McGlothlin v. Hennelly
Filing
38
ORDER granting in part and denying in part 29 Motion to Dismiss for Failure to State a Claim Signed by Honorable David C Norton on March 1, 2019.(cban, )
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF SOUTH CAROLINA
BEAUFORT DIVISION
JAMES W. MCGLOTHLIN,
)
)
Plaintiff,
)
)
vs.
)
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KEVIN N. HENNELLY,
)
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Defendant.
)
____________________________________)
No. 9:18-cv-00246
ORDER
This matter comes before the court on Kevin Hennelly’s (“Hennelly”) motion to
dismiss for failure to state a claim, ECF No. 29. The court grants in part and denies in
part the motion to dismiss.
I. BACKGROUND
This matter arises from an action of alleged defamation and libel brought by
James McGlothlin (“McGlothlin”) against Hennelly. McGlothlin is a founding member
of The United Company, which is the parent company of Scratch Golf, LLC, a South
Carolina corporation. Hennelly lives in Beaufort County, South Carolina. Scratch Golf
owns Hilton Head National Golf Course (the “Property”) in Beaufort County, South
Carolina. In July 2016, Scratch Golf submitted an application to Beaufort County to
amend the rezoning of the Property (“Rezoning Application”). On May 22, 2017, the
Beaufort County Council denied the Rezoning Application.
McGlothlin alleges that Hennelly made three separate posts on Facebook and on
the website of the Island Packet, a local newspaper, that contained various defamatory
statements about him, in an effort to imply that McGlothlin is corrupt or may have
committed crimes. McGlothlin attached images of those statements to his complaint.
1
For the most part, these statements relate to the Rezoning Application. Those posts and
their statements are below.
Internet Comment 1
May 12, 2017 post by Hennelly on his own Facebook Page, ECF No. 1-1
(“May 12 Facebook Post”)
Statement: “A little something the Island Packet overlooked”
The May 12 Facebook Post included a link to this Washington Post article
(“Washington Post Article”): Virginia governor’s wife was paid $36,000
as consultant to coal: How Robert McDonnell reported role affected what
he had to disclose on annual financial reforms.
Internet Comment 2
May 14, 2017 comment on the online version of a May 12 article from
The Island Packet newspaper (“Island Packet Article”), ECF No. 1-2,
Hilton Head National developers: Why golf lost its swing there and what
the future holds (“Island Packet Comment”)
Statement: It looks like they left out a few pertinent facts. The most
glaring is the corrupt people involved. This guy Kent was Chief of Staff
to the corrupt Governor of Virginia. He has never built a swing set never
mind a 300m dollar City! James Woodrow McGlothlin gave the corrupt
Governor McDonald of Virginia wife a “no show” job. The McDonalds
never reported income, $36,000. These guys are crony capitalists and will
break every rule in the book to get a government favor or handout. Let’s
vote NO to zoning change and send these carpetbaggers packing. Let’s
tell them loud and clear our elected officials are not for sale and are above
reproach.
Internet Comment 3
May 23, 2017 post by Hennelly on his own Facebook page,
ECF No. 1-3 (“May 23 Facebook Post”)
Statement: A few final observations. This was never about a project; there
is no project. This is about a request for zoning change for the sole
purpose to quadruple the value of the land. The crooked owners wanted a
government handout and not give anything in return. This is Crony
Capitalism. I hope it is clear to these crooks from Virginia this will not fly
in Beaufort County. It is sad that Brian Flewelling believes public input is
external drama and distracts from the process. Brian you are wrong.
2
Chairman Paul Summerville did an excellent job from the beginning
providing a fully transparent process and bent over backwards to hear all
public comment, thanks Paul. We saw how the board should function and
should demand the same from Beaufort County school Board. Tabor Vaux
did an excellent job and proved himself a leader in our community. He
tried to get a development agreement but wisely. The Island Packet gets
an “incomplete” grade on their coverage of the issue. For some reason the
refused to print the documented corruption of the owners of the United
Company. Martin Kent and James McGlothlin were up to their eyeballs in
the recent scandals in Virginia with the Governor and his wife.
