SC Lawyer, September 2009, #2. BASICS SERIES Defamation in South Carolina: A Primer on Damages and Defenses.

• Author: By Thomas P. Gressette Jr. and J. Patrick Norris

South Carolina Lawyer

2009.

SC Lawyer, September 2009, #2.

BASICS SERIES Defamation in South Carolina: A Primer on Damages and Defenses

South Carolina LawyerSeptember 2009BASICS SERIESDefamation in South Carolina: A Primer on Damages and DefensesBy Thomas P. Gressette Jr. and J. Patrick Norris Because technology has made it simple for almost anyone to publish information to millions with a few taps on a computer keyboard, allegations of defamation are becoming more and more commonplace. To properly advise clients, South Carolina practitioners need a working understanding of the law of defamation. Understanding the South Carolina tort of defamation requires an understanding of how more than a century of precedent has refined a cause of action that is unique in its precarious balance of elements, available damages and defenses. This primer is designed to provide practitioners with a framework to analyze a defamation claim under South Carolina law by illustrating the interplay between the tort's elements, recoverable damages and defenses.

I. The Tort of Defamation

A defamatory statement is a spoken, written or otherwise communicated statement about another person that has a natural and direct tendency to harm that person's reputation. Capps v. Watts, 271 S.C. 276, 281, 246 S.E.2d 606, 609 (1978); Kendrick v. Citizens & S. Nat'l Bank, 266 S.C. 450, 454, 223 S.E.2d 866, 868 (1976). In order to prove defamation, a plaintiff in South Carolina 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." Fleming v. Rose, 350 S.C. 488, 494, 567 S.E.2d 857, 860 (2002). Failure to prove any one of these elements is fatal to a defamation claim. See, e.g., Williams v. Lancaster County Sch. Dist., 369 S.C. 293, 304, 631 S.E.2d 286, 292-93 (Ct. App. 2006) (defamation claim failed as a matter of law where the plaintiffs could not establish that the defamatory statement was actually published to a third party).

The law of defamation is premised upon the notion that one's reputation is invaluable; thus, defamation actions stem directly from injury or damage to one's reputation. Williams, 369 S.C. at 302-03, 631 S.E.2d at 291-92. At the outset of our discussion, it should be noted that defamation is not so much concerned with hurt feelings-although that type of damage can play a role in a defamation claim-but more with how the victim's reputation is affected in the community. Murray v. Holnam, Inc., 344 S.C. 129, 138, 542 S.E.2d 743, 748 (Ct. App. 2001). A statement that damages or harms a person's reputation is a statement that lowers the person in the estimation of the community or leads others to refrain from associating or dealing with him. Id. at 139, 542 S.E.2d at 748 (citing Fleming v. Rose, 338 S.C. 524, 526 S.E.2d 732 (Ct. App. 2000), rev'd on other grounds, 350 S.C. 488, 567 S.E.2d 857(2002)).

The general rule is that spoken defamation is known as "slander," while written or printed defamation is known as "libel." Parrish v. Allison, 376 S.C. 308, 320, 656 S.E.2d 382, 388 (Ct. App. 2007) (citing Holtzscheiter v. Thomson Newspapers, Inc., 332 S.C. 502, 508, 506 S.E.2d 497, 501 (1998)). Slander can include not only words actually spoken, but also insinuations from conduct. See Lynch v. Toys "R" Us-Del., Inc., 375 S.C. 604, 654 S.E.2d 541 (Ct. App. 2007) (holding a jury could reasonably conclude that the defendant's act of requiring the plaintiff, a shoplifting suspect, to be handcuffed while walking through the store at a busy time was defamatory). More than 100 years ago the Supreme Court of South Carolina noted that libel could take the form of pictures or effigies. Hubbard v. Furman Univ., 76 S.C. 510, 511, 57 S.E. 478, 478 (1907) (citation omitted). More recently, the Court of Appeals recognized a video as libelous. See, e.g., Wilhoit v. WCSC, Inc.,

293 S.C. 34, 358 S.E.2d 397 (Ct. App. 1987) (affirming defamation verdict against broadcasting company and reporter based on the airing of film which depicted the plaintiff, a witness in a criminal trial, covering her face, simultaneously with a story about the criminal defendant's sentencing).

If a defamatory meaning of a statement is obvious on the face of the statement, that statement is defamatory per se.

