States and of good moral character; and
        2. Which are organizations, must meet the requirements of this section for applicants which are organizations.
    2. A limited liability company, then:
      1. The manager of the licensed premises and the managers and governors must be legal residents of the United States and of good moral character.
      2. The members:
        1. Who are individuals, must be legal residents of the United States and of good moral character; and
        2. Which are organizations, must meet the requirements of this section for applicants that are organizations.
      3. The applicant must first be properly registered with the secretary of state.
    3. A limited partnership, then:
      1. The manager of the licensed premises must be a legal resident of the United States and of good moral character.
      2. The general partners and limited partners:
        1. If individuals, must be legal residents of the United States and of good moral character; and
        2. If organizations, must meet the requirements of this section for applicants that are organizations.
      3. The applicant must first be properly registered with the secretary of state.
    4. A general partnership, then:
      1. The manager of the licensed premises must be a legal resident of the United States and of good moral character; and
      2. The partners:
        1. Who are individuals, must be legal residents of the United States and of good moral character; and
        2. Which are organizations, must meet the requirements of this section for applicants that are organizations.
    5. A limited liability partnership, then:
      1. The manager of the licensed premises must be a legal resident of the United States and of good moral character; and
      2. The partners:
        1. Who are individuals, must be legal residents of the United States and of good moral character; and
        2. Which are organizations, must meet the requirements of this section for applicants that are organizations.
  3. The applicant or manager must not have been convicted of an offense determined by the attorney general to have a direct bearing upon an applicant’s or manager’s ability to serve the public as an alcoholic beverage retailer, or, following conviction of any offense, is determined not to be sufficiently rehabilitated under section 12.1-33-02.1.
  4. The building in which business is to be conducted must meet local and state requirements regarding the sanitation and safety.
  5. The applicant for a state license must have first secured a local license.
  6. The attorney general, or local governing body, may require the applicant to set forth such other information in the application as necessary to enable them to determine if a license should be granted.
  7. The applicant may not have any financial interest in any wholesale alcoholic beverage business.
  8. As a condition precedent to a background check, the attorney general may require the applicant to pay, in advance, an estimated additional fee necessary to defray the actual cost of a background check of a person for whom adequate background information sources are not readily available. The estimated additional fee must be placed in the attorney general’s refund fund for use to defray the actual expenses of the background check. The remainder of the funds must be returned to the person within thirty days of the conclusion of the background check. In addition, the attorney general may require the applicant or such other person subject to a background check to execute a written consent if needed by the attorney general to obtain background or criminal history information.

Corporate applicants must first be properly registered with the secretary of state.

Limited liability partnership applicants must first be properly registered with the secretary of state.

Source:

S.L. 1967, ch. 80, § 15; 1977, ch. 130, § 1; 1983, ch. 108, § 1; 1991, ch. 75, § 5; 1995, ch. 55, § 3; 1995, ch. 103, § 3; 1997, ch. 75, § 1; 2009, ch. 90, § 1.

Cross-References.

Definition of offense, see § 12.1-01-04.

Notes to Decisions

Attorney General.
—Jurisdiction to Deny Licenses.

Where the district court concluded that the administrative process would be insufficient to review the denial of liquor licenses, a writ of certiorari was a proper means of determining whether the attorney general acted within his jurisdiction in deciding whether or not to issue the licenses. Lamplighter Lounge v. State ex rel. Heitkamp, 510 N.W.2d 585, 1994 N.D. LEXIS 3 (N.D. 1994).

Local Residency Requirement.

City ordinance requiring applicant for a liquor license to be a resident of the city is not preempted by, nor in conflict with, the state licensing laws. In re Retail Liquor License No. 15, 283 N.W.2d 170, 1979 N.D. LEXIS 286 (N.D. 1979).

Res Judicata.

Where a licensing authority has attempted to revoke an existing license for specific conduct and has failed on the merits to do so, it has no jurisdiction to subsequently use that same conduct as reason to deny a renewal of the license. Lamplighter Lounge v. State ex rel. Heitkamp, 510 N.W.2d 585, 1994 N.D. LEXIS 3 (N.D. 1994).

Retail Liquor Licensing Authority.

The attorney general is the retail liquor licensing authority. Haugland v. Spaeth, 476 N.W.2d 692, 1991 N.D. LEXIS 180 (N.D. 1991).

Construing N.D.C.C. § 5-02-01 and this section, together with N.D.C.C. §§ 23-09-02 and 23-09-16, and considering the chapters in which they are contained, the attorney general’s authority to issue retail liquor licenses is plenary, not derivative, and may be exercised independent of the exercise of the state health department’s authority to license and regulate restaurants. Haugland v. Spaeth, 476 N.W.2d 692, 1991 N.D. LEXIS 180 (N.D. 1991).

DECISIONS UNDER PRIOR LAW

Constitutionality.

A law making mere possession of liquor an offense did not contravene any legislative power fixed by section 217 of the constitution. State v. Ligaarden, 59 N.D. 475, 230 N.W. 729, 1930 N.D. LEXIS 165 (N.D. 1930).

Conviction.

Proof of one sale of intoxicating liquor was sufficient to warrant conviction for engaging in liquor traffic under S.L. 1923, ch. 268, as amended. State v. Panchuk, 53 N.D. 669, 207 N.W. 991, 1926 N.D. LEXIS 20 (N.D. 1926).

Issuance of License.

The only provisions in the law relating to the qualifications of an applicant for a license were contained in former section 5-03-02, and the authority to issue a license for the retail sale of liquors was conferred upon and vested exclusively in the governing body of the city or village where the business was to be carried on. Smith v. City of LaMoure, 77 N.D. 658, 44 N.W.2d 789, 1950 N.D. LEXIS 161 (N.D. 1950).

Presumption.

The presumption existed under C. L. 1913, § 7936, and other statutes, that a person was the owner of intoxicating liquor found in his possession and that he had knowledge thereof. State v. Stern, 64 N.D. 593, 254 N.W. 765, 1934 N.D. LEXIS 238 (N.D. 1934).

Collateral References.

Grant or renewal of liquor license as affected by fact that applicant held such license in the past, 2 A.L.R.2d 1239.

5-02-02.1. Sale of alcoholic beverages in gas stations, grocery stores, and convenience stores.

Before a state retail off sale alcoholic beverage license may be issued to a person whose business to be licensed is located in a building that is primarily a gas station, grocery store, or convenience store, the area to be licensed for the sale of alcoholic beverages must be clearly set out in a blueprint or diagram. The area licensed for the sale of alcoholic beverages must be separated from the nonlicensed portion of the business by a wall designed to allow sales personnel to serve customers and make sales in both the licensed and unlicensed portions of the premises, and that may allow customers in either portion of the premises access to the other portion.

Source:

S.L. 1989, ch. 95, § 1.

5-02-03. Local license fees.

The fee for an annual local on and off sale liquor license must be set by ordinance or resolution at not less than two hundred dollars nor more than two thousand dollars, except outside the corporate limits of a city the fee shall not exceed one thousand dollars. The fee for an annual on and off sale local beer license must be set by ordinance or resolution at not less than fifty dollars nor more than five hundred dollars. The fee for an annual local exclusive on sale liquor license must be set by ordinance or resolution at not less than two hundred dollars nor more than two thousand dollars, except outside the corporate limits of a city the fee must not exceed one thousand dollars. The fee for an annual local exclusive on sale local beer license must be set by ordinance or resolution at not less than fifty dollars nor more than five hundred dollars. The fee for an annual local exclusive off sale beer or off sale liquor license must not be more than the fee charged for an on and off sale license. The local governing body may by ordinance or resolution provide for issuance of licenses for any period not to exceed one year and may allow for proration and refunds of license fees. In addition to any other license fee permitted by this section, a license fee may be increased by not more than five dollars for each Sunday the licensee sells alcoholic beverages.