McGlothlin gave the Governors wife a no show job at the heart of the
ethical and criminal activity Beaufort County and Bluffton residents; you
rock. What an outpouring of opposition. Over 3700 people signed the
petition. Proud to live in the community with informed involved
residents. Last, hats off to Collins Doughtie, you gave so much to our
community …
McGlothlin first sued Hennelly in the Middle District of Florida (the “Florida
Suit”). Hennelly responded by filing a motion to dismiss under Federal Rule of Civil
Procedure 12(b)(2) and (3), based on lack of personal jurisdiction and improper venue.
McGlothlin opposed this motion, and the court found that the Florida Long Arm Statute
did not confer jurisdiction over non-resident Hennelly. The court granted the motion to
dismiss but gave McGlothlin two weeks to amend his complaint. McGlothlin chose to
voluntarily dismiss the Florida Suit two weeks later.
McGlothlin filed suit in this district on January 30, 2018, based the same facts.
The complaint brings causes of action for defamation and negligence/ gross negligence/
recklessness, and requests injunctive relief. McGlothlin asks for actual and punitive
damages of an amount in excess of $75,000. McGlothlin also asks the court to enjoin
Hennelly from making or publishing any other false, defamatory, and/or libelous
statements as to McGlothlin, and to order him to remove all information and statements
he has already disseminated. Hennelly filed a motion to stay action and award fees under
3
Federal Rule of Civil Procedure 41(d) on February 15, 2018, ECF No. 6, which the court
denied.
On November 16, 2018, Hennelly filed a motion to dismiss for failure to state a
claim. ECF No. 29. On December 10, 2018, McGlothlin filed his response in
opposition, ECF No. 32, and on January 8, 2019, Hennelly filed his response, ECF No.
35. The court held a hearing on the motion to dismiss on January 31, 2019.1 The motion
to dismiss has been fully briefed and is ripe for the court’s review.
II. STANDARD
A Rule 12(b)(6) motion for failure to state a claim upon which relief can be
granted “challenges the legal sufficiency of a complaint.” Francis v. Giacomelli, 588
F.3d 186, 192 (4th Cir. 2009) (citations omitted); see also Republican Party of N.C. v.
Martin, 980 F.2d 943, 952 (4th Cir. 1992) (“A motion to dismiss under Rule 12(b)(6) . . .
does not resolve contests surrounding the facts, the merits of a claim, or the applicability
of defenses.”). To be legally sufficient, a pleading must contain a “short and plain
statement of the claim showing that the pleader is entitled to relief.” Fed. R. Civ. P.
8(a)(2). A Rule 12(b)(6) motion should not be granted unless it appears certain that the
plaintiff can prove no set of facts that would support his claim and would entitle him to
relief. Mylan Labs., Inc. v. Matkari, 7 F.3d 1130, 1134 (4th Cir. 1993). When
considering a Rule 12(b)(6) motion, the court should accept all well-pleaded allegations
as true and should view the complaint in a light most favorable to the plaintiff.
Ostrzenski v. Seigel, 177 F.3d 245, 251 (4th Cir.1999); Mylan Labs., Inc., 7 F.3d at 1134.
1
The court would like to acknowledge S. Luke Morgan, a third-year law student at Duke
University School of Law, who skillfully argued this motion on behalf of Hennelly. The
court wishes him well as he concludes his study of law and embarks upon what promises
to be a successful career.
4
“To survive a motion to dismiss, a complaint must contain sufficient factual matter,
accepted as true, to ‘state a claim to relief that is plausible on its face.’” Ashcroft v.
Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atlantic Corp. v. Twombly, 550 U.S. 544,
570 (2007)). “A claim has facial plausibility when the plaintiff pleads factual content
that allows the court to draw the reasonable inference that the defendant is liable for the
misconduct alleged.” Id.
III. DISCUSSION
In deciding upon this motion to dismiss, the court must consider whether
McGlothlin has sufficiently alleged facts upon which he could sustain a successful
defamation action. This analysis requires the balancing of principles from both South
Carolina common law and the United States Constitution. Even if McGlothlin has
sufficiently alleged the elements of a defamation cause of action under South Carolina
law, his claims may still be thwarted by First Amendment protection of certain kinds of
speech. The court considers each in turn.