Parrish v. Allison, 376 S.C. 308, 320, 656 S.E.2d 382, 389 (Ct. App. 2007). As the Supreme Court of South Carolina has explained, "[a]n example of defamation per se is 'A is a thief.'" Holtzscheiter, 332 S.C. at 509, 506 S.E.2d at 501. On the other hand, if the defamatory meaning is not clear unless the hearer knows the facts or circumstances surrounding the statement (i.e., the defamatory meaning is not evident in the statement itself), then the statement is defamatory per quod. Id. In such a case, the plaintiff must produce facts outside of the statement to prove defamation. Id.

After determining whether the statement is defamatory per se or per quod, the next issue is whether the statement is actionable per se. The question of whether the statement is actionable per se is a question of law for the court. Id. at 510, 506 S.E.2d at 501. This designation is of great importance in the realm of damages. If the statement is actionable per se, the law presumes that the "defendant acted with common law malice and that the plaintiff suffered general damages." Id. If the statement is not actionable per se, the plaintiff does not get the benefit of the presumption and instead must prove and plead "common law actual malice and special damages." Id. at 510, 506 S.E.2d at 501-02.

Slander is only actionable per se if it charges the defendant with one of the following five 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." Murray, 344 S.C. at 142, 542 S.E.2d at 749; see also Smith v. Phoenix Furniture Co., 339 F. Supp. 969, 971 (D.S.C. 1972) (holding that a slander claim was not actionable per se where the plaintiff alleged that the defendants called him "a 'bastard' and a 'son-of-a-bitch'" because those statements did not fall within one of the aforementioned categories; thus, to withstand summary judgment, the plaintiff had to show that he sustained some sort of "'special' damage" as a result of the statements). In contrast to the narrow categories of slander that are actionable per se, "[e]ssentially, all libel is actionable per se." Holtzscheiter, 332 S.C. at 511, 506 S.E.2d at 502.

II. Damages Recoverable in Defamation Actions

General damages are available in defamation actions. Capps, 271 S.C. at 281, 246 S.E.2d at 609. General damages are "those which the law presumes must naturally, proximately, and necessarily result from the publication" of the defamatory statement. Whitaker v. Sherbrook Distrib. Co., 189 S.C. 243, 246, 200 S.E. 848, 849 (1939); see also Lily v. Belk's Dep't Store, 178 S.C. 278, 284, 182 S.E. 889, 891 (1935) ("'[G]eneral damages' are those which arise by inference of law and need not be proved by evidence "). "General damages include such things as injury to reputation, mental suffering, hurt feelings, and other similar types of injuries which are 'incapable of definite money valuation.'" Holtzscheiter, 338 S.C. at 510, 506 S.E.2d at 502 n.4 (1998) (quoting Whitaker, 189 S.C. at 246, 200 S.E. at 849).

Special damages are also available in some defamation actions. "Special damages are tangible losses or injury to the plaintiff's property, business, occupation or profession, which are capable of being assessed monetarily and which result from injury to the plaintiff's reputation." Goodwin v. Kennedy,347 S.C. 30, 45-46, 552 S.E.2d 319, 327(Ct. App. 2001) (citation omitted); see also Wardlaw v. Peck, 282 S. C. 199, 205-06, 318 S.E.2d 270, 275 (Ct. App. 1984) ("Where special damage is necessary to maintain an action, that special damage must consist of some provable material loss to the plaintiff as a result of the injury to his reputation."). Special damages must be proven even if the allegedly defamatory statement is actionable per se. Whitaker, 189 S.C. at 245, 200 S.E. at 849 (1939).

Punitive damages may be recoverable in certain defamation actions. "[I]n South Carolina, punitive damages are allowed in the interest of society in the nature of punishment and as a warning and example to deter the wrongdoer and others from committing like offenses in the future." Lynch, 375 S.C. at 625, 654 S.E.2d at 552(citing Laird v. Nationwide Ins. Co., 243 S.C. 388, 396, 134 S.E.2d 206, 210 (1964)). Punitive damages "serve as a vindication of private rights when it is proved that such have been wantonly, willfully or maliciously violated." Id. (citing Harris v. Burnside, 261 S.C. 190, 196, 199 S.E.2d 65, 68 (1973)).

