S.E. 2d
THE STATE OF SOUTH CAROLINA
In The Supreme Court
Sandra Prosser
Holtzscheiter, Respondent,
v.
Thomson Newspapers,
Inc., d/b/a The Florence
Morning News, Appellant.
Appeal From Florence County
Ralph King Anderson, Jr., Judge
Opinion No.. 24842
Heard January 5, 1995 - Filed September 22, 1998
REVERSED AND REMANDED
E. N. Zeigler, of Zeigler and Graham, of Florence, for
appellant.
John S. DeBerry, of Florence, for respondent.
Jay Bender, of Baker, Barwick, Ravenel & Bender, of
Columbia, for South Carolina Press Association, as amicus
curiae.
FINNEY, C.J.: This is a libel case in which respondent, a
private individual, sued appellant, a newspaper, for publishing a statement
on a matter of public interest which allegedly defamed respondent. The
jury awarded respondent $500,000 actual damages and $l.5 million
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HOLTZSCHEITER v. THOMSON NEWSPAPERS, INC.
punitive damages. The trial judge remitted the punitive damage award to
$500,000. The newspaper appeals. We reverse the trial judge's refusal to
direct a verdict on punitive damages, and remand for a new trial absolute.
This is the second trial and appeal in this matter. See
Holtzscheiter v. Thomson Newspapers, Inc., 306 S.C. 297, 411 S.E.2d 664
(1991) (Holtzscheiter I). We have granted the newspaper's petition to
argue against the precedents of Holtzscheiter I and six other cases.1 We
took this unusual step because we are cognizant of the confusion
generated by Holtzscheiter I's majority and dissenting opinions, and of the
need to reconsider many of our defamation cases in light of changing
constitutional principles. While we do not overrule these cases outright,
we caution the bench and bar that this area of the law is constantly
evolving, and consequently all prior decisions must be read in the context
of the current state of the law.
FACTS
Respondent's seventeen year old daughter (Shannon) was
murdered. The morning after her body was found the newspaper ran a
story which, among other things, quoted Shannon's doctor as saying " . . .
there simply was no family support to encourage [Shannon] to continue
her education." Respondent alleges this phrase defamed her.
The doctor testified she told the newspaper's reporter that
Shannon lacked financial (not family) support to continue her education.
There was circumstantial evidence that the paper did not follow its
ordinary procedures in the filing and editing of this story in that the jury
could have found no one other than the reporter read the entire story pre-
publication. In addition, there was evidence that respondent had
encouraged Shannon, a high school drop-out, to pursue her G.E.D. in the
1 Capps v. Watts, 271 S.C. 276, 246 S.E.2d 606 (1978); Jones v.
Garner, 250 S.C. 479, 158 S.E.2d 909 (1968); Whitaker v. Sherbrook
Distributing Co., 189 S.C. 243, 200 S.E. 848 (1939); Merritt v. Great
Atlantic & Pacific Tea Co., 179 S.C. 974, 184 S.E. 145 (1936); Wilhoit v.
WCSC, Inc., 293 S.C. 34, 358 S.E.2d 397 (Ct. App. 1987); and Manley v.
Manley, 291 S.C. 325, 353 S.E.2d 312 (Ct. App. 1987).
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HOLTZSCHEITER v. THOMSON NEWSPAPERS, INC..
future.
COMMON LAW DEFAMATION
The tort of defamation allows a plaintiff to recover for injury to
her reputation as the result of the defendant's communication to others of
a false message about the plaintiff. Slander is a spoken defamation while
libel is a written defamation or one accomplished by actions or conduct.
See Wilhoit v. WCSC, Inc., 293 S.C. 34, 358 S.E.2d 397 (Ct. App. 1987)
(television broadcast of photo is libel). The statement at issue here is in
the form of libel.
The defamatory meaning of a message or statement may be
obvious on the face of the statement, in which case the statement is
defamatory per se. An example of defamation per se is "A is a thief." If
the defamatory meaning is not clear unless the hearer knows facts or
circumstances not contained in the statement itself, then the statement is
defamatory per quod. In cases involving defamation per quod, the plaintiff
must introduce facts extrinsic to the statement itself in order to prove a
defamatory meaning. An example of defamation per quod is "A had a
baby" where the extrinsic fact is that A is unmarried. See Capps v.
Watts, 271 S.C. 276, 246 S.E.2d 606 (1978).
Whether the majority in Holtzscheiter I held the phrase "There
was simply no family support to encourage [Shannon] to continue her
education" was defamatory per quod or defamatory per se is unclear.
Citing Nettles v. MacMillan Petroleum Corp., 210 S.C. 200, 42 S.E.2d 57
(1947), the majority held that because the words used were ambiguous,
respondent could introduce evidence of how the phrase was understood.
The passage from Nettles that precedes this holding is a discussion of
defamation per quod which addresses the admissibility of extrinsic facts
and of evidence of how the words were understood. It would therefore
appear Holtzscheiter I's majority held this case involved defamation per
quod. The holding, however, is obscured by footnote 5, which asserts the
evidence is not "necessary to supply a defamatory meaning, but would
merely explain whether readers, in fact, interpreted the article to convey a
libelous meaning on its face." The Holtzscheiter I dissent understood the
majority to hold that the statement was defamatory per se, not per quod,
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HOLTZSCHEITER v. THOMSON NEWSPAPERS, INC.
and criticized this holding. Commentators also appear confused about
Holtzscheiter I's holding on this issue. Compare Hubbard and Felix The
South Carolina Law of Torts 157 (Supp. 1993) (interpreting Holtzscheiter I
to hold the "statement . . . could be read as defamatory without resort to
extrinsic facts . . . i.e., defamatory per se") with 20 S.C. Juris. Libel and
Slander § 3, p. 104, fn. 15 (1993) (interpreting Holtzscheiter I to hold the
statement was defamatory per quod . We now clarify Holtzscheiter
I: the statement is defamatory per quod. Hence, extrinsic evidence is
necessary to prove the defamatory meaning.
Much confusion arises from defamation law's use of the term
"per se" in two different senses. As noted above, there is the question
whether the statement is defamatory per se or per quod. A separate
issue is whether the statement is "actionable per se" or not.2 This issue
is one of pleading and proof, and is always a question of law for the court.
If a defamation is actionable per se, then under common law principles the
law presumes the defendant acted with common law malice3 and that the
plaintiff suffered general damages. 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.4 Capps v. Watts, supra; Lily v. Belk's
2 We strongly discourage use of the term actionable per quod and
instead suggest the issue be posed as "actionable per se" or "not actionable
per se."
3 When a publication is actionable per se there arises a common law
presumption of implied malice, sometimes called "malice in law", "legal
malice" or "presumed malice" which substitutes for common law actual
malice. If the defamation is not actionable per se, then the plaintiff must
plead and prove common law actual malice, that is "the defendant was
activated by ill will in what he did, with the design to causelessly and
wantonly injure the plaintiff; or that the statements were published with
such recklessness as to show a conscious indifference toward plaintiff s
reports." Jones v. Garner, supra.
4General 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." Whitaker v. Sherbrook
Distributing Co., supra. On the other hand, special damages are tangible
losses or injury to the plaintiffs property, business, occupation or
profession, capable of being assessed monetarily, which result from injury
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HOLTZSCHEITER v. THOMSON NEWSPAPERS, INC.
Dep't Store, 178 S.C. 278, 182 S.E. 889 (1935).
Further, in assessing the question of actionable per se or not,
an important distinction is drawn between defamation in the form of libel
and that in the form of slander. Libel is actionable per se if it involves
"written or printed words which tend to degrade a person, that is, to
reduce his character or reputation in the estimation of his friends or
acquaintances, or the public, or to disgrace him, or to render him odious,
contemptible, or ridiculous . . . ." Lesesne v. Willingham, 83 F. Supp. 918,
921 (E.D.S.C. 1949). In other words, if the trial judge can legally
presume, because of the nature of the statement, that the plaintiff s
reputation was hurt as a consequence of its publication, then the libel is
actionable per se. Capps v. Watts, supra. Essentially, all libel is
actionable per se. The statement at issue here is in the form of libel and,
accordingly, Holtzscheiter I held it was actionable per se,5 that is, without
pleading or proof of special damages.6
In contrast to libel, 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. Lesesne, supra, Galloway v. Cox, 172 S.C. 101, 172 S.E. 761
(1934). While some states limit actionable per se libel to the same
categories of slander which are actionable per se, this is not the law in
South Carolina. See, e.g., Hubbard and Felix The South Carolina Law of
Torts 402 (1990). To the extent Holtzscheiter I may be read to impose
this limitation on actionable per se libel, it is overruled.
to the plaintiff s reputation. Capps v. Watts, supra; Wardlaw v. Peck, 282
S.C. 199, 318 S.E.2d 270 (Ct. App. 1984).