Source:

S.L. 1967, ch. 80, § 16; 1977, ch. 62, § 1; 1993, ch. 63, § 2.

DECISIONS UNDER PRIOR LAW

License Fees.

Where an initiated measure recognized liquor traffic as an evil, and delegated to a municipality power to regulate the sale of beer, and to impose license charges, a city ordinance requiring license fees ranging from twenty-five to two hundred dollars was not void on the theory that the charges were disproportionate to regulatory costs and the reasonableness of license charges was not reviewable. Fylken v. Minot, 66 N.D. 251, 264 N.W. 728, 1936 N.D. LEXIS 169 (N.D. 1936).

5-02-04. State license fee.

The fee for an annual state beer or liquor license is fifty dollars each, except in cities over five hundred population at the last federal decennial census, the fee is one hundred dollars for each license. The fee for an annual state license will be charged on a calendar-year basis. License fees will be prorated from the first day of the month in which the license is issued up to the last day of the month in which such license expires, except that no license fee will be less than twenty-five dollars. A reinstatement fee of one hundred dollars is required in addition to the annual license fee for each license renewal applied for after December thirty-first.

Source:

S.L. 1967, ch. 80, § 17; 1977, ch. 62, § 2; 1983, ch. 106, § 2; 1991, ch. 78, § 1.

5-02-05. Dispensing prohibited on certain days — Penalty.

A person may not dispense or permit the consumption of alcoholic beverages on a licensed premises between two a.m. and eight a.m., on Christmas Day, or after six p.m. on Christmas Eve. In addition, a person may not provide off sale after two a.m. on Thanksgiving Day or between two a.m. and eight a.m. on Sundays. A person that violates this section is guilty of a class A misdemeanor.

Source:

S.L. 1967, ch. 80, § 18; 1969, ch. 94, § 3; 1973, ch. 63, § 1; 1975, ch. 106, § 36; 1979, ch. 112, § 1; 1985, ch. 108, § 1; 1987, ch. 100, § 2; 1989, ch. 93, § 1; 1991, ch. 79, § 1; 1993, ch. 63, § 3; 1993, ch. 64, § 1; 2005, ch. 74, § 2; 2005, ch. 79, § 1; 2007, ch. 75, § 1; 2015, ch. 78, § 1, eff August 1, 2015; 2021, ch. 72, § 3, eff August 1, 2021.

Notes to Decisions

Uniform Time Act.

Under statute making it unlawful to sell alcoholic beverages between one o’clock a.m. and eight o’clock a.m., use of Mountain Standard Time by liquor establishments to determine opening and closing hours was illegal where Central Standard Time was established by Uniform Time Act of 1966. State ex rel. Schirado v. Frye, 157 N.W.2d 830, 1968 N.D. LEXIS 110 (N.D. 1968).

Collateral References.

Admissibility, in prosecution for illegal sale of liquor, of other sales, 40 A.L.R.2d 817.

Entrapment to commit offense against laws regulating liquor sales, 55 A.L.R.2d 1322.

5-02-05.1. Sunday alcoholic beverage permit — Penalty. [Repealed]

Source:

S.L. 1979, ch. 112, § 2; 1981, ch. 103, § 1; 1985, ch. 109, § 1; 1989, ch. 93, § 2; 1989, ch. 94, § 1; 1991, ch. 77, § 2; 1993, ch. 63, § 4; 2003, ch. 65, § 4; 2007, ch. 75, § 2; Repealed by 2017, ch. 104, § 2, eff August 1, 2017.

5-02-05.2. Local approval of Sunday beer and wine sales by eating establishments — Fee. [Repealed]

Repealed by S.L. 1993, ch. 63, § 6.

5-02-06. Prohibitions for individuals under twenty-one years of age — Penalty — Exceptions.

  1. Except as permitted in this section, a licensee who dispenses alcoholic beverages to an individual under twenty-one years of age, or who permits an individual under twenty-one years of age to remain on the licensed premises while alcoholic beverages are being sold or displayed, is guilty of a class A misdemeanor, subject to sections 5-01-08, 5-01-08.1, and 5-01-08.2.
  2. An individual under twenty-one years of age may enter and remain on a licensed premises while alcohol is being sold or displayed, at the discretion of the owner of the licensed premises, if:
    1. The individual is accompanied by a parent or guardian who is twenty-one years of age or older. For purposes of this section, “guardian” means an individual who has the legal responsibility for the health and well-being of the individual under twenty-one years of age;
    2. The individual is on the premises to consume a meal or in an emergency situation;
    3. The premises serves at a tabletop, food that is prepared in a kitchen with at least an indoor grill;
    4. The individual is not on the licensed premises after ten p.m.; and
    5. The owner of the licensed premises receives permission of the local licensing authority for individuals to be on the premises as allowed under this section and the licensed premises is located in a city with a population of one thousand five hundred or fewer people, or the licensed premises is not located in a city.
    1. At the discretion of the owner of the licensed premises, an individual under twenty-one years of age may be permitted to enter and remain in a restaurant where alcoholic beverages are being sold and in the area of the restaurant designated for the opening or mixing of alcoholic beverages if the individual:
      1. Is accompanied by a parent or guardian;
      2. Is not seated at or within three feet [0.91 meters] of the bar counter; and
      3. Does not enter or remain in the designated area after ten p.m.
    2. An individual under twenty-one years of age may be permitted to remain in a restaurant where alcoholic beverages are being sold if the restaurant is separated from the designated area in which alcoholic beverages are opened or mixed and gross sales of food are at least equal to gross sales of alcoholic beverages which are consumed in the dining area, or if the individual is employed by the restaurant as a food waiter, food waitress, busboy, or busgirl under the direct supervision of an individual twenty-one years of age or older and is not engaged in the sale, dispensing, delivery, or consumption of alcoholic beverages.
  3. An individual under twenty-one years of age may enter and remain on the licensed premises if the individual is an independent contractor or the independent contractor’s employee engaged in contract work and is not engaged in selling, dispensing, delivering, or consuming alcoholic beverages; if the individual is a law enforcement officer or other public official who enters the premises in the performance of official duty; or if the individual enters the licensed premises for training, education, or research purposes under the supervision of an individual twenty-one or more years of age with prior notification of the local licensing authority.
  4. An individual under twenty-one years of age may attend an event where alcoholic beverages are sold in accordance with the conditions of an event permit issued pursuant to section 5-02-01.1.
  5. A restaurant may employ an individual who is eighteen years of age or older but under twenty-one years of age as provided in subsection 3 to serve and collect money for alcoholic beverages, if the individual is under the direct supervision of an individual twenty-one or more years of age, but may not be engaged in mixing, dispensing, or consuming alcoholic beverages. Any establishment that sells alcoholic beverages may employ an individual from eighteen to twenty-one years of age to work on the premises as a musician, disc jockey, or entertainer, or to perform duties directly related to working as a musician, disc jockey, or entertainer if the individual is under the direct supervision of an individual twenty-one or more years of age.
  6. For purposes of this section, an individual is not twenty-one years of age until eight a.m. on that individual’s twenty-first birthday.
  7. If an individual is convicted of this section, the court shall consider the following in mitigation:
    1. After consuming the alcohol, the underage individual was in need of medical assistance as a result of consuming alcohol; and
    2. Within twelve hours after the underage individual consumed the alcohol, the defendant contacted law enforcement or emergency medical personnel to report that the underage individual was in need of medical assistance as a result of consuming alcohol.