Importantly, private and public plaintiffs seeking to recover punitive damages for defamation generally must demonstrate clear and convincing evidence of constitutional actual malice. Erickson v. Jones St. Publishers, LLC, 368 S.C. 444, 475, 629 S.E.2d 653, 670 (2006); Deloach v. Beaufort Gazette, 281 S.C. 474, 480, 316 S.E.2d 139, 143 (1984); see generally Jones v. Garner, 250 S.C. 479, 158 S.E.2d 909 (1968) (academic discussion of the two types of malice and examples of the types of cases to which each applies) and Murray, 344 S.C. at 142, 542 S.E.2d at 749 (Ct. App. 2001) (additional discussion and comparison of the two types of malice in defamation actions). That being said, there does appear to be a narrow exception for a private plaintiff seeking punitive damages if the defamatory statement is of purely private concern. See Dun & Bradstreet, Inc. v. Greenmoss Builders, Inc., 472 U.S. 749, 761 (1985) (holding that a construction contractor could recover punitive damages with a lesser showing than constitutional actual malice in a defamation action against a credit reporting agency which issued a false credit report to the contractor's creditors).

Defamation damages can also extend into the future in some cases. Abofreka v. Alston Tobacco Co., 288 S.C. 122, 126, 341 S.E.2d 622, 625 (1986) (citing Dixson v. Newsweek, Inc., 562 F.2d 626 (10th Cir. 1977)). Accordingly, it is proper in cases of permanent injury for the jury to be charged as to the mortality tables for purposes of calculating future damages. Id. (citations omitted).

If the plaintiff in a defamation action is a business, the damages recoverable are limited considerably. A business can only recover for pecuniary loss because a business cannot suffer humiliation and really has no personal reputation or "character in a personal sense" that can be harmed. Hosp. Care Corp. v. Comm. Cas. Ins. Co., 194 S.C. 370, 371, 9 S.E.2d 796, 797 (1940) (citations omitted).

When the damages recovered in a defamation action are less than $100, the plaintiff may not receive more than that amount in costs and/or fees. S.C. Code Ann. § 15-37-50 (2008).

Jury discretion regarding damages

In defamation cases, juries are given fairly broad discretion to award damages. 20 S.C. Jur. Libel and Slander§ 102 (2008). However, appellate courts often scrutinize defamation awards for excessiveness. For example, in Sanders v. Prince, 304 S.C. 236, 403 S.E.2d 640 (1991), the Supreme Court of South Carolina reversed a substantial award to the plaintiffs in a defamation action. The plaintiffs, members of a county school board, alleged that another member of the board had defamed them by stating at a news conference that the plaintiffs participated in "an apparent pattern of malfeasance, fraud, mismanagement [of district funds], illegal bid-solicitation practices, kickbacks, and bribery." Id. at 238, 403 S.E.2d at 642. The jury awarded the plaintiffs $1,250,000 in actual damages and $750,000 in punitive damages. The Supreme Court noted that although there was evidence of injury to the plaintiffs' reputations, there was also evidence that one of the plaintiffs was reelected to the board and was even elected secretary of the Sumter County Democratic Party. Id. at 239, 403 S.E.2d at 642. Accordingly, the Court reasoned that neither of the plaintiffs' reputations was "damaged to the extent that a multi-million dollar award of damages was warranted." Id. Thus, the "grossly excessive" award was reversed. Id.; see also Holtzscheiter, 332 S.C. 502, 506 S.E.2d 497 (new trial granted after the jury awarded the plaintiff-a private individual-$500,000 in actual damages and $1.5 million in punitive damages).

However, appellate courts in South Carolina do not always reverse defamation damage awards simply because they are large. In contrast to the decisions in Prince and Holtzscheiter, in Miller v. City of West Columbia, 322 S.C. 224, 471 S.E.2d 683 (1996), the Supreme Court of South Carolina upheld an award of $250,000 in actual damages and $500,000 in punitive damages for defamation where the defamatory statement effectively destroyed the plaintiff's reputation and ended his distinguished 25-year law enforcement career. In another case around the same period, Constant v. Spartanburg Steel Prods., Inc., 316 S.C. 86, 447 S.E.2d 194 (1994), the Supreme Court upheld a jury verdict of $400,000 in actual damages and $100,000 in punitive damages. See also Lynch 375 S.C. at 625, 654 S.E.2d at 552 (upholding an award of $25,000 in actual damages and $50,000 in punitive damages for slander); Wilhoit,293 S.C. 34, 358 S.E.2d 397upholding an award of $1 million in actual damages and $45,000 in punitive damages to the plaintiff, a witness at a criminal trial, who brought a defamation action against a broadcasting company and reporter based on the airing of film that depicted the witness plaintiff covering her face, simultaneously with a story about the criminal defendant's sentencing).

