D. Defamation

• Library: South Carolina Business Torts (SCBar) (2021 Ed.)

D. DEFAMATION

South Carolina has recognized a cause of action for libel since as early as 1803.¹³⁷ Since then, South Carolina has established a long-standing precedent for defamation claims. While at times the case law has assessed defamation claims with a fair amount of confusion and inconsistency, the elements encompassed within the cause of action have remained relatively stable.

1. Forms of Defamation

"[D]efamation is any statement about another person — either spoken, written, or communicated nonverbally — which has a natural and direct tendency to harm that person's reputation."¹³⁸ "Defamatory communications take two forms: libel and slander. Slander is a spoken defamation while libel is a written defamation or one accomplished by actions or conduct."¹³⁹

"Libel is defamation expressed either by writing or printing, or by signs, pictures, effigies, or the like."¹⁴⁰ It may also include "the publication of photographs or video."¹⁴¹

2. Elements

"In order to prove defamation, the complaining party must show: (1) a false and defamatory statement was made; (2) the unprivileged statement was published to a third party; (3) the publisher was at fault; and (4) either the statement was actionable irrespective of harm or the publication of the statement caused special harm."¹⁴²

a. A False and Defamatory Statement by the Defendant Concerning the Plaintiff

In order to succeed on a defamation claim, it is imperative that the statement at issue be both false and defamatory.¹⁴³ A true statement, by definition, cannot be defamatory and will not support a cause of action for defamation.¹⁴⁴ When determining whether a statement is defamatory, courts determine if it is "(1) either defamatory per se or defamatory per quod, and (2) actionable per se or not actionable per se."¹⁴⁵

Defamatory per se statements have a defamatory quality in and of themselves; defamatory per quod statements may (but do not necessarily) have a defamatory quality, depending on context.¹⁴⁶ "If the defamatory meaning is not clear unless the hearer knows the facts or circumstances not contained in the statement

itself, then the statement is defamatory per quod."¹⁴⁷ "Some statements are so clearly innocent or defamatory the court is justified in determining the question itself; yet, "'[i]f the question is one on which reasonable minds might differ, then it is for the jury to determine which of the two permissible views they will take.'"¹⁴⁸

In the South Carolina Supreme Court's view, for example, a doctor's reported statement about a murder victim — "there simply was no family support to encourage [the victim] to continue her education" — was "defamatory per quod" of the victim's mother; thus, the Supreme Court "entitled [the mother] to introduce extrinsic evidence to prove the phrase's defamatory meaning."¹⁴⁹ Likewise, "the words 'paranoid sonofabitch'" could, "when viewed in light of the extrinsic facts," be "libelous per quod."¹⁵⁰

b. An Unprivileged Publication by the Defendant to a Third Party

As "an injury to reputation," defamation requires "publication to a third party."¹⁵¹ "Publication is the communication of a statement by the defendant to someone other than the person defamed."¹⁵² A defamatory statement made only to the plaintiff "and no one else" does not satisfy the publication requirement.¹⁵³ However, a jury may find publication when "third persons [are] present and near enough at the time to hear the words spoken" — "even though such person should deny having heard them."¹⁵⁴

Somewhat counterintuitively, a defamatory statement can be nonverbal.¹⁵⁵ Physical behavior "communicat[ing] a defamatory charge of shoplifting," for example, may suffice.¹⁵⁶ In the business context, however, publication could be via letter,¹⁵⁷ memorandum, email, or the like.

c. Fault on the Defendant's Part in Publishing the Statement

At common law, a defendant's mental state "is immaterial to the basic question of liability for defamation."¹⁵⁸ Yet, many factual circumstances in the business context may render a defendant's mental state relevant — including disputes involving "a public official or public figure" or "a qualified privilege."¹⁵⁹

For example, in Swinton Creek Nursery v. Edisto Farm Credit, the South Carolina Supreme Court inquired into a defendant loan officer's mental state behind defamatory statements where he referenced another client's "financial duress" in a letter response to a third-party loan applicant.¹⁶⁰ Though "malice was presumed" because "the defamatory communication took the form of libel," the defendant sought "to establish that a privilege existed in order to rebut this presumption."¹⁶¹

d. Either Actionability Per Se or the Existence of Special Harm to the Plaintiff Caused by the Publication