5 The majority labeled the statement "libel per se" rather than
"actionable per se" in determining this issue. This language has led to
confusion, especially since it is preceded by a passage from Prosser on
Torts (also cited in Capps v. Watts, supra) discussing a limitation on the
actionability per se of libel which is not the law in South Carolina. See,
e.g.., Lesesne v. Willingham, 83 F.Supp. 918 (E.D.S.C. 1949).
6We note that in Holtzscheiter I the Court was not presented with any
issue concerning the presumption of common law actual malice.
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HOLTZSCHEITER v. THOMSON NEWSPAPERS, INC.
Under common law principles, it is presumed respondent
suffered general damages and that the newspaper acted with common law
actual malice because this case involves libel, which is actionable per se.
Further, since the law of the case under Holtzscheiter I is that the phrase
is defamatory per quod, the respondent is entitled to introduce extrinsic
evidence to prove the phrase's defamatory meaning.
CONSTITUTIONAL ISSUES
This case involves a claim for general and punitive damages by
a private plaintiff against a media defendant in a matter of public
interest.7 Accordingly, the case has constitutional implications and issues.
We note that constitutional issues were neither raised nor ruled on at the
trial level in Holtzscheiter I because the newspaper prevailed at the
directed verdict stage on common law issues alone. Despite the fact
constitutional issues were not before the Court in the first appeal, the
dissent engaged in a discussion of them. The unfortunate consequence of'
this discussion was confusion at the second trial whether the majority's
silence on the constitutional issues was an implicit rejection of the
dissent's view, and therefore whether certain constitutional issues were
foreclosed at the second trial on law of the case grounds, having been
implicitly litigated in Holtzscheiter I. As we view the record in this
second trial, the parties and trial judge felt they were bound by the law of
the case, and thus certain constitutional issues were not fully litigated.
This erroneous, though understandable, confusion permeated the second
trial. We therefore take this opportunity to discuss the constitutional
questions implicated by this case.
At common law, defamation was a "strict liability" tort, but
where the constitution is involved, the common law rules are altered. For
example, since respondent relied on the newspaper's negligence here to
establish liability, the constitution requires she prove "actual injury": She
7The parties characterize the case this way, and we accept their view.
Contra Holtzscheiter I, Toal, A.J., dissenting (finding this a matter of
private concern).
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HOLTZSCHEITER v. THOMSON NEWSPAPERS, INC.
may not rely on the common law presumption of general damages8 arising
from a defamation actionable per se. Gertz v. Robert Welch, Inc., 418 U.S.
323, 94 S.Ct. 2997, 41 L.Ed.2d 789 (1974). In addition, respondent may
not constitutionally rely on the common law presumption that the
statement was false. Philadelphia Newspapers, Inc. v. Hepps, 475 U.S.
7671 106 S.Ct. 1558, 89 L.Ed.2d 783 (1986); Parker v. Evening Post, 317
S.C. 236, 452 S.E.2d 640 (Ct. App. 1994). Finally, in order to recover
punitive damages from the newspaper, respondent must prove by clear and
convincing evidence that the paper acted with constitutional actual malice,
that is, that the paper either realized the statement was false or had
serious reservations about its truth.9 Gertz. supra. DeLoach v. Beaufort
Gazette, 281 S.C. 474, 316 S.E.2d 139 (1984).
With these considerations in mind, we turn to the issues in
this appeal.
ISSUES
A. Directed Verdict on Liability
The newspaper asserts it was entitled to a directed verdict on
8See footnote 4, supra, for a discussion of the difference between
common law general damages and special damages. Where a plaintiff in a
constitutional defamation case relies on conduct less then constitutional
malice, she may not rely on presumed damages but must demonstrate
"actual injury". Gertz v. Robert Welch, Inc., 418 U.S. 323, 94 S.Ct. 2997,
41 L.Ed.2d 789 (1974). Actual injury means not only out-of-pocket losses,
but includes injury to reputation, mental suffering and anguish, and
personal humiliation. Gertz, supra.
9While common law malice involves a malicious intent or recklessness
on the part of the publisher, constitutional malice requires actual
knowledge of the publication's falsity or serious reservations about its
truthfulness. See Gertz, supra. The presumption of common law actual
malice cannot substitute for the requirement of proof of constitutional
actual malice in a case where the First Amendment is involved. See, e.g.,
Sanders v. Prince, 304 S.C. 236, 403 S.E.2d 640 (1991).
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HOLTZSCHEITER v. THOMSON NEWSPAPERS, INC.
liability for several different reasons. We disagree.
A directed verdict on liability is properly denied where there is
any evidence, direct or circumstantial, justifying submission of the issue to
the jury. Washington v. Whitaker, 317 S.C. 108, 451 S.E.2d 894 (1994).
The newspaper contends it was entitled to a directed verdict
because the allegedly libelous statement was a constitutionally protected
expression of fact or opinion,10 or because it was a fair comment on a
matter of public interest. See Oswalt v. State-Record Co., 250 S.C. 429,
158 S.E.2d 204 (1967). Neither of these issues were raised below, and
may not properly be raised now on appeal. Beaufort County v. Butler, 316
S.C. 465, 451 S.E.2d 386 (1994). The paper next contends it was entitled
to a directed verdict because respondent failed to meet her burden of
proving the statement false, Hepps, supra, and because the published
statement was substantially true. See, e.g., Dauterman v. State-Record
Co., 249 S.C. 512, 154 S.E.2d 919 (1967). Neither issue was raised below
and accordingly is not preserved for our review. Butler, supra. We note
that at this second trial, in fact, the paper expressly waived reliance on
substantial truth, apparently believing the issue foreclosed by the decision
in the first appeal. While the dissent discussed that issue, it was not
properly before the Court in that appeal, and therefore, like the other
constitutional issues, may be litigated in any subsequent proceeding.
Similarly, the paper argues it was entitled to a directed verdict
because respondent failed to produce any evidence of damage to her
reputation. The trial court relied on the common law presumption of
general damages, and the newspaper failed to raise a constitutional
challenge to this presumption.11 Accordingly, it has not demonstrated
reversible error in the trial court's denial of the directed verdict motion on
this ground. Washington v. Whitaker. supra, (constitutional issues may
not first be raised on appeal); Butler, supra.
10But see Milkovich v. Lorain Journal Co., 497 U.S. 1, 110 S.Ct. 2695,
111 L.Ed.2d 1 (1990)(no separate constitutional protection for opinion).
11Therefore we do not reach the question whether respondent presented
sufficient evidence of "actual" damages within the meaning of Gertz to
withstand the directed verdict motion.
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HOLTZSCHEITER v. THOMSON NEWSPAPERS, INC.
The newspaper also asserts it was entitled to a directed verdict
because respondent, Shannon's mother, failed to prove the statement that
Shannon lacked family support was "of and about her." Kendricks v.
Citizens & Southern Nat'l Bank, 266 S.C. 450, 223 S.E.2d 866 (1976).
While the general rule is that defamation of a group does not allow an
individual member of that group to maintain an action, this rule is not
applicable to a small group. 50 Am. Jur. 2d, Libel and Slander § 349
(1995); Hospital Care Corp. v. Commercial Casualty Ins. Co., 194 S.C. 370,
9 S.E.2d 796 (1940)(defamation of a class not actionable by member unless
statement has special and personal application to plaintiff). We hold there
was evidence from which a jury could have found the statement was "of
and about" respondent and thus the directed verdict motion was properly
denied. Washington v. Whitaker, supra; Hospital Care, supra.