A. South Carolina Defamation Claim
Defamation claims can be brought for either libel or slander. Parrish v. Allison,
656 S.E.2d 382, 388 (S.C. Ct. App. 2007). “Libel is the publication of defamatory
material by written or printed words,” while slander is “spoken defamation.” Id. To
bring a successful claim for defamation, a plaintiff must prove: “(1) a false and
defamatory statement was made; (2) the unprivileged publication of the statement was
made to a third party; (3) the publisher was at fault; and (4) either actionability of the
statement regardless of special harm or the publication of the statement caused special
5
harm.” Kunst v. Loree, 817 S.E.2d 295, 302 (S.C. Ct. App. 2018), reh’g denied (Aug.
16, 2018).
Regarding the first element, if there is any dispute regarding the truth of the
defamatory statement, it is a question for the jury to determine. Weir v. Citicorp Nat’l
Servs., Inc., 435 S.E.2d 864, 867 (S.C. 1993). “The publication of a statement 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.” Fleming v. Rose, 567 S.E.2d 857, 860 (S.C. 2002). Defamatory statements are
either defamatory per se or defamatory per quod. Parrish, 656 S.E.2d at 388. A
statement is defamatory per se if its defamatory meaning is clear from the statement
standing alone; if the reader of the statement must know additional facts or circumstances
outside of the statement in order to understand its defamatory nature, then the statement
is defamatory per quod. Id. “In cases involving defamation per quod, the plaintiff must
introduce facts extrinsic to the statement itself in order to prove a defamatory
meaning.” Holtzscheiter v. Thomson Newspapers, Inc, 506 S.E.2d 497, 509 (S.C. 1998).
“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.” Id. However, the court
may consider evidence of “extrinsic facts and circumstances” in determining whether to
submit the issue to the jury.2 Id.
Under the fourth element, the plaintiff must either prove that he suffered special
harm from the allegedly defamatory statement or demonstrate that the statement is
2
Of course, here the court may only consider facts alleged in the complaint and the
documents attached to the complaint or incorporated by reference in the complaint.
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otherwise “actionable.” Defamation is actionable per se3 when the statements impute the
plaintiff with one of the following 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.” Goodwin v. Kennedy, 552 S.E.2d 319, 322–
23 (S.C. Ct. App. 2001). When a statement falls into one of these categories and is thus
actionable per se, the court presumes that the defendant acted with common law malice
and that general damages are present. Fountain v. First Reliance Bank, 730 S.E.2d 305,
309 (S.C. 2012). Additionally, “[l]ibel is almost always actionable per se.” Jackson v.
Denmark Tech. Coll., 2018 WL 3729743, at 5 (D.S.C. Aug. 6, 2018); see Erickson v.
Jones St. Publishers, LLC, 629 S.E.2d 653, 664 (S.C. 2006) (“Essentially, all libel is
actionable per se, while only certain categories of slander are actionable per se.”);
Holtzscheiter II, 506 S.E.2d at 502 (“Libel is actionable per se if it involves written or
printed words which tend to . . . reduce his character or reputation in the estimation of
his friends or acquaintances, or the public . . . .”). “Whether the statement is actionable
per se is a matter of law for the court to resolve.” Fountain, 70 S.E.2d at 309.
Applying this standard to McGlothlin’s complaint, and assuming all of the facts
alleged therein to be true, the court considers whether he has sufficiently alleged these
elements to survive a motion to dismiss under South Carolina defamation law pending
the First Amendment limitations discussed in Section III.B. In regards to the first factor,
McGlothlin has claimed that Henelly’s online comments were false and defamatory. On
May 12, 2017, Hennelly posted on his Facebook page a link to the Washington Post
Article, including the statement “a little something the Island Packet overlooked.” May
3
Actionability per se is distinct from the concept of defamation per se v. defamation per
quod.