Mitigation of damages in defamation actions

Mitigation of damages is an important facet of defamation law. For example, the court might consider whether the defendant issued a retraction of the allegedly defamatory statement. Rogers v. Florence Printing Co., 233 S.C. 567, 106 S.E.2d 258 (1958). The court might also consider whether the plaintiff provoked the defamatory statement. McLeod v. Am. Publishing Co., 126 S.C. 363, 120 S.E. 70, 71 (1923). Furthermore, it can make a huge difference with regard to damages if the plaintiff's reputation was poor before the alleged defamation. After all, there may be a point where one's reputation is so tarnished that a defamatory statement simply cannot damage it further. See id. (noting that evidence of a defendant's bad reputation may be introduced in a defamation action) (citing Smith v. Lafar, 67 S.C. 491, 46 S.E. 332 (1903)); see also South Carolina Damages: Volume Two 8-11 (Terry E. Richardson, Jr. & Daniel S. Haltiwanger, eds., 2004).

III. Defenses to Defamation Claims

Truth

Truth is perhaps the most widely asserted defense to an allegation of defamation; it also appears to be the easiest defense to employ. After all, if the statement is true, the main element of the tort of defamation-a false statement-cannot be established. The defendant has the burden of pleading and proof with regard to the truth of the allegedly defamatory statement. See Parrish, 376 S.C. at 320, 656 S.E.2d at 388 (noting that truth is an affirmative defense in a defamation action as to which the defendant has the burden of pleading and proof); see also Parker v. Evening Post Pub. Co.,317 S.C. 236, 245, 452 S.E.2d 640, 645(Ct. App. 1994) (truth is an "absolute defense" to defamation).

In Cooper v. Lab. Corp. of Am. Holdings, Inc., 150 F.3d 376 (4th Cir. 1998), the defendant submitted a laboratory report to the plaintiff's employer stating that the plaintiff's urine had tested positive for alcohol. The plaintiff filed an action for defamation against the laboratory. The plaintiff contended that the "positive" result came from an "innocent" cause rather than consumption of alcohol, as she was on a medication that caused the test to detect the presence of alcohol. Id. at 381. The Fourth Circuit held that because the allegedly defamatory statement was actually true, the defendant did not defame the plaintiff under South Carolina law; whether the positive results of the urine test were a result of alcohol consumption or a result of the "innocent" consumption of medication, the results were nonetheless "true." Id.

There is an important caveat with regard to publishers of newspapers and magazines asserting the "truth" defense to an allegation of defamation: "A defendant or publisher asserting truth as a defense must prove that the statement or purported fact is true, not that the person quoted actually made the statement." Erickson,368 S.C. at 459, 629 S.E.2d at 661 n.2(2006) (citations omitted).

Qualified privileges

A defendant in a defamation action will often assert that the allegedly defamatory statement was protected by a conditional or "qualified" privilege. Lynch, 375 S.C. 604, 654 S.E.2d 541. "'Under this defense, one who publishes defamatory matter concerning another is not liable for the publication if (1) the matter is published upon an occasion that makes it conditionally privileged, and (2) the privilege is not abused.'" Boone v. Sunbelt Newspapers, Inc.,347 S.C. 571, 582, 556 S.E.2d 732, 738(Ct. App. 2001) (quoting Swinton Creek Nursery v. Edisto Farm Credit, 334 S.C. 469, 484, 514 S.E.2d 126, 134 (1999)). The Supreme Court of South Carolina has explained that

[i]n determining whether or not the communication was qualifiedly privileged, regard must be had to the occasion and to the relationship of the parties. When one has an interest in the subject matter of a communication, and the person (or persons) to whom it is made has a corresponding interest, every communication honestly made, in order to protect such common interest, is privileged by reason of the occasion. The statement, however, must be such as the occasion warrants, and must be made in good faith to protect the interests of the one who makes it and the persons to whom it is addressed.Swinton Creek,334 S.C. at 484-85, 514 S.E.2d at 134(quoting Bell v. Bank of Abbeville, 208 S.C. 490, 493-94, 38 S.E.2d 641, 643 (1946)).