Finally, the newspaper argues the absence of evidence that it
acted negligently in reporting the statement entitles it to a directed
verdict. We find some indirect evidence in the record that the newspaper
failed to follow its professional standards in this matter. By comparing
the inconsistencies in times and sequences of events related by the paper's
own witnesses, the jury could have found professional standards were
breached in that no one other than the reporter actually read the story
before it was published. This was some evidence of negligence, sufficient
to deny the newspaper's directed verdict motion. See Jones v. Sun
Publishing Co., 278 S.C. 12, 292 S.E.2d 23 (1982)(private plaintiff need
show only some measure of legal fault by publisher to withstand directed
verdict motion).
We find no reversible error on this record in the trial judge's
denial of the newspaper's directed verdict motion on liability.
B. Punitive Damages
The newspaper contends the trial judge erred in denying its
directed verdict motion on the issue of punitive damages. We agree.
In order to withstand the directed verdict motion on the issue
of punitive damages, respondent had to present clear and convincing
evidence that the newspaper acted with constitutional actual malice.
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HOLTZSCHEITER v. THOMSON NEWSPAPERS, INC.
Gertz, supra; DeLoach, supra. We are required to review the evidence of
constitutional actual malice de novo pursuant to the United States
Supreme Court's decision in Bose Corp. v. Consumers Union of United
States, Inc., 466 U.S. 485, 104 S.Ct. 1949, 80 L.Ed.2d 502 (1984); Miller v.
City of West Columbia, 322 S.C. 224, 471 S.E.2d 683 (1996). We find
absolutely no evidence the newspaper either knew the statement was false
or had serious reservations about its truthfulness when the article was
prepared and published. Accordingly, the directed verdict motion should
have been granted. Gertz, supra; DeLoach, supra.
The paper also contends that the punitive damage award was
so excessive as to indicate passion, prejudice or caprice on the part of the
jury. It therefore argues that the remedy for the punitive damage error
must be a new trial absolute. See Sanders v. Prince, 304 S.C. 236, 403
S.E.2d 640 (1991). We agree that the proper relief in this case is a new
trial absolute, not simply because the issue of punitive damages should
never have been submitted to the jury, nor solely because of the size of'
the award, but also because the parties were denied a fair trial as the
result of the confusion generated by our decision in Holtzscheiter I.
Accordingly, the judgment below is
REVERSED AND REMANDED.
C. Tolbert Goolsby, Jr., A.A.J., concurs. TOAL, A.J.,
concurring in result in a separate opinion. A. Lee Chandler,
A.A.J., and MOORE, A.J. dissenting in part in a separate opinion.
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TOAL, A.J.: In his majority opinion, the Chief Justice holds that this
case should be reversed and remanded with a verdict directed for defendant
as to punitive damages and a new trial absolute conducted as to actual
damages. I fully concur in this result. Moreover, I believe that there is
much merit to the analysis set forth in the majority opinion. It recognizes
the error, or at least, the hopeless confusion of Holtzscheiter I and attempts
to correct it. Further, the opinion attempts to clarify the issues surrounding
actionability. Additionally, the opinion takes account of the constitutional
issues implicated by defamation actions. In these respects, the majority
moves to modernize this state's defamation law. I very much agree with this
direction; however, I write separately because I do not believe the majority
opinion goes far enough. Because a coherent, consistent, and constitutional
approach is lacking in South Carolina defamation law, I would advocate, and
propose here, the adoption of a new theoretical framework for analyzing
defamation issues.
INTRODUCTION
It has been written that "there is a great deal of the law of defamation
which makes no sense."1c This statement is particularly applicable to certain
areas of South Carolina defamation law, which are mind-numbingly
incoherent. Case law in this state presents no clear analytical system for
resolving defamation questions. Because a clear framework is lacking, the
resolution of disputes often turns on chance, on whatever aspect of
defamation law happens to arrest the parties' or court's attention in that
case. As a result, the law lacks consistency and predictability, and confounds
the bench, the bar, members of the general public, and media personnel who
have to make important decisions based on court precedent.
The confusion in South Carolina defamation law has been compounded
by the fact that this Court's opinions have not completely taken into
consideration the impact of decisions by the United States Supreme Court.
Since the 1960's, the Supreme Court has attempted "to define the proper
accommodation between the law of defamation and the freedoms of speech
and press protected by the First Amendment." Gertz v. Welch, 418 U.S. 323,
325, 94 S. Ct. 2997, 3000, 41 L. Ed. 2d 789, 797 (1974). The effect of these
decisions has been the interweaving of federal constitutional principles into
the fabric of state defamation law. Because state defamation rules have
become inextricably tied to these constitutional principles, it is not possible
1c W. Page Keeton et al., Prosser & Keeton on the Law of Torts § 111, at
771 (5th ed. 1984).
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HOLTZSCHEITER v. THOMSON NEWSPAPERS, INC.
to review defamation issues in a state law vacuum.
Given the uncertainty existing in South Carolina defamation law, due
to the lack of an analytical model and the failure to generally take account
of the Supreme Court's recent opinions, this case presents an opportune
moment for this Court to look afresh at how defamation questions should be
resolved.
LAW/ANALYSIS
Defamation law embodies the public policy that individuals should be
free to enjoy their reputations unimpaired by false and defamatory attacks.
Thus, the focus of defamation is not on the hurt to the defamed party's
feelings, but on the injury to his reputation. See Wardlaw v. Peck, 282 S.C.
199, 318 S.E.2d 270 (Ct. App. 1984). Defamatory communications take two
forms: libel and slander. Libel consists of the publication of defamatory
material by written or printed words, by its embodiment in physical form or
by any other form of communication that has the potentially harmful
qualities characteristic of written or printed words. Restatement (Second) of
Torts § 56S (1977)("Restatement"). Slander, on the other hand, consists of
the publication of defamatory matter by spoken words, transitory gestures or
by any form of communication other than those defined as part of libel. See
id.
A. ELEMENTS OF DEFAMATION
The elements of defamation include: (1) a false and defamatory
statement concerning another; (2) an unprivileged publication to a third
party; (3) fault on the part of the publisher; and (4) either actionability of the
statement irrespective of special harm or the existence of special harm caused
by the publication. See Restatement § 558.
1. FALSE AND DEFAMATORY STATEMENT CONCERNING ANOTHER
A communication is defamatory if it tends to harm the reputation of
another as to lower him in the estimation of the community or to deter third
persons from associating or dealing with him.2c Restatement § 559.
2c "In determining the defamatory character of language, the meaning of
which is clear or otherwise determined, the social station of the parties in the
community, the current standards of moral and social conduct prevalent
therein, and the business, profession or calling of the parties are important
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HOLTZSCHEITER v. THOMSON NEWSPAPERS, INC.
The defamatory statement must also be false. Under the common law,
a defamatory communication was presumed to be false. See Beckham v. Sun
News, 289 S.C. 28, 344 S.E.2d 603, cert. denied, 479 U.S. 1007 (1986).
However, truth could be asserted as an affirmative defense. See Ross v.
Columbia Newspapers, Inc., 266 S.C. 75, 221 S.E.2d 770 (1986). The
Supreme Court's holding in Philadelphia Newspapers, Inc. v. Hepps, 475 U.S.
767, 768-69, 106 S. Ct. 1558, 1559, 89 L. Ed. 2d 783, 787 (1986) has modified
the common law rule: "[A]t least where a newspaper publishes speech of
public concern,3c a private-figure plaintiff cannot recover damages without also
factors. Thus an imputation may be defamatory as applied to one person at
a given time and place, although it would not be derogatory of another
person at a different time or in a different place." Restatement § 614 cmt.
d.
3c The Supreme Court wrote in Dun & Bradstreet, Inc. v. Greenmoss
Builders, Inc., "We have long recognized that not all speech is of equal First
Amendment importance. It is speech on matters of public concern that is at
the heart of the First Amendment's protection." 472 U.S. 749, 758-59, 105
S. Ct. 2939, 2944-45, 86 L. Ed. 2d 593, 602 (1985)(internal citations omitted).
It then quoted Connick v. Myers, 461 U.S. 138, 145, 103 S. Ct. 1684, 1689,
75 L. Ed. 2d 708, 718-19 (1983):
The First Amendment was fashioned to assure unfettered
interchange of ideas for the bringing about of political and
social changes desired by the people. [S]peech concerning
public affairs is more than self-expression; it is the essence
of self-government. Accordingly, the Court has frequently
reaffirmed that speech on public issues occupies the highest
rung of the hierarchy of First Amendment values, and is
entitled to special protection.