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12 Facebook Post, ECF No. 1-1. McGlothlin claims that this was done “in an effort to
imply that [McGlothlin] is corrupt or may have committed crimes that constitute a felony,
and in order to impugn [his] character publicly.” ECF No. 1 ¶ 9. However, McGlothlin
has not alleged that either the contents of the Washington Post Article or Hennelly’s
statement that the Island Packet overlooked this article were false. Even if McGlothlin
did allege the falsity of the Washington Post Article, Hennelly could not be held liable for
reposting an article that was not even published by him but by a newspaper. Thus, the
court finds that McGlothlin may not base his defamation claims on the May 12 Facebook
Post.
The court next considers the May 23 Facebook Post. McGlothlin alleges that
Hennelly published the following false and defamatory statements about him on
Facebook: (1) McGlothlin is a “Crony Capitalist” and a “crook” (appears in both the
Island Packet Comment and the May 23 Facebook Post); (2) McGlothlin gave the corrupt
Governor McDonald of Virginia[‘s] wife a “no show” job (appears in both the Island
Packet Comment and the May 23 Facebook Post); (3) McGlothlin is a “crooked owner”
seeking a government handout (appears only in the May 23 Facebook Post); and (4) that
McGlothlin, as an owner/operator of United, engaged in documented corruption, relating
to a highly-publicized scandal involving the Governor of Virginia and his wife (appears
in both the Island Packet Comment and the May 23 Facebook Post). ECF No. 1 ¶ 14.
Turning to the Island Packet Comment, the Island Packet Article itself discusses
how McGlothlin built many golf courses over the last thirty years and references the
efforts of McGlothlin’s company to redevelop Hilton Head National Golf Club. In the
comment section below the web version of the Island Packet Article, Hennelly wrote that
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“McGlothlin gave the corrupt Governor McDonald of Virginia[’s] wife a ‘no show’ job”
and refers to McGlothlin and others as “crony capitalists.” ECF No. 1-2. McGlothlin
does not specifically allege in his complaint that any of these statements in the Island
Packet Comment are false and defamatory. Rather, the only statements that he explicitly
claims to be false and defamatory are those “made and published on Facebook,” which
are enumerated in the preceding paragraph.4 ECF No. 1 ¶ 14. However, because most of
these statements in the May 23 Facebook Post—which McGlothlin has explicitly
identified as false and defamatory in paragraph 14 of his complaint—also appear in the
Island Packet Comment, the court will construe the complaint as alleging that these
statements in the Island Packet Comment are false and defamatory as well. Thus, the
court finds that McGlothlin has sufficiently alleged that Hennelly made four false and
defamatory statements.
Second, the complaint sufficiently alleges that Hennelly’s statements constitutes
an unprivileged publication to a third party. ECF No. 1 ¶ 18.
Third, the complaint sufficiently alleges that Hennelly is at fault for “publishing”
these statements. Id. ¶ 20.
Finally, the court must consider whether McGlothlin has sufficiently alleged that
Hennelly’s Island Packet Comment and May 23 Facebook Post caused him special harm,
4
Under the sections of the complaint listing his causes of action, McGlothlin
alleges generally that Hennelly’s “statements about [McGlothlin] were false and
defamatory.” The court finds that these vague conclusions fail to specify which of the
statements within the various online posts are alleged by McGlothlin to be false. Surely
he does not presume that the court will construe every sentence in the online posts as
false—for example, that “Chairman Paul Summerville did an excellent job” or that
“Beaufort County and Bluffton residents; you rock.” The only place that McGlothlin has
provided guidance regarding which statements he contends to be both false and
defamatory is in paragraph 14 of the complaint. As such, the court construes those as the
only allegedly false and defamatory statements that are at play here.
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or that the statements are actionable per se, regardless of special harm. South Carolina
courts have found that “essentially, all libel is actionable per se.” Holtzscheiter II, at 502.
Thus, as Hennelly’s allegedly defamatory statements were written libel, and are therefore
actionable per se, the court finds that McGlothlin has sufficiently pleaded the final factor
of South Carolina’s defamation cause of action. If the court were to stop at this point, it
would deny the motion to dismiss and find that McGlothlin need not plead special
damages. Yet the court must first consider what limitations the First Amendment’s right
to free speech places on the reach of McGlothlin’s defamation suit against Hennelly.