Source:

S.L. 1967, ch. 80, § 19; 1971, ch. 99, § 2; 1971, ch. 100, § 4; 1973, ch. 64, § 1; 1975, ch. 64, § 2; 1975, ch. 106, § 37; 1977, ch. 63, § 1; 1983, ch. 106, § 3; 1989, ch. 91, § 2; 1999, ch. 70, § 2; 2001, ch. 85, § 2; 2003, ch. 66, § 2; 2005, ch. 75, § 2; 2005, ch. 76, § 2; 2007, ch. 72, § 3; 2009, ch. 91, § 1; 2015, ch. 79, § 1, eff August 1, 2015; 2017, ch. 72, § 1, eff August 1, 2017; 2021, ch. 74, § 2, eff August 1, 2021; 2021, ch. 75, § 1, eff August 1, 2021.

Note.

Section 05-02-06 was amended 2 times by the 2021 Legislative Assembly. Pursuant to Section 1-02-09.1, the section is printed above to harmonize and give effect to the changes made in Section 1 of Chapter 75, Session Laws 2021, House Bill 1184; and Section 2 of Chapter 74, Session Laws 2021, House Bill 1284.

Cross-References.

Delivery of alcoholic beverages to certain persons unlawful, see § 5-01-09.

Notes to Decisions

Elements of Offense.

Willfulness is not an element of the offense of dispensing alcoholic beverages to a person under twenty-one years of age. City of Dickinson v. Mueller, 261 N.W.2d 787, 1977 N.D. LEXIS 172 (N.D. 1977).

Municipal Ordinance Regulating Same Offense.

A provision of the Fargo Municipal Code that regulated the same offense as N.D.C.C. § 5-02-06, but provided that a violation constituted a class B misdemeanor carrying a penalty of a fine not to exceed $500, or imprisonment not to exceed 30 days, or both, did not supersede the state statute in violation of N.D.C.C. § 12.1-01-05, although it provided a lesser penalty than that mandated by the state statute. N.D.C.C. § 40-05-01(29) granted municipalities the power to regulate the use and licensure of alcoholic beverages while N.D.C.C. § 40-05-06 limited their ability to impose a penalty greater than a class B misdemeanor; the penalty of a municipal ordinance could differ from the penalty imposed by the state law in those situations in which the municipality authorized imposition of up to the maximum allowable municipal penalty that was lesser than the state law penalty for an equivalent statute. City of Fargo v. Little Brown Jug, 468 N.W.2d 392, 1991 N.D. LEXIS 72 (N.D. 1991).

The regulation of the use and sale of alcohol by a municipality is limited to imposing a penalty equal to a class B misdemeanor. City of Fargo v. Little Brown Jug, 468 N.W.2d 392, 1991 N.D. LEXIS 72 (N.D. 1991).

No Culpability Requirement.

There is no culpability requirement under this section. State v. Smokey's Steakhouse, 478 N.W.2d 361, 1991 N.D. LEXIS 228 (N.D. 1991).

Law Reviews.

Intoxicating Liquors — Persons Liable: North Dakota Extends Statutory Dram Shop Liability to Social Hosts, 71 N.D. L. Rev. 743 (1995).

5-02-07. Sale of other items restricted — Penalty. [Repealed]

Repealed by S.L. 1975, ch. 106, § 673.

5-02-07.1. Sale of alcoholic beverages in exchange for goods prohibited.

Any licensee engaged in the retail sale of alcoholic beverages who accepts goods, chattels, or other tangible personal property, other than money, checks, legal tender, negotiable instruments, or other evidences of debt, in exchange for any alcoholic beverages is guilty of a class B misdemeanor.

Source:

S.L. 1975, ch. 65, § 1.

5-02-07.2. Sale of beer in kegs — Registration and marking required.

  1. Any retail alcoholic beverage licensee who sells beer in a container with a liquid capacity greater than six gallons [22.71 liters] must place the licensee’s state retail alcoholic beverage license number on the container and also must mark the container with a “registration” number or letters, or both, unique to that container. The paint or ink used to mark the containers or other manner of marking the containers must be approved by the attorney general.
  2. Whenever a retail alcoholic beverage licensee sells beer in a container with a liquid capacity greater than six gallons [22.71 liters], the licensee shall record the date of sale and the name, address, and driver’s license number or number of other official state or military identification card of the person to whom the beer is sold, together with the signature, and registration number, or letters of the container, or both. Such records must be retained for a period of no less than six months and must be kept on the licensed premises of the retail establishment where the sales are made.
  3. Each retail alcoholic beverage licensee shall permit any law enforcement officer to inspect the records required to be kept pursuant to this section during times the retail establishment is normally open for business or at other reasonable times.
  4. This section does not apply to the sale of beer in a container by a retail alcoholic beverage licensee if the contents of the container are consumed on the licensed premises where the sale occurred.

Source:

S.L. 1983, ch. 106, § 5; 1997, ch. 76, § 1.

5-02-08. Disorderly conduct prohibited — Penalty. [Repealed]

Repealed by S.L. 1975, ch. 106, § 673.

5-02-09. Local regulations.

The local governing body by ordinance or resolution may regulate or restrict the operation of licensees, including among other things determining the number of licenses to be granted, establishing health and safety standards for licensed premises, setting of hours, regulation of open door policies by fraternal organizations or private clubs, and regulation of dancing or various forms of entertainment on the premises.

Source:

S.L. 1967, ch. 80, § 22; 1997, ch. 77, § 1; 2005, ch. 74, § 3.

Cross-References.

Power of municipality to regulate use and sale of alcoholic beverages, see § 40-05-01, subs. 29.

Notes to Decisions

Amendments to Ordinances.

Regardless of whether or not this section authorizes a city to regulate liquor licenses in the first instance by resolution, once a city has taken upon itself to regulate by means of an ordinance scheme, N.D.C.C. § 40-11-09 requires that amendments to such ordinances be accomplished by another ordinance rather than by resolution; resolution was ineffective as an amendment to city’s existing liquor licensing ordinances. Mini Mart v. City of Minot, 347 N.W.2d 131, 1984 N.D. LEXIS 274 (N.D. 1984).

Judicial Restraint.

In reviewing a municipality’s issuance or denial of a liquor license, Supreme Court adheres to traditional virtues of judicial restraint and does not act as a super board of review. Lynch v. Williston City Comm'n, 460 N.W.2d 136, 1990 N.D. LEXIS 187 (N.D. 1990).

Local Obscenity Ordinances.

The provisions of N.D.C.C. § 12.1-27.1-01, which specifically apply to establishments licensed to sell alcoholic beverages under the provisions of this chapter, preempt that field of regulation; and, notwithstanding the provisions of this section, local governments do not have the power to enact obscenity ordinances relating to such establishments. Grafton v. Four G's, 252 N.W.2d 879, 1977 N.D. LEXIS 262 (N.D. 1977), decided prior to the amendment to § 12.1-27.1-12 by Session Laws 1979, ch. 184.

City had authority to enact ordinance that prohibited liquor licensees from allowing sexually explicit or obscene entertainment on the licensed premises; N.D.C.C. ch. 12.1-27.1, as amended by S.L. 1979, ch. 184, did not preempt such ordinance. Olson v. West Fargo, 305 N.W.2d 821, 1981 N.D. LEXIS 302 (N.D. 1981).