Dun & Bradstreet, Inc., 472 U.S. at 759, 105 S. Ct. at 2945, 86 L. Ed. 2d at
602-03 (citations and quotations omitted).
In determining whether the petitioner's credit report, which it had sent
to five subscribers, involved a matter of public concern, the Court referred to
factors outlined in Connick, 461 U.S. at 147-48, 103 S. Ct. at 1690, 75 L. Ed.
2d at 720: "Whether ... speech addresses a matter of public concern must
be determined by the content, form, and context of a given statement, as
revealed by the whole record." It found that the credit report did not involve
a matter of public concern.
This was in contrast to the situation in Gertz, which the Court
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HOLTZSCHEITER v. THOMSON NEWSPAPERS, INC.
showing that the statements at issue are false." Whether a communication
is reasonably capable of conveying a defamatory meaning is a question of law
for the trial court to determine, 51 Am. Jur. 2d Libel & Slander § 119
(1995).
characterized as involving "a matter of undoubted public concern." Dun &
Bradstreet, 472 U.S. at 756, 105 S. Ct. at 2943, 86 L. Ed. 2d at 600. Gertz
was an attorney representing a family in a civil action against a Chicago
policeman who had been convicted of killing a member of the family. A
monthly magazine, American Opinion, published an article portraying Gertz
as the architect of the "frame-up" of the policeman, whose prosecution was
part of a Communist campaign against the police. It described Gertz as a
"Leninist," a "Communist-fronter," and an official of the "Marxist League for
Industrial Democracy, originally known as the Intercollegiate Socialist
Society, which has advocated the violent seizure of our government." Gertz,
418 U.S. at 326, 94 S. Ct. at 3000, 41 L. Ed. 2d at 797.
Hepps involved statements made by The Philadelphia Inquirer about
the principal stockholder of a corporation, the corporation itself, and a
number of franchisees. The Philadelphia Inquirer published a series of
articles whose theme was that the stockholder, corporation, and franchisees
had links to organized crime and had used some of these links to influence
the state's governmental processes. The Supreme Court found that the
plaintiff was a private figure, and the newspaper articles were of public
concern. Hepps, 475 U.S. at 776, 106 S. Ct. at 1563, 89 L. Ed. 2d at 792.
Therefore, the plaintiff bore the burden of proving falsity, as well as fault,
before recovering damages against a media defendant for speech of public
concern. Id. The Court reserved the question of what standards would apply
if the plaintiff sued a non-media defendant. Id. at 779 n.4, 106 S. Ct. at
1565 n.4, 89 L. Ed. 2d at 794 n.4.
In Milkovich v. Lorain Journal Company, 497 U.S. 1, 19-20, 110 S. Ct.
2695, 2706, 111 L. Ed. 2d 1, 18 (1990), the Supreme Court further elaborated
upon Hepps: "[W]e think Hepps stands for the proposition that a statement
on matters of public concern must be provable as false before there can be
liability under state defamation law, at least in situations . . . where a media
defendant is involved. Thus, unlike the statement, 'In my opinion Mayor
Jones is a liar,' the statement, 'In my opinion Major Jones shows his abysmal
ignorance by accepting the teachings of Marx and Lenin,' would not be
actionable. Hepps ensures that a statement of opinion relating to matters of
public concern which does not contain a provably false factual connotation
will receive full constitutional protection." Milkovich rejected the creation of
a dichotomy between statements of fact and opinion.
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HOLTZSCHEITER v. THOMSON NEWSPAPERS, INC.
2. UNPRIVILEGED PUBLICATION TO A THIRD PARTY
The second major element of defamation is an unprivileged publication
to a third party. See Riley v. Askin & Marine Co., 134 S.C. 198, 132 S.E.
584 (1926). "No matter what a person may write, if it is not published, there
is of course no liability, since no one is injured." Carver v. Morrow, 213 S.C.
199, 202, 48 S.E.2d 814, 816 (1948). The publication of defamatory matter
is its communication, intentionally or by a negligent act, to a third party --
someone other than the person defamed. 50 Am. Jur. 2d Libel & Slander §
235 (1995).
3. FAULT ON PART OF PUBLISHER
a. Fault Bearing on Liability
The third element of defamation is fault on the part of the publisher.
The degree of fault a plaintiff must establish depends upon his status as a
public or private figure.
i. Defamation of a Public Figure
In New York Times Company v. Sullivan, 376 U.S. 254, 84 S. Ct. 710,
11 L. Ed. 2d 686 (1964), the Supreme Court announced, "The constitutional
guarantees require, we think, a federal rule that prohibits a public official4c
4c it [T]he 'public official' designation applies at the very least to those
among the hierarchy of government employees who have, or appear to the
public to have, substantial responsibility for or control over the conduct of
governmental affairs." Rosenblatt v. Baer, 383 U.S. 75, 85, 86 S. Ct. 669,
676, 15 L. Ed. 2d 597, 605 (1966). In considering the question of whether
one is a public official," the "employee's position must be one which would
invite public scrutiny and discussion of the person holding it, entirely apart
from the scrutiny and discussion occasioned by the particular charges in
controversy." Id. at 86 n.13, 86 S. Ct. at 676 n.13, 15 L. Ed. 2d at 606 n.13.
"In State v. Crenshaw we held policemen were 'officers' within the
meaning of the statute prohibiting public officers from accepting bribes. It
is both rational and logical to extend this classification to the defamation
area. Simply speaking, the status of a public official may be deemed
sufficient to warrant application of the New York Times privilege, not
because of the government employee's place on the totem pole, but because
of the public interest in a government employee's activity in a particular
context. " McClain v. Arnold, 275 S.C. 282, 284, 270 S.E.2d 124, 125
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HOLTZSCHEITER v. THOMSON NEWSPAPERS, INC.
from recovering damages for a defamatory falsehood relating to his official
conduct unless he proves that the statement was made with 'actual malice"5c --
that is, with knowledge that it was false or with reckless disregard6c of
whether it was false or not."7c Id. at 279-80, 84 S. Ct. at 726, 11 L. Ed. 2d
(1980)(citations omitted).
5c The Supreme Court in a later case noted, "We have used the term
actual malice as a shorthand to describe the First Amendment protections for
speech injurious to reputation, and we continue to do so here. But the term
can confuse as well as enlighten. In this respect, the phrase may be an
unfortunate one. In place of the term actual malice, it is better practice that
jury instructions refer to publication of a statement with knowledge of falsity
or reckless disregard as to truth or falsity." Masson v. New Yorker
Magazine, Inc., 501 U.S. 496, 511, 111 S. Ct. 2419, 2430, 115 L. Ed. 2d 447,
468-69 (1991)(citations omitted).
"Actual malice" must be proved with "convincing clarity." New York
Times, 376 U.S. at 285-86, 84 S. Ct. at 729, 11 L. Ed. 2d at 710.
6c "[R]eckless conduct is not measured by whether a reasonably prudent
man would have published, or would have investigated before publishing.
There must be sufficient evidence to permit the conclusion that the defendant
in fact entertained serious doubt as to the truth of his publication." St.
Amant v. Thompson, 390 U.S. 727, 731, 88 S. Ct. 1323, 1325, 20 L. Ed. 2d
262, 267 (1968). "The defendant in a defamation action brought by a public
official cannot, however, automatically insure a favorable verdict by testifying
that he published with a belief that the statements were true. The finder of
fact must determine whether the publication was indeed made in good faith.
Professions of good faith will be unlikely to prove persuasive, for example,
where a story is fabricated by the defendant, is the product of his
imagination, or is based wholly on an unverified anonymous telephone call.
Nor will they be likely to prevail when the publisher's allegations are so
inherently improbable that only a reckless man would have put them in
circulation. Likewise, recklessness may be found where there are obvious
reasons to doubt the veracity of the informant or the accuracy of his reports."
Id. at 732, 88 S. Ct. at 1326, 20 L. Ed. 2d at 267.
7cThis Court has on occasion applied the New York Times standard.