B. First Amendment Limitations on Defamation Claims
Although a plaintiff might be able to prove all of the elements of South Carolina
common law defamation, his claims might still be circumscribed by the First Amendment
protections of free speech. The court first analyzes McGlothlin’s claims under the
framework established by the Supreme Court for suits brought by both public and private
figures against defendants who have made opinion statements on matters of public
concern. Next, the court considers whether any of Hennelly’s allegedly defamatory
statements are inactionable due to their rhetorical nature or because they are, as Hennelly
argues, opinions based on disclosed facts.
i. Public-versus-Private Figure Plaintiffs on Matters of Public Concern
In 1964, the Supreme Court found that, in order for a public official to recover
damages for a defamatory and false statement related to his official conduct, he must
prove that the statement was made with actual malice. New York Times Co. v. Sullivan,
376 U.S. 254, 279 (1964). The Court defined actual malice as knowledge or reckless
disregard towards the falsity of the statement. Id. The Court has spent several decades
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articulating the reach of the New York Times standard. The Court first extended the New
York Times standard to cases involving defamation of “public figures,” in addition to
public officials. Curtis Publishing Co. v. Butts, 388 U.S. 130 (1967). Next, the court
considered whether the New York Times test should apply to suits brought by private
persons regarding defamatory statements on matters of public interest. See Rosenbloom
v. Metrodedia, Inc., 403 U.S. 29 (1971), Gertz v. Robert Welch, Inc., 418 U.S. 323
(1974), Milkovich v. Lorain Journal Co., 497 U.S. 1 (1990). The Court summarized this
progress on the interplay between defamation suits and the First Amendment in
Milkovich, focusing on the need to protect people’s freedom to share opinions on matters
of public interest:
Next, the Bresler–Letter Carriers–Falwell line of cases provides
protection for statements that cannot “reasonably [be] interpreted as
stating actual facts” about an individual. [ ] This provides assurance that
public debate will not suffer for lack of “imaginative expression” or the
“rhetorical hyperbole” which has traditionally added much to the
discourse of our Nation. [ ] The New York Times–Butts–Gertz culpability
requirements further ensure that debate on public issues remains
“uninhibited, robust, and wide-open.” [ ] Thus, where a statement of
“opinion” on a matter [ ]of public concern reasonably implies false and
defamatory facts regarding public figures or officials, those individuals
must show that such statements were made with knowledge of their false
implications or with reckless disregard of their truth. Similarly, where
such a statement involves a private figure on a matter of public concern, a
plaintiff must show that the false connotations were made with some level
of fault [ ]as required by Gertz.
Milkovich, 497 U.S. at 20–21 (emphasis added). These standards apply equally to cases
involving statements made by private individuals as they do to cases involving media
defendants. Snyder v. Phelps, 580 F.3d 206, 220 (4th Cir. 2009), aff’d, 562 U.S. 443
(2011). According to the Fourth Circuit in Snyder:
Neither the Supreme Court nor this Court has specifically addressed the
question of whether the constitutional protections afforded to statements
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not provably false should apply with equal force to both media and
nonmedia defendants. See Milkovich, 497 U.S. at 20 n. 6, 110 S.Ct. 2695.
The Second and Eighth Circuits, however, have rejected any
media/nonmedia distinction. See Flamm v. Am. Ass’n of Univ.
Women, 201 F.3d 144, 149 (2d Cir. 2000); In re IBP Confidential Bus.
Documents Litig., 797 F.2d 632, 642 (8th Cir. 1986); see also Foretich v.
Capital Cities/ABC, Inc., 37 F.3d 1541, 1563 n. 39 (4th Cir. 1994)
(implying in dicta that Milkovich applies equally to media and nonmedia
defendants). Like those two circuits, we believe that the First Amendment
protects nonmedia speech on matters of public concern that does not
contain provably false factual assertions. Any effort to justify a
media/nonmedia distinction rests on unstable ground, given the difficulty
of defining with precision who belongs to the “media.” And, more
importantly, the Supreme Court has concluded that the “inherent worth of
speech ... does not depend upon the identity of its source, whether
corporation, association, union, or individual.” First Nat’l Bank of Boston
v. Bellotti, 435 U.S. 765, 777 [ ] (1978). Thus, for our purposes, the status
of the Defendants as media or nonmedia is immaterial.