Public Hearing.

Supreme Court will not overturn discretionary act by local commission for failure to publish notice and hold a public hearing in accordance with the published notice when that issue was never raised before the commission, which, therefore, was not given an opportunity to correct the error, if any, before rendering a final decision. An issue not raised in an initial proceeding ordinarily may not be raised on appeal. Lynch v. Williston City Comm'n, 460 N.W.2d 136, 1990 N.D. LEXIS 187 (N.D. 1990).

Rules Governing Premises.

The governing body of a city may refuse to issue a license where the premises described in the application for the license do not comply with prescribed standards. Thielen v. Kostelecky, 69 N.D. 410, 287 N.W. 513, 1939 N.D. LEXIS 166 (N.D. 1939).

Transfer of License upon Default on Mortgage.

A liquor license has the qualities of an intangible property right as to third parties, and thus an agreement between mortgagors and mortgagee providing for transfer of liquor license to the party designated by mortgagee upon default was not invalid. Federal Sav. & Loan Ins. Corp. v. Morque, 372 N.W.2d 872, 1985 N.D. LEXIS 369 (N.D. 1985).

Writ of Certiorari.

Judicial review of local commission’s transfer of liquor licenses upon a writ of certiorari is limited to the question of whether the commission exceeded its jurisdiction. Lynch v. Williston City Comm'n, 460 N.W.2d 136, 1990 N.D. LEXIS 187 (N.D. 1990).

DECISIONS UNDER PRIOR LAW

Judicial Review.

Former section provided for the review by the courts of the revocation for cause of a license that had been issued, but did not grant to an applicant for a liquor license a right of review by the courts of a decision by a city council refusing to issue a license. Smith v. City of LaMoure, 77 N.D. 658, 44 N.W.2d 789, 1950 N.D. LEXIS 161 (N.D. 1950).

Limit on Licenses.

The governing body of a city had the power to fix, by ordinance, a reasonable limit on the number of retail liquor licenses to be issued, and thus limit the number of liquor stores which could be operated in the city at any one time. Thielen v. Kostelecky, 69 N.D. 410, 287 N.W. 513, 1939 N.D. LEXIS 166 (N.D. 1939).

Prohibition on Sunday Sales.

A city ordinance prohibiting the sale of beer on Sunday was valid as a proper exercise of regulatory power delegated to municipal authorities by an initiated measure respecting the manufacture and sale of beer, notwithstanding the statute permitted the sale of nonintoxicating beverages and foods on Sunday. Fylken v. Minot, 66 N.D. 251, 264 N.W. 728, 1936 N.D. LEXIS 169 (N.D. 1936).

The statute relating to Sunday observance and prohibiting sale on Sunday of intoxicating beverages was not repealed by implication by the later measure authorizing the manufacture, sale, and distribution of beer, nor by the Liquor Control Act. State v. Young, 68 N.D. 300, 279 N.W. 251, 1938 N.D. LEXIS 112 (N.D. 1938).

Collateral References.

Security interests in liquor licenses, 56 A.L.R.4th 1131.

Zoning regulation of intoxicating liquor as pre-empted by state law, 65 A.L.R.4th 555.

Law Reviews.

For Case Comment: Constitutional Law — Freedom of Speech, Expression: Protecting Main Street? The North Dakota Supreme Court Analyzes Whether an Ordinance Regulating Exotic Dancing and Adult Entertainment Violates Free Speech and Constitutes a Regulatory Taking (McCrothers Corp. v. City Of Mandan, 2007 ND 28, 728 N.W.2d 124), see 84 N.D. L. Rev. 495 (2008).

5-02-09.1. Attorney general to adopt rules.

The attorney general pursuant to chapter 28-32 shall adopt rules necessary to carry out the provisions of this chapter.

Source:

S.L. 1983, ch. 106, § 4.

5-02-10. Hearing on alleged violations.

Any person having information that a licensed retailer of alcoholic beverages has violated any provisions of this title may file with the attorney general, city attorney, or state’s attorney an affidavit specifically setting forth such violation. Upon receipt of such affidavit, the city attorney or state’s attorney shall set the matter for hearing not later than the next regular meeting of the local governing body or forward such affidavit to the attorney general. Upon receipt of any such affidavit, the attorney general shall set the matter for hearing in the local county courthouse not less than ten days after copies of the affidavit and notice of hearing have been mailed to the licensee by registered mail. If the hearing is held by the local governing body, a copy of this affidavit and notice of hearing must be mailed to the licensee by registered mail not less than five days before such hearing. A record of such hearings will be made by stenographic notes or the use of an electronic recording device.

Source:

S.L. 1967, ch. 80, § 23; 2003, ch. 65, § 5.

Cross-References.

“Registered mail” defined to include certified mail, see § 1-02-36.

Notes to Decisions

Initial Decision to Grant or Deny Liquor License.

Although this section provides that record of hearings on alleged violations of liquor provisions be made by stenographic notes or the use of an electronic recording device, and although N.D.C.C. § 5-02-11 provides that appeals from governing bodies suspending or revoking liquor licenses are governed by N.D.C.C. ch. 28-32, no such requirements exist in proceedings regarding a municipality’s initial decision to grant or deny a liquor license application by a first time applicant. Mini Mart v. City of Minot, 347 N.W.2d 131, 1984 N.D. LEXIS 274 (N.D. 1984).

DECISIONS UNDER PRIOR LAW

Jurisdiction.

An affidavit and complaint duly mailed to defendant by registered mail with the notice of hearing and specifying the charge with clarity and certainty sufficient reasonably to apprise the defendant with the offense charged gave the attorney general jurisdiction in the proceeding. State v. Jorda, 74 N.W.2d 95, 1955 N.D. LEXIS 163 (N.D. 1955).

5-02-10.1 Violations — Alcohol server training.

For a first violation taken against the retail licensee by a licensing authority for serving alcoholic beverages, the licensing authority shall accept as a mitigating factor the retail licensee provided to the licensee’s employees alcohol server training that addressed intoxication, drunk driving, and underage drinking, as approved by the licensing authority. Under this section, a mitigating factor must result in a lesser punishment than the retail licensee would have received if not for the mitigating factor.

History. S.L. 2015, ch. 77, § 2, eff August 1, 2015.

5-02-11. Suspension or revocation of license — Appeal.

If after such hearing the attorney general or local governing body finds the violation charged in the affidavit has been proved by the evidence, an order must be served on the licensee revoking or suspending the licensee’s license for a period of time. Such action may be appealed to the district court by following the appeal procedure set forth in chapter 28-32, except that the order revoking or suspending the license is inoperative while the appeal is pending.

Source:

S.L. 1967, ch. 80, § 24.

Notes to Decisions

Appeal Procedure.

Appeal from an order revoking retail liquor and beer licenses is governed by the procedures of the Administrative Agencies Practice Act, N.D.C.C. ch. 28-32. In re Retail Liquor License No. 15, 283 N.W.2d 170, 1979 N.D. LEXIS 286 (N.D. 1979).

DECISIONS UNDER PRIOR LAW

Appeal.

The right of appeal from an order of the attorney general suspending or revoking a license, the method of taking an appeal, the scope of the trial in the district court, the appeal to the supreme court and the scope of review in the supreme court all stemmed from the statute, which authorized the appeals to be taken and authorized the court to hear and determine them. In re Guon, 76 N.D. 589, 38 N.W.2d 280, 1949 N.D. LEXIS 80 (N.D. 1949); State v. Jorda, 74 N.W.2d 95, 1955 N.D. LEXIS 163 (N.D. 1955).