Stevens v. Sun Publishing Company, 270 S.C. 65, 72, 240 S.E.2d 812, 815-16,
cert. denied, 436 U.S. 945 (1978) states: "We believe actual malice is
established when reporters and publishers depart from responsible standards
of investigation and print articles on the basis of an admittedly unreliable
p.29
HOLTZSCHEITER v. THOMSON NEWSPAPERS, INC.
at 706.
Curtis Publishing Company v. Butts, 388 U.S. 130, 87 S. Ct. 1975, 18
L. Ed. 2d 1094 (1967) extended the New York Times standard to protect
defamatory criticism of "public figures,"8c in addition to "public officials."
source, without further verification . . . .
"Accordingly, this Court declines to extend constitutional protection to
articles containing blatantly false statements and opinions of a biased
informant which imply improper conduct by a public official."
8c In Gertz, the Court explained that the designation of "public figure"
may exist in either of two circumstances:
In some instances an individual may achieve such pervasive fame
or notoriety that he becomes a public figure for all purposes and
in all contexts. More commonly, an individual voluntarily injects
himself or is drawn into a particular public controversy and
thereby becomes a public figure for a limited range of issues. In
either case such persons assume special prominence in the
resolution of public questions.
Gertz, 418 U.S. at 351, 94 S. Ct. at 3013, 41 L. Ed. 2d at 812.
It further declared that "[a]bsent clear evidence of general fame or
notoriety in the community, and pervasive involvement in the affairs of
society, an individual should not be deemed a public personality for all
aspects of his life. It is preferable to reduce the public-figure question to a
more meaningful context by looking to the nature and extent of an
individual's participation in the particular controversy giving rise to the
defamation." Id. at 352, 94 S. Ct. at 3013, 41 L. Ed. 2d at 812.
Time, Inc. v. Firestone held that Firestone, a prominent individual in
Palm Beach, Florida who was involved in a highly publicized divorce
proceeding, had not assumed any role of especial prominence in the affairs
of society, and she had not thrust herself to the forefront of any particular
controversy in order to influence the resolution of issues; therefore, she was
not a public figure. 424 U.S. 448, 96 S. Ct. 958, 47 L. Ed. 2d 154 (1976).
Further, the case declared that "petitioner seeks to equate 'public controversy'
with all controversies of interest to the public. . . . Dissolution of a marriage
through judicial proceedings is not the sort of 'public controversy' referred to
in Gertz, even though the marital difficulties of extremely wealthy individuals
may be of interest to some portion of the reading public. Nor did respondent
freely choose to publicize issues as to the propriety of her married life. She
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HOLTZSCHEITER v. THOMSON NEWSPAPERS, INC.
Hence, public persons "may recover for injury to reputation only on clear and
convincing proof9c that the defamatory falsehood was made with knowledge of
its falsity or with reckless disregard for the truth." Gertz, 418 U.S. at 342,
94 S. Ct. at 3008, 41 L. Ed. 2d at 807.
ii. Defamation of a Private Person
As to the standard of liability for a publisher of defamatory material
relating to a private individual, the Supreme Court addressed this question
in Gertz as well, holding that "so long as they do not impose liability without
fault, the States may define for themselves the appropriate standard of
liability for a publisher or broadcaster of defamatory falsehood injurious to
a private individual." Gertz, 418 U.S. at 347, 94 S. Ct. at 3010, 41 L. Ed.
2d at 809.
The South Carolina Supreme Court has not explicitly addressed this
question since the Gertz decision was issued. Most jurisdictions require a
private-figure plaintiff to prove negligence to recover for defamation. 2
Harper & James, The Law of Torts § 5.0, at 13 (2d ed 1986); Turf
Lawnmower Repair, Inc. v. Bergen Record Corp., 655 A.2d 417, 423-24 n.1
(N.J. 1995)(citing 42 jurisdictions where negligence is the standard for private
plaintiffs), cert. denied, 116 S. Ct. 752 (1996). 1 agree this is the appropriate
standard of liability to be met by private figures.
b. Fault Bearing on Damages
Under the United States Supreme Court's cases, the standard of fault
also affects the matter of damages. In Gertz, the Court declared, "the States
was compelled to go to court by the State in order to obtain legal release
from the bonds of matrimony." Id. at 454, 96 S. Ct. at 965, 47 L. Ed. 2d at
163.
9c On appellate review, courts must independently examine the record to
determine whether the evidence establishes actual malice with convincing
clarity. Bose Corp. v. Consumers Union of United States, Inc., 466 U.S. 485,
104 S. Ct. 1949, 80 L. Ed. 2d 502 (1984).
In Peeler v. Spartan Radiocasting, Inc., 324 S.C. 261, 478 S.E.2d 282
(1996), cert. denied, 117 S. Ct. 2455 (1997), which involved allegedly
defamatory statements made about a public figure, we concluded that there
did not exist clear and convincing evidence to support a finding of actual
malice.
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HOLTZSCHEITER v. THOMSON NEWSPAPERS, INC.
may not permit recovery of presumed or punitive damages, at least when
liability is not based on a showing of knowledge of falsity or reckless
disregard for the truth." Gertz, 418 U.S. at 349, 94 S. Ct. at 3011, 41 L. Ed.
2d at 810. In attempting to reconcile state law with the competing interest
under the First Amendment, "It is necessary to restrict defamation plaintiffs
who do not prove knowledge of falsity or reckless disregard for the truth to
compensation for actual injury."10c Id. at 349, 94 S. Ct. at 3012, 41 L. Ed. 2d
at 811.
In Dun & Bradstreet, Inc., the Court indicated11c that the First
Amendment restriction on damages, as held in Gertz, related to what "a
private individual could obtain from a publisher for a libel that involved a
matter of public concern." Dun & Bradstreet, 472 U.S. at 751, 105 S. Ct. at
2941, 86 L. Ed. 2d at 597. Dun & Bradstreet further recognized that speech
on matters of purely private concern is of "less First Amendment concern."
Id. at 759, 105 S. Ct. at 2945, 86 L. Ed. 2d at 603. The case specifically held
that "In light of the reduced constitutional value of speech involving no
matters of public concern, . . . the state interest adequately supports awards
of presumed and punitive damages -- even absent a showing of 'actual
malice.'" Id. at 761, 105 S. Ct. at 2946, 86 L. Ed. 2d at 603-04. Thus,
"permitting recovery of presumed and punitive damages in defamation cases
absent a showing of 'actual malice' does not violate the First Amendment
when the defamatory statements do not involve matters of public concern."
Id. at 763, 105 S. Ct. at 2947, 86 L. Ed. 2d at 605.
10c "[A]ctual injury is not limited to out-of-pocket loss. Indeed, the more
customary types of actual harm inflicted by defamatory falsehood include
impairment of reputation and standing in the community, personal
humiliation, and mental anguish and suffering." Gertz, 418 U.S. at 350, 94
S. Ct. at 3012, 41 L. Ed. 2d at 81 1.
11c Dun & Bradstreet did not command a clear majority in limiting Gertz
to matters of public concern. Justice Powell announced the Court's judgment
and wrote an opinion in which Justices Rehnquist and O'Connor joined.
Then-Chief Justice Burger concurred in the judgment and agreed that Gertz
should be limited to statements concerning matters of general public
importance. Id. at 763-64, 105 S. Ct. at 2948, 86 L. Ed. 2d at 605-06
(Burger, C.J., concurring). Although Justice White believed that Gertz should
be overruled, he nevertheless concurred in the judgment, writing that the
defamatory publication in the case did not deal with a matter of public
importance. Id. at 774, 105 S. Ct. at 2953, 86 L. Ed. 2d at 612 (White, J.,
concurring).
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HOLTZSCHEITER v. THOMSON NEWSPAPERS, INC.
Dun & Bradstreet suggests, contrary to Gertz, that punitive damages
may be awarded even absent a showing of actual malice. I would adhere to
the Gertz standard for a number of reasons. First, Dun & Bradstreet was
supported by a slim plurality of the Court; as such, its future viability is
questionable. Second, Dun & Bradstreet envisioned the possibility of a lower
threshold for punitive damages. We are obviously free to select a higher
standard for South Carolina. Third, the adoption of an actual malice
standard for punitive damages in defamation cases is consistent with our
standard in other types of punitive damages cases. Actual malice suggests
knowledge of falsity or reckless disregard as to truth or falsity. This does not
differ significantly with the frequently enunciated standard, "willful, wanton,
or in reckless disregard of the plaintiffs rights." See Taylor v. Medenica, 324
S.C. 200, 479 S.E.2d 35 (1996)(In order for a plaintiff to recover punitive
damages, there must be evidence the defendant's conduct was willful, wanton,
or in reckless disregard of the plaintiff s rights.).