As noted above, when determining whether a statement is defamatory, courts determine if it is "(1) either defamatory per se or defamatory per quod, and (2) actionable per se or not actionable per se."¹⁶²

Statements actionable per se are presumptively damaging and presumptively made with malice based on their content or form; statements not actionable per se are neither presumptively damaging nor presumptively made with malice.¹⁶³ "Whether [a] statement is actionable per se is a matter of law for the court to resolve."¹⁶⁴ "If the defamation is actionable per se, the law presumes the defendant acted with common law malice and that the plaintiff suffered general damages. If the defamation is not actionable per se, then the plaintiff must plead and prove common law actual malice and special damages."¹⁶⁵

Under South Carolina law, it appears that common law actual malice "means the publisher of the statement had knowledge the statement was false or acted with reckless disregard as to whether or not it was false."¹⁶⁶ And in the defamation context, "special damages are tangible losses or injury to the plaintiff's property, business, occupation or profession, capable of being assessed monetarily, which result from injury to the plaintiff's reputation."¹⁶⁷

"Essentially, all libel is actionable per se" by its nature.¹⁶⁸ "In contrariety, 'slander is actionable per se only if it charges the plaintiff with one of five types of acts or characteristics: (1) commission of a crime of moral turpitude; (2) contraction of a loathsome disease; (3) adultery; (4) unchastity; or (5) unfitness in one's business or profession.'"¹⁶⁹ "The reason for this distinction between oral and written defamation is that the latter is much more extensively and permanently injurious to character, and the deliberation necessary to prepare and circulate it evinces greater malice in the defamer."¹⁷⁰

Determining whether a defamatory statement is actionable per se is an important step in a defamation action; as detailed above, this determination affects both damages and the presumptions (if any) applicable to the defendant's fault. Generally, this step occurs after the court determines whether a defamatory statement is defamatory per se or per quod.¹⁷¹

Ultimately, "[i]f the plaintiff is not a public official or public figure, and if the common law does not require proof of actual malice, then the plaintiff may recover compensation for actual injury merely by proving that the defendant was negligent in publishing the defamatory statement."¹⁷² Conversely, actual malice must be established to show defamation by a public official in his official capacity. To prove actual malice, there must be sufficient evidence that the defendant made the statements in bad faith and without knowledge of falsity.¹⁷³

3. Damages

As noted, "[i]f the statement is actionable [per se], the law presumes that the 'defendant acted with common law malice and that the plaintiff suffered general damages.'"¹⁷⁴ Concerning general damages, South Carolina's Supreme Court has instructed as follows:

General damages include injury to reputation, mental suffering, hurt feelings, emotional distress, and similar types of injuries which are not capable of definite money valuation. Special damages are tangible losses or injuries to the plaintiff's property, business, occupation, or profession in which it is possible to identify a specific amount of money as damages.¹⁷⁵

"If a defamation is not actionable [per se], then at common law the plaintiff must plead and prove common law actual malice and special damages."¹⁷⁶ Special damage "must consist of some provable material loss to the plaintiff as a result of the injury to his reputation."¹⁷⁷ Special damages include a loss of income or material injury to plaintiff's property, business, profession or occupation which must be capable of being reduced to a monetary amount.¹⁷⁸ Therefore, special damages do not include hurt feelings, embarrassment, humiliation, or emotional distress.¹⁷⁹ Damages in one of these forms must be pleaded and proved to render a defamation claim actionable.¹⁸⁰

In order to recover punitive damages, the plaintiff must prove constitutional actual malice by clear and convincing evidence,¹⁸¹ with the possible exception of a private-figure plaintiff whose claim concerns a private matter.¹⁸²

The damages that a business can recover in a defamation action are limited.¹⁸³ A business can recover only pecuniary losses; a business cannot recover general damages because, although a business can experience commercial disparagement, a business cannot suffer humiliation and does not have a personal reputation that can be harmed.¹⁸⁴

4. Defenses to Defamation Claims

a. Truth

If a defendant asserts and proves that an alleged defamatory statement is, in fact, true, it will act as an absolute defense.¹⁸⁵ This is because if a statement is true, the first element of a defamation claim — that the statement is false — cannot be established. Thus, "it is immaterial that the statement is inspired by ill will, that it is published specifically to hurt the plaintiff, or even that the defendant believes that it is false; as long as it turns out to have been true at the time it was made...