K. Trade Libel and Commercial Disparagement

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

K. TRADE LIBEL AND COMMERCIAL DISPARAGEMENT

1. Introduction, Origin, and Development

South Carolina courts have yet to acknowledge "trade libel" or "commercial disparagement." However, a tort by any other name would smell as sweet. While states have disparate views of the tort referred to as "commercial disparagement," the majority position recognizes commercial disparagement as another name for the tort known as "injurious falsehood," as well as by a number of other terms.⁴⁷⁴ Case law as recent as 2015 asserts that South Carolina does not recognize the cause of action of injurious falsehood.⁴⁷⁵ However, courts have acknowledged that "[s]lander of title is grounded in the tort of injurious falsehood."⁴⁷⁶ Further, South Carolina courts have averred that "[t]he tort of slander of title is almost identical to the tort of product disparagement, the only difference being the former tort involves aspersing the quality of one's title to property and the latter tort involves aspersing the quality of one's property" and that "[s]lander of title is grounded in the tort of injurious falsehood, and the terms are often used interchangeably."⁴⁷⁷

2. Elements

In Huff v. Jennings, the court held that although it was directly addressing a claim for slander of title for the first time in South Carolina jurisprudence, South Carolina law, through its incorporation of the common law of England, recognizes a cause of action for slander of title.⁴⁷⁸ Further, the court of appeals adopted the elements of slander of title outlined in the Restatement (Second) of Torts.⁴⁷⁹ The term slander of title is defined as "a false and malicious statement, oral or written, made in disparagement of a person's title to real or personal property, causing him injury."⁴⁸⁰ Under South Carolina law, the elements for a cause of action for slander of title are:

(1) the publication of

(2) a false statement

(3) derogatory to plaintiff's title

(4) with malice

(5) causing special damages

(6) as a result of diminished value in the eyes of third parties.⁴⁸¹

⁴⁷⁶ Pond Place Partners, Inc. v. Poole, 351 S.C. 1, 19, 567 S.E.2d 881, 890 (Ct. App. 2002).

⁴⁷⁷ Eadon v. White, No. 2008-UP-043, 2008 WL 9832850, at *3 (S.C. Ct. App. Jan. 11, 2008).

⁴⁷⁸319 S.C. 142, 148, 459 S.E.2d 886, 890 (Ct. App. 1995).

⁴⁷⁹Id. at 891, 459 S.E.2d at 149.

⁴⁸⁰Eadon, 2008 WL 9832850, at *3.

"One who publishes a false statement harmful to the interests of another is subject to liability for pecuniary loss resulting to the other if he intends for publication of the statement to result in harm to interests of the other having a pecuniary value, or either recognizes or should recognize that it is likely to do so, and he knows that the statement is false or acts in reckless disregard of its truth or falsity."⁴⁸²

a. Publication. "Publication of an injurious falsehood is its communication intentionally or by a negligent act to someone other than the person whose interest is affected."⁴⁸³ In Huff v. Jennings, the court held that a former husband had standing to sue his ex-wife's attorney, the defendant, for slander of title where the property on which the attorney placed a lien for attorney's fees was owned by the husband and the wife at the time the lien was recorded, and the lien specifically stated it was placed against the property of both the husband and wife; "[w]hile it may be true that, had the lien been foreclosed and the property sold, the lien could have been satisfied only through the wife's interest in the property, the lien nonetheless attached to the property as whole and affected the value of the property as a whole."⁴⁸⁴ The court determined that a jury reasonably could conclude that the defendant published a false statement when she filed a lien she knew or should have known was invalid.⁴⁸⁵

b. False Statement. Captain obvious point, but the published statement must be false. Unlike certain other torts discussed in this book, it is not necessary that the statement be "published for the purpose of influencing the conduct of some third person or with knowledge that it is certain or substantially certain to do so."⁴⁸⁶ "The publisher must, however, know enough of the circumstances so that he should as a reasonable man recognize the likelihood that some third person will act in reliance upon his statement, or that it will otherwise cause harm to the pecuniary interests of the other because of the reliance."⁴⁸⁷

c....