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24842 - Holtzscheiter v. Thomson Newspapers, Inc.

Davis Adv. Sh. No. XX
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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HOLTZSCHEITER v. THOMSON NEWSPAPERS, INC,







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



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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).



p.33


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



p.37


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