4. ACTIONABILITY OR EXISTENCE OF SPECIAL HARM
The greatest confusion in South Carolina defamation law, as evidenced
by the present case, surrounds the issues of actionability and special
damages. This stems from the fact that South Carolina has deviated from
the majority rule by adopting the concept of libel per quod. As a result of
this deviation, a host of confusing and inconsistently used terms have
appeared in case law: "libelous," "libelous per se," "libelous per quod,"
"slanderous per se," "actionable," "actionable per se," and "actionable per
quod." Only by completely rejecting this deviant formulation and by rejoining
the mainstream of defamation law can any clarity be brought to the law in
our state.
Traditionally, two classes of statements have been considered actionable
without proof of special damages:12c (1) all libel, and (2) four categories of
slander, described as "slander per se." Lily, 178 S.C. 278, 182 S.E. 889.
These four categories include statements that impute unchastity, a criminal
offense, a loathsome disease, or matter incompatible with business or trade.
Thus, when a statement constitutes libel or falls into one of the four
categories of slander, damages are presumed. See Fitchette v. Sumter
12c "Stated succinctly, 'general damages' are those which arise by inference
of law and need not be proved by evidence, while 'special damages' must
always be pleaded and proved . . . ." Lily v. Belks Dep't Store, 178 S.C. 278,
284, 182 S.E. S89, S91 (1935). Special damages are generally of a pecuniary
nature. 50 Am. Jur. 2d Libel & Slander § 375 (1995).
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HOLTZSCHEITER v. THOMSON NEWSPAPERS, INC.
Hardwood Co., 145 S.C. 53, 142 S.E. 828 (1928); Merritt v. Great Atlantic &
Pacific Tea Co., 179 S.C. 474, 184 S.E. 145 (1936). In all other cases --
namely, when slander does not fall into the above-named categories -- special
damages must be established. 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. Galloway v. Cox, 172
S.C. 101, 172 S.E. 761 (1934). 13c
South Carolina, however, has deviated from the above formulation of
actionability by creating distinctions in libel in the form of "libel per se" and
"libel per quod": "A libel per se is one which is actionable on its face. A per
quod libel, however, is one [which is] not actionable on its face, but becomes
so by reason of the peculiar situation or occasion upon which the words are
spoken or written." Oliveros v. Henderson, 116 S.C. 77, 82, 106 S.E. 855, 857
(1921). If a statement were libelous per quod, the plaintiff would have to
present evidence of special damages. See Costas v. Florence Printing Co.,
237 S.C. 655, 663, 118 S.E.2d 696, 700 (1961)("[T]he article published by the
appellant was not libelous per se, and there being no allegations in the
complaint of special damages, and no extrinsic circumstances alleged, which
makes the words libelous, no cause of action was stated by the respondent
against the appellant in the complaint."). Thus, contrary to the general rule
that all libel is actionable, this approach creates a sub-category of libelous
statements that condition actionability on the averment of certain facts and
circumstances and the demonstration of special damages.
The haze enveloping the issue of actionability, because of South
Carolina's departure from the majority approach, grew into an impenetrable
miasma of confusion as a result of Capps v. Watts, 271 S.C. 276, 246 S.E.2d
606 (1978). Capps is a paragon of obfuscation. The following excerpts are
illustrative: "To be libelous the words, on their face or by reason of extrinsic
facts, must tend to impeach the reputation of the plaintiff . . . . To be
actionable, the libel, as a result of its tendency to impeach or injure the
plaintiffs reputation, must thereby injure him." 271 S.C. at 281, 246 S.E.2d
at 609. "If the libelous publication is actionable without the pleading and
proof of special damage, it is said to be 'actionable per se.' If special damage
must be pled to maintain an action, the defamation is 'actionable per quod."'
13c See Fonville v. M'Nease, Dud 303, 310 (1838)("Words are evanescent;
they are as fleeting as the perishing flowers of spring; they are often the
results of mere passion; but written slander is to remain; it is to be treasured
up by every other malicious man for his day of vengeance . . . .").
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HOLTZSCHEITER v. THOMSON NEWSPAPERS, INC.
Id. "[W]hen viewed in light of the extrinsic facts which have been pled (the
inducement), we conclude that the defendant's remarks are susceptible of a
libelous construction. Or, stated technically, the defendant's remarks are
libelous per quod." Id. at 282, 246 S.E.2d at 609. "[W]e do not agree with
the defendant's contention that an allegation of special damage is necessary
to render a per quod libel actionable." Id. at 283, 246 S.E.2d at 610. "[T]he
law of this state, as we interpret it, does not require the pleading of special
damage simply because a publication is libelous only by reason of extrinsic
circumstances." Id. "'Actionable per se' simply means that a libelous
publication, whether libelous on its face or by reason of extrinsic facts, is
actionable without the pleading of special damage. 'Libelous per se' means
that a publication is both (1) libelous on its face and (2) actionable on its face
without the pleading of special damage." Id. at 284-85 n.2, 246 S.E.2d at 611
n.2.
Even if it is assumed that Capps presents a coherent analytical
framework (an assumption that may well be unfounded), the framework is
so complicated that mortal legal minds cannot be expected to decipher its
cryptic allusions, subtle distinctions, and procedural niceties. Capps ignored
a long line of cases which had neither created the elusive differences between
actionability and libel per se that Capps attempts to make out, nor required
the pleading of special damages for libel per quod.14c Unfortunately, Capps
14c See Brown v. National Home Ins. Co., 239 S.C. 488, 491, 123 S.E.2d
850, 851 (1962)("A libel per se is one which is actionable on its face. A per
quod libel, however, is one not actionable on its face, but becomes so by
reason of the peculiar situation or occasion upon which the words are
written."); Costas, 237 S.C. at 661, 118 S.E.2d at 699 ("If the alleged
defamatory words are not actionable on their face, but derive their
defamatory import from extrinsic facts and circumstances, such extrinsic facts
and circumstances must be set forth and connected with the words charged
by proper averment."); Drakeford v. Dixie Home Stores, 233 S.C. 519, 105
S.E.2d 711 (1958)(implying that slanderous per se is synonymous with
actionable per se, and declaring that words not actionable by their plain and
ordinary meaning cannot be made so by innuendo); Herring v. Lawrence
Warehouse Co., 222 S.C. 226, 72 S.E.2d 453 (1952)(implying that actionable
per se is synonymous with slanderous per se); Spigner v. Provident Life &
Accident Ins. Co., 148 S.C. 249, 254, 146 S.E. 8, 10 (1928)("[I]t is evident that
the words objected to in the notice are not libelous per se, and there are no
allegations in the complaint, of special damages, and no extrinsic
circumstances alleged which make the words in the notice libelous; hence, no
cause of action is stated . . . ."); Prickett v. Western Union Tel. Co., 134 S.C.
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HOLTZSCHEITER v. THOMSON NEWSP@PERS, INC.
has found support in a few recent cases: Holtzscheiter v. Thomson
Newspapers, Inc., 306 S.C. 297, 300, 411 S.E.2d 664, 665 (1991)("In
determining if proof of special damage is necessary to make a libel actionable'
we are guided by our leading case on the subject, Capps . . . ."); Wilhoit V.
WCSC, Inc., 293 S.C. 34, 40, 358 S.E.2d 397, 400 (Ct. App. 1987)("As our
Supreme Court stated in Capps v. Watts, the law of this state does not
require the pleading of special damages simply because the publication is
libelous per quod.")(citations omitted); and Warner v. Rudnick, 280 S.C. 595,
313 S.E.2d 359 (Ct. App. 1984)(citing Capps).
Libel per quod is a deviation; Capps is a further aberration upon this
deviation. The rule of libel per quod justifiably has been described as
"unsound,"15c "mind-boggling,"16c and even "spurious."17c In Sauerhoff, the Fourth
Circuit Court of Appeals referred to it as among the "rustic relics of ancient
asininity." Sauerhoff v. Hearst Corp., 538 F.2d 588, 590 n.1 (4th Cir. 1976).