An appeal to the district court from an order of the attorney general revoking a liquor license had to be heard in the district court according to the procedure provided in chapter 28-32, without a jury, and solely on the record made on the attorney general’s hearing. State v. Jorda, 74 N.W.2d 95, 1955 N.D. LEXIS 163 (N.D. 1955).

Remand.

The district court could remand a case to the attorney general for further hearing if a satisfactory showing was made that the purported evidence was material and that there were reasonable grounds for the failure to adduce the evidence on the original hearing. State v. Jorda, 74 N.W.2d 95, 1955 N.D. LEXIS 163 (N.D. 1955).

Collateral References.

Right to hearing before revocation or suspension of liquor license, 35 A.L.R.2d 1067.

Drunkenness: revocation or suspension of liquor license because of drinking or drunkenness on part of licensee or his associates, 36 A.L.R.3d 1301.

Security interests in liquor licenses, 56 A.L.R.4th 1131.

5-02-12. Witnesses — Subpoena — Fees.

The attorney general or a member of the local governing body has the power to administer oaths and subpoena and examine witnesses. Any witness called by the prosecution, except a peace officer while on duty, shall receive the same fees and mileage as a witness in a civil case in district court.

Source:

S.L. 1967, ch. 80, § 25.

5-02-13. Removal of wine from restaurant.

If a full bottle of wine has been opened and the contents partially consumed, a retail alcoholic beverage licensee whose gross sales of food are at least thirty percent of the gross sales of alcoholic beverages consumed on the premises may permit an individual purchasing the bottle to remove the bottle when leaving the licensed premises if the licensee reseals the bottle with a seal that must be made conspicuously inoperative to reopen the bottle, and places a receipt of sale with the bottle. The removal of the bottle under these conditions is not an off sale of wine and is permitted without an additional license.

Source:

S.L. 2007, ch. 76, § 1; 2019, ch. 79, § 1, eff August 1, 2019.

CHAPTER 5-03 Beer and Liquor Wholesalers — Taxation

5-03-01. State wholesale license required — Qualifications — Penalty — Exception.

Before any person engages in the sale at wholesale of beer or liquor in this state, that person shall first procure a license from only the state tax commissioner. The license must only allow sale to licensed retailers, licensed wholesalers, regular retail outlets on federal military reservations, and sale for export from a federally bonded warehouse, or a foreign trade zone, to an export bonded warehouse. No license may be issued unless the applicant files a sworn application, accompanied by the required fee, showing the following qualifications:

  1. If the applicant is not a corporation, the applicant must be a citizen of the United States and a resident of this state and a person of good moral character. If the applicant is a corporation, the manager of the licensed premises must be a resident of this state, a citizen of the United States, and a person of good moral character, and the officers, directors, and stockholders must be citizens of the United States and persons of good moral character. Corporate applicants must first be properly registered with the secretary of state.
  2. The state tax commissioner may require the applicant to set forth other information necessary to enable the state tax commissioner to determine if a license should be granted.
  3. A person is not eligible for such a license unless that person has a warehouse and office in this state, in which is kept a complete set of records relative to that person’s alcoholic beverage transactions in this state.
  4. The applicant may not have any financial interest in any retail alcoholic beverage business.
  5. The provisions of this section relating to warehousing do not apply to a wholesaler of beer located in an adjoining state that permits wholesalers licensed in North Dakota to deliver beer to retailers without warehousing in that state.

A lender who acquires an inventory of beer or liquor by reason of a foreclosure of a security interest in the inventory is exempt from the requirement to obtain a license before the sale of the inventory. The lender shall offer the inventory for sale first to the wholesaler. A lender who forecloses upon a security interest in beer inventory for which the lender has a security interest shall dispose of the beer inventory within ninety days of obtaining possession of the inventory. Any person distributing alcoholic beverages in this state without compliance with this title is guilty of a class B misdemeanor.

Source:

S.L. 1967, ch. 80, § 26; 1975, ch. 106, § 38; 1985, ch. 110, § 1; 1987, ch. 101, § 1; 1991, ch. 75, § 6; 1993, ch. 1, § 27; 2001, ch. 84, § 5; 2007, ch. 71, § 7.

Cross-References.

Beverages must be licensed by state laboratories department, see § 19-08-04.

Notes to Decisions

Constitutionality of Liquor Regulations.

State regulations (N.D. Admin. Code, sections 84-02-01-05(5) and (7)) requiring all persons bringing liquor into the state to file monthly reports documenting the volume of liquor they have reported and requiring out-of-state distillers who sell liquor directly to a federal enclave to affix labels to each individual item, indicating that the liquor is for domestic consumption only within the federal enclave, fell within the core of the state’s power under the twenty-first Amendment, and were not violative of the supremacy clause; the provisions did not violate the intergovernmental immunity doctrine and were not preempted by act of Congress. North Dakota v. United States, 495 U.S. 423, 110 S. Ct. 1986, 109 L. Ed. 2d 420, 1990 U.S. LEXIS 2574 (U.S. 1990).

Law Reviews.

The Effects of North American Free Trade Agreement (NAFTA) upon North Dakota State Law, 70 N.D. L. Rev. 485 (1994).

5-03-01.1. Conviction not bar to licensure — Exceptions.

Conviction of an offense shall not disqualify a person from licensure under this chapter unless the state tax commissioner determines that the offense has a direct bearing upon a person’s ability to serve the public as a beer or liquor wholesaler, or that, following conviction of any offense, the person is not sufficiently rehabilitated under section 12.1-33-02.1.

Source:

S.L. 1977, ch. 130, § 2; 2001, ch. 84, § 6.

Cross-References.

Definition of offense, see § 12.1-01-04.

5-03-01.2. Brand registration — Penalty. [Repealed]

Repealed by S.L. 2005, ch. 73, § 5.

5-03-02. Fees.

The fee for an annual wholesale liquor license is one thousand dollars. The fee for an annual wholesale beer license is two hundred dollars. Fees must be reduced twenty-five percent for each full quarter of a year elapsed between the first day of the year for which the license is issued and the date on which the application for the license is filed with the state tax commissioner. When an application clearly indicates that the applicant does not desire to exercise the privileges granted by the license applied for until on or after the beginning of the quarterly period following the quarterly period in which the application is filed with the department, the fees must be reduced twenty-five percent for each full quarter of a year elapsing between the first day of the year for which the license is issued and the date indicated on the application. A license may not be issued for any period for a fee less than one-half of the annual license fee.

Source:

S.L. 1967, ch. 80, § 27; 1991, ch. 75, § 7; 2001, ch. 84, § 8.

5-03-03. Bond required. [Repealed]

Repealed by S.L. 1995, ch. 74, § 5.

5-03-04. Collection of taxes.

The taxes imposed by this chapter are payable as follows:

  1. Except as provided in subsection 3, wholesalers shall pay the tax to the state tax commissioner on or before the fifteenth day of each month.
  2. Liquor wholesalers shall make the payments based on the total gallonage sold the preceding calendar month. Beer wholesalers shall make the payments based on the total gallonage purchased from brewers the preceding calendar month. Microbrew pubs shall make payments based on the total gallonage sold onpremises during the preceding calendar month.
  3. Sales of alcoholic beverages for export through a federally bonded warehouse, or a foreign trade zone, to an export bonded warehouse are excluded from the computation of the gallonage tax. If the alcoholic beverages are returned to this state from the federally bonded warehouse, the foreign trade zone, or the export bonded warehouse, the exemption no longer applies.
  4. Upon satisfactory proof, a tax credit is allowed beer wholesalers for beer purchased, but which cannot be sold in this state. A tax credit is allowed wholesalers on bad accounts which are charged off for income tax purposes, but a pro rata tax is again payable on any accounts subsequently collected.
  5. If any wholesaler makes an overpayment of taxes due, the state tax commissioner shall issue a credit applicable to future obligations or certify that amount to the office of management and budget for a refund.
  6. Any remittance within one dollar of the correct amount due may be accepted by the state tax commissioner as the correct amount due.