For example, in the aforementioned case Cooper, 150 F.3d 376, the defendant laboratory was protected by a qualified privilege when it published the results of the urine test to the plaintiff's employer; the employer had hired the laboratory specifically for the purpose of conducting urine tests on the employer's workers and reporting the results. Id. at 381; see also Conwell v. Spur Oil Co., 240 S.C. 170, 125 S.E.2d 270 (1962) (intra-company communications were protected by qualified privilege); Cartwright v. Herald Pub. Co., 220 S.C. 492, 68 S.E.2d 415 (1951) (communications made in self-defense were protected by qualified privilege).

"Where the occasion gives rise to a qualified privilege, there is a prima facie presumption to rebut the inference of malice, and the burden is on the plaintiff to show actual malice or that the scope of the privilege has been exceeded." Swinton Creek, 334 S.C. at 484-85, 514 S.E.2d at 134 (citations omitted). Stated alternately, "[q]ualified privilege can be overcome if the plaintiff proves actual malice on the part of the publisher of the information in question." Cooper, 150 F.3d at 381 (citing Constant, 316 S.C. at 89, 447 S.E.2d at 196); see also Murray, 344 S.C. at 142, 542 S.E.2d at 750(citing Eubanks v. Smith, 292 S.C. 57, 354 S.E.2d 898 (1987)) (noting that "[a] qualified privilege does not prevent liability for defamation where the statement is made with actual malice").

"In general, the question whether an occasion gives rise to a qualified or conditional privilege is one of law for the court." Swinton Creek, 334 S.C. at 484-85, 514 S.E.2d at 134 (quoting Murray, 344 S.C. at 140, 542 S.E.2d at 749). However, the question ofwhetherthe qualified privilege was abused or exceeded goes to the jury. Id. (citing Murray, 344 S.C. at 140, 542 S.E.2d at 749).

Two specific defenses under the qualified privilege umbrella are the "fair report" privilege and the "wire service" privilege. The "fair report" privilege asserts that fair and impartial reports by the media of matters of public interest are qualifiedly privileged. Jones, 250 S.C. at 486, 158 S.E.2d at 913; see also White v. Wilkerson, 328 S.C. 179, 493 S.E.2d 345 (1997) (radio station was protected by the "fair report" privilege where it broadcast the city mayor's statements that attorneys had received $60,000 of a $65,000 settlement in clients' civil rights actions against city). The "wire service" privilege asserts that an article obtained from a reputable wire service and published by a media defendant is qualifiedly privileged; the publisher can thus be insulated from liability for defamation arising from its publication of that article. See Taub v. McClatchy Newspapers, Inc., 504 F. Supp. 2d 74 (D.S.C. 2007). This particular defense is somewhat narrow and can be tricky to apply. For example, in Taub, the court held that a newspaper that picked up an altered version of its original, allegedly defamatory article about a former mayor from a wire service and republished it on the newspaper's own Web site did not have a complete defense to the former mayor's defamation action under the "wire service" privilege. Because the article originated from the defendant newspaper itself, the newspaper had reason to be aware of the article's inaccuracies. Id. at 80.

Finally, although the fair report and wire service defenses can in some cases help media defendants, it is important to note that mistake of publication is not an effective defense to defamation. See Phillips v. Union Indem. Co., 28 F.2d 701 (4th Cir. 1928) (holding that it is no defense to show that a libelous statement was published by mistake).

Conclusion

In this modern era of Internet publication and the ability to reach millions from one's home computer, the importance of a working knowledge of the interplay of elements, available damages and defenses in a South Carolina defamation claim cannot be overstated. Likewise, the importance of ensuring that lawyers are equipped to analyze a claim for defamation cannot be overstated. Quite simply, as it becomes easier for individuals to publish information about others to a worldwide audience, questions of content and reputation will continue to arise more frequently as will disputes regarding the same. Lawyers will be sought to resolve these disputes, and a basic understanding of the law is the first step in providing the answers to the difficult questions inherent in defamation claims.

Thomas P. Gressette Jr. practices with Richardson, Patrick, Westbrook and Brickman, LLC in Mt. Pleasant, and J. Patrick Norris is a third-year law student at the Charleston School of Law.