The district court in the same case did not have kind words for the subject
either: "For herein the irrational animals known as libel 'per quod' and libel
'per se,' and the Merlinesque touchstones which attach to them, must be
identified, whether or not their existence can be rationally justified."
Sauerhoff, 388 F. Supp. at 118. One commentator has written, "[T]he rule
of 'libel per quod' was spawned by confusion over such terms as 'actionable
per se,' 'libel per se,' 'slander per se,' 'per quod,' and 'innuendo,' in courts that
had no clear understanding of the law of defamation, its historical
background, and the frequently silly distinctions drawn between slander and
276, 132 S. E. 587 (1926)("Party promised to pay and refused" was not
libelous per se, and, in absence of allegation of special damage or extrinsic
facts and circumstances which would render it libelous per se, complaint was
insufficient to state a cause of action); Bell v. Clinton Oil Mill, 129 S.C. 242,
251, 124 S.E. 7, 10 (1924)("The rule at common law was that, if the alleged
defamatory statement was not. . . actionable per se, the plaintiffs complaint
must show, by what was termed the inducement, the extrinsic circumstances
which coupled with the language used affected the construction and rendered
it actionable . . . .").
15c Herrmann v. Newark Morning Ledger Co., 138 A.2d 61, 74 (N.J.
Super. Ct. App. Div. 195S).
16c Sauerhoff v. Hearst Corp., 388 F. Supp. 117, 125 (D. Md. 1974).
17c Laurence H. Eldredge, The Spurious Rule of Libel Per Quod, 79 Harv.
L. Rev. 733 (1966).
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HOLTZSCHEITER v. THOMSON NEWSPAPERS, INC.
libel." Eldredge, at 736.
"[T]he harmful impact of a libel upon its victim is not less in the
particular instance where its odious meaning requires resort to extrinsic facts
which are known to the recipient of the libel. To require proof of pecuniary
damages in such cases as a basis for a cause of action would be to
emasculate the action without rational justification." Herrmann, 138 A.2d at
74. Why should special damages be presumed because a statement is
defamatory on its face, but not be presumed simply because extrinsic facts
are needed to establish the defamatory nature of the statement? Principled
justification cannot be provided for the existence of the concept of libel per
quod, much less the Capps variation on this rule.
"The requirement for special damages in the case of 'libel per quod' is
clearly contrary to the historical rule as developed in England and to the
apparent weight of authority in this country . . . ." 2 Harper & James, §
5.9A, at 84. A growing number of courts have rejected the concept of libel
per quod, either explicitly or through the adoption of section 569 of the
Restatement of Torts.18c The Restatement provides: "One who falsely
publishes matter defamatory of another in such a manner as to make the
publication of a libel is subject to liability to the other although no special
harm results from the publication." Restatement § 569. This formulation
encapsulates the common law rule that all libel is actionable, eliminating,
thereby, the distinction between libel per se and libel per quod. Under such
an approach, there is no need to establish special damages for statements
that are libel per quod.19c Adoption of section 569 by this Court would do
18c Spence v. Funk, 396 A.2d 967 (Del. 1978); Kelly v. Iowa State Educ.
Ass'n, 372 N.W.2d 288 (Iowa Ct. App. 1985); Sharratt v. Housing Innovations,
Inc., 310 N.E.2d 343 (Mass. 1974); Fulton v. Mississippi Publishers Corp., 498
So.2d 1215 (Miss. 1986); Nazeri v. Missouri Valley College, 860 S.W.2d 303
(Mo. 1993)(en banc); Herrmann v. Newark- Morning Ledger Co., 138 A.2d 61
(N.J. 1958); Matherson v. Marchello, 473 N.Y.S.2d 998 (N.Y. App. Div. 1984);
Hinkle v. Alexander, 417 P.2d 586 (Or. 1966)(en banc); Agriss v. Roadway
Express, Inc., 483 A.2d 456 (Pa. Super. Ct. 1984); Lent v. Huntoon, 470 A.2d
1162 (Vt; 1983); Denny v. Mertz, 267 N.W.2d 304 (Wis. 1978).
19c It should be noted that by abolishing the rule of libel per quod, the
Court would not be mandating the elimination of the pleading of extrinsic
facts and circumstances. Such pleading is still relevant to the first element
of defamation, viz., the existence of a false and defamatory statement. Thus,
if a statement is not on its face defamatory, then the plaintiff might need to
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HOLTZSCHEITER v. THOMSON NEWSPAPERS, INC.
much to clarify defamation law in this state.
B. APPLICATION OF LAW TO PRESENT CASE
As set forth earlier, the elements of defamation include: (1) a false and
defamatory statement concerning another; (2) an unprivileged publication to
a third party; (3) fault on the part of the publisher; and (4) either
actionability of the statement irrespective of special harm or the existence of
special harm caused by the publication. See Restatement § 558.
1. FALSE AND DEFAMATORY STATEMENT CONCERNING ANOTHER
A communication is defamatory if it tends to harm the reputation of
another as to lower him in the estimation of the community or to deter third
persons from associating or dealing with him. Restatement § 559. Initially,
it is for the trial court to determine whether the communication is reasonably
capable of conveying a defamatory meaning. If 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. In some cases, amputations are so
clearly innocent or so clearly defamatory that the court is justified in
determining the question itself. See Restatement § 614 cmt. d. In making
the determination of whether to submit the issue to the jury, the trial court
may consider not only the statement on its face, but also evidence of any
extrinsic facts and circumstances.
Thus, in the present case, the trial court must determine whether the
statement -- "there simply was no family support to encourage [Shannon] to
continue her education" -- is reasonably capable of conveying a defamatory
meaning. The statement would convey a defamatory meaning if it tends to
harm the reputation of Holtzscheiter as to lower her in the estimation-of the
community or to deter third persons from associating or dealing with her.
If the question is one on which reasonable minds might differ, then the issue
would be submitted to the jury (assuming the other elements of defamation
have been satisfied).
In addition to being defamatory, the statement must be false. Falsity
plead and prove extrinsic facts and circumstances that make the statement
defamatory. The form of a libelous statement, whether it is defamatory on
its face or not, would henceforth have no connection to the matter of special
damages.
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HOLTZSCHEITER v. THOMSON NEWSPAPERS, INC.
was presumed under the common law, but this presumption has been altered
by the Supreme Court's decision in Hepps, 475 U.S. at 768-69, 106 S. Ct. at
1559, 89 L. Ed. 2d at 787 ("[A]t least where a newspaper publishes speech
of public concern, a private-figure plaintiff cannot recover damages without
also showing that the statements at issue are false."). Thus, an initial
question that must be answered is whether the speech is of public concern.
If it is a matter of public concern (at least where a media defendant is
involved20c), the plaintiff must also prove its falsity. If it is a matter of
private concern, the plaintiff does not have to prove falsity. The publisher
may avoid liability if it successfully proves the statement is true (i.e. the
affirmative defense of truth is available to the publisher in any type of case).
I find that the instant statement was not speech of public concern. As
the Supreme Court explained in Dun & Bradstreet, "It is speech on matters
of public concern that is at the heart of the First Amendment's protection."
472 U.S. at 758-59, 105 S. Ct. at 2944-45, 86 L. Ed. 2d at 602 (internal
citations omitted). The case implied that matters of public concern are those
related to the "unfettered interchange of ideas for the bringing about of
political and social changes desired by the people." Id. at 759, 105 S. Ct. at
2945, 86 L. Ed. 2d at 602-03 (quoting Connick, 461 U.S. at 145, 103 S. Ct.
at 16S9, 75 L. Ed. 2d at 718-19). I cannot conceive how the statement "there
simply was no family support to encourage [Shannon] to continue her
education," is a matter of public concern. It solely relates to a matter of
private concern: family support of an individual. Thus, the issue of falsity
does not have to be proved by Holtzscheiter in her case, but truth of the
statement may be raised by the newspaper as an affirmative defense. See
Holtzscheiter, 297 S.C. at 309, 411 S.E.2d at 670 (Toal, J., dissenting);
Dauterman v. State-Record Co., 249 S.C. 512, 154 S.E.2d 919 (1967).