Source:

S.L. 1967, ch. 80, § 29; 1969, ch. 95, § 1; 1987, ch. 101, § 2; 1995, ch. 74, § 4; 2001, ch. 84, § 9.

5-03-05. Tax commissioner to adopt rules — Appeal.

The tax commissioner, under chapter 28-32, shall adopt rules governing retailers, licensees, direct shippers, and manufacturers necessary to carry out the provisions of this title and to ensure efficient collection of beer and liquor taxes. All decisions of the tax commissioner are subject to court review.

Source:

S.L. 1967, ch. 80, § 30; 1991, ch. 75, § 8; 2001, ch. 84, § 10; 2001, ch. 86, § 4; 2015, ch. 432, § 1, eff July 1, 2015.

Notes to Decisions

Governmental Control of Liquor Traffic.

The liquor traffic is properly subject to governmental control and the retail liquor traffic has generally been deemed one peculiarly subject not only to state but to local regulation. Thielen v. Kostelecky, 69 N.D. 410, 287 N.W. 513, 1939 N.D. LEXIS 166 (N.D. 1939).

DECISIONS UNDER PRIOR LAW

Duties of Governing Body.

The Liquor Control Act did not evidence an intention that the governing body of a city should serve merely as a rubber stamp for the approval of applications for licenses but evidenced an intention to charge such governing body with duties which required the exercise of judgment and discretion. Thielen v. Kostelecky, 69 N.D. 410, 287 N.W. 513, 1939 N.D. LEXIS 166 (N.D. 1939); Smith v. City of LaMoure, 77 N.D. 658, 44 N.W.2d 789, 1950 N.D. LEXIS 161 (N.D. 1950).

Issuance of License.

A city council could provide for the issuance of a license for the retail sale of intoxicating liquor for a period of less than one year. Smith v. City of LaMoure, 77 N.D. 658, 44 N.W.2d 789, 1950 N.D. LEXIS 161 (N.D. 1950).

Sunday Observance Statute.

The statute relating to Sunday observance which, among others, prohibited sale on Sunday of intoxicating beverages, was not repealed by implication by the later measure authorizing the manufacture, sale, and distribution of beer, nor by the Liquor Control Act. State v. Young, 68 N.D. 300, 279 N.W. 251, 1938 N.D. LEXIS 112 (N.D. 1938).

Tax Exemption.

The exemption by the Sales Tax Act of the sale of alcoholic beverages specified in the Liquor Control Act did not follow those beverages after they had become ingredients of some other commodity (including the alcohol in a “mixed drink”), nor did such beverages impart exemption to the entire commodity of which they became ingredients. ISAKSON v. STATE, 70 N.D. 505, 296 N.W. 192, 1941 N.D. LEXIS 192 (N.D. 1941).

5-03-06. Examination by tax commissioner — Penalty for improper returns.

The state tax commissioner may at any reasonable time make an examination of the books and premises of any retailer, wholesaler, manufacturer, domestic winery, domestic distillery, microbrew pub, direct shipper, licensed alcohol carrier, licensed logistics shipper, or other person to determine if the person has fully complied with all statutes and rules pertaining to the person’s business. If any manufacturer, wholesaler, domestic winery, domestic distillery, microbrew pub, or direct shipper liable for any taxes imposed by this chapter fails to pay such tax on the date payment is due, there must be added to the tax a penalty of five percent of the total amount of the tax or five dollars, whichever is greater, plus interest of one percent of the tax per month or fraction of a month of delay, except the first month after the return or tax became due. Any manufacturer, wholesaler, domestic winery, domestic distillery, microbrew pub, direct shipper, licensed alcohol carrier, or licensed logistics shipper failing to furnish reports when required must be assessed a penalty of one hundred dollars for each day such reports are delinquent. The state tax commissioner may forgive all or part of any penalty for good cause shown. The tax commissioner shall give notice of the determination to the person liable for tax. If the determination of tax due relates to an incorrect or insufficient return filed by a taxpayer, notice of the determination must be given not later than three years after the last day on which the return was due or three years after the return was filed, whichever is later. If it is determined upon audit by the tax commissioner that the tax due was twenty-five percent or more above the amount reported on the return, notice of determination of tax due must be given not later than six years after the last day on which the return was due or six years after the return was filed, whichever is later. Notice of determination of tax due for any reporting period for which a taxpayer failed to file a return must be given not later than six years after the due date of the return, but if fraudulent information is given in a return or the failure to file a return is due to the fraudulent intent or willful attempt of the taxpayer in any manner to evade the tax, the time limitation provided in this section for giving notice of the determination of tax due does not apply. If any manufacturer, wholesaler, domestic winery, domestic distillery, microbrew pub, or direct shipper files a fraudulent return, there must be added to the tax an amount equal to the tax evaded or attempted to be evaded and such manufacturer, wholesaler, domestic winery, domestic distillery, microbrew pub, or direct shipper is also guilty of a class C felony. All such taxes and civil penalties may be collected by assessment or distraint, and no court of this state may enjoin the collection of any such tax or civil penalty. No wholesaler may purchase alcoholic beverages from a manufacturer after notice from the tax commissioner that such manufacturer has failed to file required reports with the tax commissioner’s office. Any manufacturer, wholesaler, domestic winery, domestic distillery, microbrew pub, direct shipper, licensed alcohol carrier, or licensed logistics shipper may have its license suspended or revoked for violation of any of the provisions of this title after a hearing conducted similar to that prescribed by this law.

Source:

S.L. 1967, ch. 80, § 31; 1975, ch. 106, § 39; 1991, ch. 75, § 9; 2001, ch. 84, § 11; 2005, ch. 73, § 3; 2009, ch. 89, § 2; 2011, ch. 72, § 3; 2013, ch. 74, § 3.

Cross-References.

Hearing on alleged violations, see § 5-02-10.

5-03-06.1. Hearing on alleged violations — Denial of license.

On licenses that are renewable annually, the state tax commissioner may not revoke or suspend a license or deny a renewal prior to conducting a hearing in accordance with chapter 28-32.

Source:

S.L. 1991, ch. 75, § 10; 2001, ch. 84, § 12.

5-03-07. Imposition of tax — Rate.

A tax is hereby imposed upon all alcoholic beverage wholesalers, domestic wineries, domestic distilleries, microbrew pubs, brewer taproom licensees, and direct shippers for the privilege of doing business in this state. The amount of this tax shall be determined by the gallonage according to the following schedule:

Beer in bulk containers — per wine gallon $ .08 (.021 per liter) Beer in bottles and cans — per wine gallon .16 (.042 per liter) Wine, including sparkling wine, containing less than 17% alcohol by volume — per wine gallon .50 (.132 per liter) Wine containing 17%-24% alcohol by volume — per wine gallon .60 (.159 per liter) Distilled spirits — per wine gallon 2.50 (.66 per liter) Alcohol — per wine gallon 4.05 (1.07 per liter)

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Source:

S.L. 1967, ch. 80, § 32; 1969, ch. 95, § 2; 1995, ch. 77, § 1; 2007, ch. 71, § 8; 2009, ch. 89, § 3; 2009, ch. 92, § 1; 2013, ch. 76, § 2.

5-03-08. Taxes and fees deposited in the general fund.

All moneys collected by the tax commissioner under this chapter must be transferred to the state treasurer, within ten days after the end of the month in which they were collected, and deposited in the state general fund.

Source:

S.L. 2001, ch. 84, § 13.

5-03-09. Supplier license required — Filing requirements — Penalty.

  1. Before a supplier may engage in the sale or shipment of alcoholic beverages to a licensed North Dakota wholesaler, that supplier must first procure a supplier license from the state tax commissioner.
  2. For any month in which a licensed supplier has made sales to a North Dakota wholesaler, that supplier shall file a report with the state tax commissioner no later than the last day of each calendar month covering alcoholic beverages sold or shipped to a North Dakota wholesaler during the preceding calendar month. When the last day of the calendar month falls on a Saturday, Sunday, or legal holiday, the due date is the first working day thereafter. The report must provide such detail and be in a format as prescribed by the state tax commissioner. The state tax commissioner may require that the report be submitted in an electronic format approved by the state tax commissioner.
  3. If a supplier fails to file the required report as required by this section, there is imposed a penalty of twenty-five dollars per month for each calendar month or fraction of a month during which the delinquency continues beginning with the month during which the report was due. Any assessed penalty may be waived by the tax commissioner for good cause upon request by the supplier.
  4. A supplier in violation of this section or who furnishes information required by this section that is false or misleading is guilty of a class A misdemeanor.
  5. In addition, whenever the holder of a supplier’s license fails to comply with any of the provisions of this title or any rules or regulations prescribed by the state tax commissioner and adopted under this title, the state tax commissioner, upon hearing after giving ten days’ notice of the time and place of the hearing to show cause why the holder’s license should not be revoked, may revoke the license. The state tax commissioner also shall have the power to restore licenses after such revocation. Whenever the holder of a license has had the license revoked for failure to comply with the provisions of this title or any rules and regulations prescribed by the state tax commissioner and adopted under this title, the state tax commissioner shall charge a fee of one hundred dollars for the reissuance of the license.

Source:

S.L. 2005, ch. 73, § 4; 2007, ch. 71, § 9; 2021, ch. 457, § 2, eff July 1, 2021.

CHAPTER 5-04 Beer Wholesaler and Brewer Relationships

5-04-01. Definitions.

As used in this chapter, unless the context otherwise requires:

  1. “Agreement” means one or more of the following:
    1. A commercial relationship between a licensed beer wholesaler and a licensed brewer of a definite or indefinite duration which is not required to be evidenced in writing.
    2. A relationship whereby the beer wholesaler is granted the right to offer and sell a brand or brands of beer offered by a brewer.
    3. A relationship whereby the beer wholesaler, as an independent business, constitutes a component of a brewer’s distribution system.
    4. A relationship whereby the beer wholesaler’s business is substantially associated with a brewer’s brand or brands, designating the brewer.
    5. A relationship whereby the beer wholesaler’s business is substantially reliant on a brewer for the continued supply of beer.
    6. A written or oral arrangement for a definite or indefinite period whereby a brewer grants a license to a beer wholesaler to use a brand, trade name, trademark, or service mark, and in which there is a community of interest in the marketing of goods or services at wholesale or retail.
  2. “Ancillary business” means a business owned by a wholesaler, a stockholder of a wholesaler, or a partner of a wholesaler, the primary business of which is directly related to the transporting, storing, or marketing of the brewer’s products with whom the wholesaler has an agreement.
  3. “Beer wholesaler” or “wholesaler” means any licensee, as outlined in section 5-03-01, importing or causing to be imported into this state or purchasing or causing to be purchased within this state, any beer for sale or resale to retailers or wholesalers licensed pursuant to chapter 5-02 or 5-03, without regard to whether the business of the person is conducted under the terms of an agreement with a licensed brewer.
  4. “Brand” means any word, name, group of letters, symbol, or combination thereof, that is adopted and used by a brewer or importer to identify a specific beer product, and to distinguish that beer product from another beer product.
  5. “Brand extension” is any brand that incorporates all or a substantial part of the unique features of a pre-existing brand of the same brewer or importer and which relies to a significant extent on the goodwill associated with that pre-existing brand.
  6. “Brewer” means every licensed brewer or importer of beer located within or without this state who enters into an agreement with any beer wholesaler licensed to do business in this state.
  7. “Person” means a natural person, corporation, limited liability company, partnership, trust, agency, or other entity as well as the individual officers, directors, or other persons in active control of the activities of each such entity. “Person” also includes heirs, assigns, personal representatives, conservators, and guardians.
  8. “Territory” or “sales territory” means the area of primary sales responsibility designated by any agreement between any beer wholesaler and brewer for the brand or brands of any brewer.

Source:

S.L. 1981, ch. 104, § 1; 1991, ch. 75, § 11; 1993, ch. 54, § 106; 1995, ch. 78, § 1; 1999, ch. 71, § 1.

5-04-02. Inducement or coercion prohibited.

No brewer may:

  1. Induce or coerce, or attempt to induce or coerce, any beer wholesaler to accept delivery of any alcoholic beverage or any other commodity which has not been ordered by the beer wholesaler.
  2. Induce or coerce, or attempt to induce or coerce, any beer wholesaler to enter any agreement or take any action that would violate any law or rule of this state by threatening to amend, cancel, terminate, or refuse to renew any agreement existing between a brewer and a beer wholesaler.
  3. Require a wholesaler to assent to any condition, stipulation, or provision limiting the wholesaler’s right to sell any other brewer’s product anywhere in this state, provided the sale of another brewer’s product does not materially impair the quality of service or quantity of sales of the existing brand or brands of the brewer seeking to impose the condition, stipulation, or provision.
  4. Require a wholesaler to submit specific, confidential information regarding competitive brands, as a condition of renewal or continuation of an agreement.
  5. Fail to provide each wholesaler of its brands with a written contract which conforms to this chapter and embodies the brewer’s agreement with each wholesaler.

Source:

S.L. 1981, ch. 104, § 2; 1999, ch. 71, § 2.

5-04-03. Dual distributorship prohibited.

No brewer who designates a sales territory for which a wholesaler shall be primarily responsible shall enter into an additional agreement with any other beer wholesaler for its brand or brands of beer in the same territory. No wholesaler may deliver beer to a retail account outside a sales territory designated by the brewer of a particular brand or brands.

Source:

S.L. 1981, ch. 104, § 3.

5-04-04. Agreement cancellation.

Notwithstanding the terms, provisions, or conditions of any agreement, no brewer may amend, cancel, terminate, or refuse to renew any agreement, or cause a wholesaler to resign from an agreement, unless good cause exists for amendment, termination, cancellation, nonrenewal, noncontinuation, or causing a resignation. “Good cause” does not include the sale or purchase of a brewer. “Good cause” includes, but is not limited to, the following:

  1. Revocation of the wholesaler’s license to do business in this state.
  2. The wholesaler’s bankruptcy or insolvency.
  3. Assignment for the benefit of creditors or similar disposition of the wholesaler’s assets.
  4. The wholesaler’s failure to comply, without reasonable excuse or justification, with any reasonable and material requirement imposed upon the wholesaler by the brewer.

In any dispute over an amendment, cancellation, termination, or nonrenewal, the brewer has the burden of proving the existence of good cause. If a wholesaler initiates a civil action, the brewer bears the burden of proving the existence of good cause after a prima facie showing by the wholesaler that good cause does not exist.