2. UNPRIVILEGED PUBLICATION TO A THIRD PARTY
The next element of defamation is an unprivileged publication to a
third party. Shannon's doctor made the statement in issue here to the
newspaper's reporter. The newspaper printed this statement. The doctor's
statement to the reporter constituted publication to a third party. When the
newspaper printed these words, it also engaged in a publication by
republishing the potentially defamatory matter. See Restatement § 578, cmt.
d. Therefore, an unprivileged publication to a third party (newspaper
readers) has occurred.
20c See Milkovich, 497 U.S. 1, 110 S. Ct. 2695, 111 L. Ed. 2d 1.
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HOLTZSCHEITER v. THOMSON NEWSPAPERS, INC.
3. FAULT ON PART OF PUBLISHER
Next, the fault of the publisher must be considered. The degree of the
publisher's fault required to be established by the plaintiff depends upon the
status of the plaintiff as a public or private figure. Holtzscheiter is clearly
a private figure.
Holtzscheiter obviously is neither a public official, see New York Times,
376 U.S. 254, 84 S. Ct. 710, 11 L. Ed. 2d 686, nor a public figure, see Curtis
Publishing Company, 388 U.S. 130, 87 S. Ct. 1975, 18 L. Ed. 2d 1094, as she
does not fall into either of the two Gertz public figure categories.
Holtzscheiter has not achieved "such pervasive fame or notoriety" that she
has become a "public figure for all purposes and in all contexts." See Gertz
418 U.S. at 351, 94 S. Ct. at 3013, 41 L. Ed. 2d at 812. Nor has she become
a public figure by voluntarily injecting herself or being drawn into "a
particular public controversy." Id. Because Holtzscheiter is a private figure,
this Court may define the appropriate standard of liability for the publisher.
See id. at 347, 94 S. Ct. at 3010, 41 L. Ed. 2d at 809. So long as we do not
impose liability without fault, we may define for ourselves the appropriate
standard of liability for a publisher or broadcaster of defamatory falsehood
injurious to a private individual. I concur with the overwhelming majority
of jurisdictions, which have held that simple negligence is the appropriate
standard of proof for a private-figure plaintiff. On remand, as to the liability
issue, it must be determined whether the actions of the newspaper were
negligent.
As to the issue of punitive damages, I agree that a directed verdict
should have been granted to the newspaper. There was not evidence of
actual malice -- knowledge of falsity or reckless disregard as to truth or
falsity. Hence, the issue should not have been submitted to the jury.
4. ACTIONABILITY OR EXISTENCE OF SPECIAL HARM
As discussed above, traditionally, two classes of statements have been
considered actionable without proof of special damages: (1) all libel and (2)
four categories of slander, described as "slander per se," which encompasses
statements imputing unchastity, a criminal offense, a loathsome disease, or
matter incompatible with business or trade. The allegedly defamatory
statement was obviously republished by the newspaper in written form.
Thus, it would potentially constitute libel. As such, it is actionable without
proof of special damages. The discussion above explains why the adoption of
section 569 of the Restatement is necessary. Under section 569, "One who
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HOLTZSCHEITER v. THOMSON NEWSPAPERS, INC.
falsely publishes matter defamatory of another in such a manner as to make
the publication of a libel is subject to liability to the other although no
special harm results from the publication." Therefore, it would not be
necessary for the plaintiff to establish special harm.21c Under such an
approach, we need not ever concern ourselves with the difference between
libel per se and libel per quod because all libel would be treated equally.
Thus, in the present libel case, Holtzscheiter would not have to show special
damages in order to recover.
CONCLUSION
Accordingly, I would remand this matter, in light of the principles set
forth above, for a new trial on the issue of actual damages. After the
plaintiff has presented her case, the newspaper can, of course, offer any
defenses it may have, such as the affirmative defense of truth.
In sum, the principal reason why I do not join the majority is not
because of defects in the Chief Justice's opinion. He has admirably
attempted to resolve the dispute by clarifying the current state of the law.
Rather, I am firmly convinced that the present status of our defamation
jurisprudence is so convoluted, so hopelessly and irretrievably confused, that
nothing short of a fresh start can bring any sanity, and predictability, to this
very important area of the law.
21cIf, however, the present action involved not the newspaper's printing
of the doctor's statement, but concerned the doctor's statement to the
reporter, then Holtzscheiter would have to show special damages. The latter
case would involve slander, not libel, and the doctor's statement would not
fall into the four slander per se categories for which special damages would
be presumed.
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HOLTZSCHEITER v. THOMSON NEWSPAPERS, INC.
CHANDLER, A.A.J.: I respectfully dissent in part.
Initially, I am in agreement with the majority's thorough discussion
of defamation law in general. This discussion clarifies some of the difficult
common law and constitutional concepts related to the law of defamation in this
State.
In addition, I concur with the majority's finding of "no reversible
error on this record in the trial judge's denial of the newspaper's directed verdict
motion on liability." As pointed out by the majority, most of the arguments raised
by the newspaper on this issue are not preserved for appellate review because
they were not raised to and ruled on by the trial judge. I also agree with the
majority that those arguments preserved for review are without merit.
Further, I agree the trial judge erred in denying the newspaper's
directed verdict motion on the issue of punitive damages. There is no evidence the
newspaper either knew the article was false or had serious reservations about its
truthfulness when the article was prepared and published.
I disagree, however, with the majority's ultimate conclusion that the
case should be remanded for a new trial.
Citing Sanders v. Prince, 304 S.C. 236, 403 S.E.2d 640 (1991), the
majority holds that the proper relief in this case is a new trial absolute because, in
part, the punitive damage award rendered by the jury was excessive. However, if
the punitive damage award is stricken, as the majority holds it should be, I fail to
see why a new trial is required when the actual damage award is not, in my
opinion, so shockingly disproportionate to the injuries as to indicate that the jury
acted out of passion, caprice, prejudice, or other considerations not founded on the
evidence. Indeed, the majority makes no finding that the actual damage award
was excessive.1d
In its opinion, the majority also finds that "the parties were denied a
fair trial as the result of the confusion generated by [this Court's] decision in
Holtzscheiter I." I disagree. Although the Holtzscheiter I opinion is not as
detailed on the law of defamation as the majority's opinion in this case, the
Holtzscheiter I opinion is not confusing. It merely holds that because proof of
1d In Sanders, the Court held that a new trial on all issues was required
because "[t]he measurement of [punitive] damages necessarily depend[ed] on the
jury's view of the facts giving rise to liability," and that "in fairness to all parties
... these issues should be tried together before the same fact-finder." Id. at 239,
403 S.E.2d at 642. Not so in the case at hand. Here, if the punitive damage
award is stricken, the "measurement of punitive damages" is no longer an issue
which would require a new trial absolute.
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HOLTZSCHEITER v. THOMSON NEWSPAPERS, INC.
special damages was not required, the original trial judge erred in granting the
newspaper's motion for a directed verdict on the defamation action.2d
I also disagree with the majority's interpretation of Holtzscheiter I's
finding as to whether the statement at issue was defamatory per se or defamatory
per quod. In my opinion, it is clear the majority opinion in Holtzscheiter I found
that the statement was defamatory per se.
As the majority points out in the case at hand, "[if] the defamatory
meaning of a message or statement may be obvious on the face of the statement
... the statement is defamatory per se." (emphasis supplied). The majority
opinion in Holtzscheiter I stated: "Although ambiguous, the newspaper article
could be read, on its face, to charge Holtzscheiter with failing to support her
daughter by not encouraging her to continue her education." (emphasis supplied).
306 S.C. at 301, 411 S.E.2d at 666. Consequently, the majority in Holtzscheiter I
found the statement to be defamatory per se.3d
In summary, I would affirm the jury's award of actual damages but
reverse the award of punitive damages.
MOORE, A.J., concurs.
2d The opinion also holds (1) the trial judge did not err in granting a directed
verdict on the action for intentional infliction of emotional distress, and (2)
evidence of how others may have perceived the statement was admissible.
3d In my opinion, the fact that a statement is "ambiguous" does not preclude
the statement from being defamatory per se. For example, the statement "A's son
is a thief" is defamatory per se. However, if A has more than one son, the
statement is also ambiguous.
p.43