Source:

S.L. 1981, ch. 104, § 4; 1999, ch. 71, § 3.

5-04-05. Notice of intent to terminate.

Except as otherwise provided in this section, a brewer shall provide a wholesaler with at least ninety days prior written notice of any intent to amend, terminate, cancel, or not renew any agreement. The notice must state all the reasons for the intended amendment, termination, cancellation, or nonrenewal. The wholesaler has ninety days after receiving notice in which to rectify any claimed deficiency. If the deficiency is rectified within ninety days of notice, the proposed amendment, termination, cancellation, or nonrenewal is void. The notice provisions of this section do not apply if the reason for the termination, cancellation, or nonrenewal is:

  1. The wholesaler’s bankruptcy or insolvency.
  2. An assignment for the benefit of creditors or similar disposition of the business assets.
  3. Revocation of the wholesaler’s license.
  4. Conviction or a plea of guilty or no contest to a charge of violating a law relating to the business that materially affects the wholesaler’s ability to remain in business.

Source:

S.L. 1981, ch. 104, § 5.

5-04-06. Assignment, transfer, or sale of business.

No brewer may unreasonably withhold consent to any assignment, transfer, or sale of the wholesaler’s business whenever the wholesaler to be substituted meets the material and reasonable qualifications and standards required of the brewer’s wholesalers.

No brewer may unreasonably refuse, withhold, or unduly delay its approval of the issuance, sale, or transfer by a corporate beer wholesaler of its capital stock or any other corporate equity or debt security.

Source:

S.L. 1981, ch. 104, § 6.

5-04-07. Reasonable compensation for wrongful cancellation.

  1. Any brewer which amends, cancels, terminates, or refuses to renew any beer agreement, or causes a wholesaler to resign from an agreement, unless for “good cause” as defined by section 5-04-04, or which unreasonably withholds consent to any assignment, transfer, or sale of a wholesaler’s business, shall pay the wholesaler reasonable compensation for the value of the wholesaler’s business with relationship to the terminated brand or brands. The value of the wholesaler’s business includes, but is not limited to, the fair market value of the wholesaler’s business with respect to the terminated brand or brands, including the value of any ancillary business of the wholesaler and the goodwill of the business or ancillary business. The value of the wholesaler’s business may not exceed the wholesaler’s actual damages.
  2. If the brewer and the beer wholesaler are unable to mutually agree on reasonable compensation for the value of the wholesaler’s business, the matter must be submitted to a neutral arbitrator to be selected by the parties or, if they cannot agree, by the presiding district judge of the district in which the wholesaler’s main office is located. All arbitration costs shall be divided equally between the wholesaler and the brewer. The award of the neutral arbitrator shall be final and binding on the parties.

Source:

S.L. 1981, ch. 104, § 7; 1999, ch. 71, § 4.

5-04-08. Judicial remedies.

If a brewer engages in conduct prohibited under this chapter, a wholesaler, with whom the brewer has an agreement pursuant to this chapter, may maintain a suit against the brewer. The venue of any legal action taken under this section, or pursuant to a dispute arising out of an agreement or breach thereof, or over the provisions of an agreement, is a court, state or federal, located in North Dakota, or where the wholesaler maintains its principal place of business in this state. The court may grant equitable relief as is necessary to remedy the effects of conduct which it finds to exist and which is prohibited under this chapter, including, but not limited to, declaratory judgment and injunctive relief. The court may award actual damages and costs. If the court finds the brewer has acted in bad faith in invoking amendment, termination, cancellation, or nonrenewal under this chapter or has unreasonably withheld its consent to any assignment, transfer, or sale of the wholesaler’s agreement, the court may also award reasonable attorney’s fees.

Source:

S.L. 1981, ch. 104, § 8; 1999, ch. 71, § 5.

5-04-09. Product price.

No brewer, whether by means of a term or condition of an agreement or otherwise, may fix or maintain the price at which the wholesaler sells any alcoholic beverage.

Source:

S.L. 1981, ch. 104, § 9.

5-04-10. Retaliatory action prohibited.

A brewer may not take retaliatory action against a wholesaler who files or manifests an intention to file a complaint of alleged violation of state or federal law or regulation by the brewer with the appropriate state or federal regulatory authority. “Retaliatory action” includes, but is not limited to, refusal without good cause to continue the agreement, or a material reduction in the quality of service or quantity of products available to the wholesaler under the agreement.

Source:

S.L. 1981, ch. 104, § 10.

5-04-11. Wholesaler management.

No brewer may require or prohibit any change in management or personnel of any wholesaler unless the current or potential management or personnel fails to meet essential, reasonable, and nondiscriminatory requirements.

Source:

S.L. 1981, ch. 104, § 11.

5-04-12. Discrimination prohibited.

No brewer may discriminate among its North Dakota wholesalers in the price of beer sold to the North Dakota wholesalers or in price promotions. No wholesaler may refuse to sell to any licensed alcoholic beverage retailer in its sales territory. No wholesaler may discriminate among the licensed alcoholic beverage retailers in its sales territory in the price of beer sold to the retailers or in price promotions.

Source:

S.L. 1981, ch. 104, § 12.

5-04-13. Waiver prohibited.

No brewer may require any wholesaler to waive compliance with any provision of this chapter. Nothing in this chapter may be construed to limit or prohibit good-faith dispute settlements voluntarily entered into by the parties. However, no provision of any written agreement may require the law of any state other than North Dakota to govern the relationship of the parties.

Source:

S.L. 1981, ch. 104, § 13; 1999, ch. 71, § 6.

5-04-14. Sale of brewer.

Except for good cause, as defined by section 5-04-04, the purchase of a brewer as defined in section 5-04-01, when the purchaser continues in business as a brewer, shall obligate the new brewer to all terms and conditions of the agreement in effect on the date of purchase. “Purchase”, for the purposes of this chapter, includes the sale of stock, sale of assets, merger, lease, transfer, or consolidation.

Source:

S.L. 1981, ch. 104, § 14; 1991, ch. 75, § 12.

5-04-15. Application to agreements.

The provisions of this chapter cover agreements in existence on July 1, 1981, as well as agreements entered into after July 1, 1981.

Source:

S.L. 1981, ch. 104, § 15.

5-04-16. Right of free association.

No brewer or wholesaler may restrict or inhibit, directly or indirectly, the right of free association among brewers or wholesalers for any lawful purpose.

Source:

S.L. 1981, ch. 104, § 16.

5-04-17. Chapter to apply when in conflict with title 51.

The provisions of this chapter apply in any instances when the provisions of this chapter conflict with the unfair practice provisions of title 51.

Source:

S.L. 1981, ch. 104, § 17.

5-04-18. Same brands — Assignment of brand extensions.

Different categories of products manufactured and marketed under a common identifying trade name are the same brand. For example, “old faithful” includes “old faithful”, “old faithful light”, “old faithful draft”, “old faithful dry”, and other products identified principally by the old faithful name. Differences in packaging do not establish different brands. A brewer or importer may assign a brand extension only to the wholesaler with an exclusive sales territory to the brand that is the basis for the brand extension. This limitation does not apply to assignments of brand extensions to wholesalers which were made by a brewer or importer before August 1, 1995. If, before August 1, 1995, a brewer or importer assigned a brand extension to a wholesaler that is without exclusive sales territory to the brand that is the basis of the brand extension, any additional brand extension must be assigned to the wholesaler who first had the brand.

Source:

S.L. 1995, ch. 78, § 2.