Snyder, 580 F.3d at 220 n.13.
Thus, in suits regarding an opinion statement made about a public figure or public
official on a matter of public concern, the plaintiff must show that the statements were
false and must prove that the defendant acted with actual malice. In these types of
actions, the traditional common law presumption of damages for libel is replaced by the
more difficult standard of proving that the author knew his opinion statement was false or
recklessly disregarded its false implications. By “opinion,” the court refers to statements
that fail to contain a “provably false factual connotation.” Snyder, 580 F.3d at 220 (citing
Milkovich, 497 U.S. at 20). “Speech involves a matter of public concern when it
involves an issue of social, political, or other interest to a community.” Kirby v. City of
Elizabeth City, N.C., 388 F.3d 440, 446 (4th Cir. 2004). “Whether . . . speech addresses
a matter of public concern must be determined by [the expression’s] content, form, and
context . . . as revealed by the whole record.” Dun & Bradstreet, Inc. v. Greenmoss
Builders, Inc., 472 U.S. 749, 761 (1985).
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By contrast, if the opinion is about a private figure and on a matter of public
concern, the plaintiff must show that the statements were false and were made with
“some level of fault” under Gertz, rather than that they were made with malice.
Milkovich, 429 U.S. at 21. In Gertz, the Court found that the “accommodation of the
competing values at stake in defamation suits by private individuals allows the States to
impose liability on the publisher [ ] of defamatory falsehood on a less demanding
showing than that required by New York Times.” Gertz, 418 U.S. at 348 (emphasis
added). The Court acknowledged that “under the traditional rule pertaining to actions for
libel, the existence of injury is presumed from the fact of publication” and that “juries
may award substantial sums as compensation for supposed damage to reputation without
any proof that such harm actually occurred.” Id. at 349. Yet the Court pivoted from this
traditional rule in establishing that a private plaintiff suing about opinion statements made
on a matter of public concern is not entitled to a presumption of damages but must prove
actual damages in order to recover from the defendant. Id. at 350 (“[T]he private
defamation plaintiff who establishes liability under a less demanding standard than that
stated by New York Times may recover only such damages as are sufficient to
compensate him for actual injury.”); see also Floyd v. WBTW, 2007 WL 4458924 at * 3
(D.S.C. Dec. 17, 2007) (requiring a private figure plaintiff “to plead and prove common
law malice, demonstrate the falsity of the statements, and show actual injury in the form
of general or special damages”) (citing Erickson, 368 S.C. at 475–76). The private-figure
plaintiff bringing a defamation suit for opinion statements made on a matter of public
concern need only prove actual malice if he seeks punitive damages. Id. (“[T]he strong
and legitimate state interest in compensating private individuals for injury to reputation
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. . . extends no further than compensation for actual injury . . . States may not permit
recovery of presumed or punitive damages [absent] a showing of knowledge of falsity or
reckless disregard for the truth.”).
Because the court finds below in section III.B.ii that several of Hennelly’s
allegedly defamatory statements are inactionable as rhetorical hyperbole, the court
focuses its analysis in this section on the remaining statements. The two remaining
defamatory statements are that McGlothlin gave the corrupt Governor McDonald of
Virginia’s wife a “no show” job, and that McGlothlin, as an owner/operator of United,
engaged in documented corruption relating to a highly publicized scandal involving the
Governor of Virginia and his wife. The court finds that Hennelly’s contention that
McGlothlin gave the governor’s wife a “no show” job is not so much a statement of fact
as it is a personal opinion deriving from his statement that McGlothlin engaged in
documented corruption relating to the scandal that surrounded the Governor of Virginia.
However, as this statement reads more as an actionable opinion than an inactionable
rhetorical hyperbole, the court considers it in conjunction with Hennelly’s statement
regarding McGlothlin’s involvement in documented corruption with the Governor.
Applying the New York Times / Milkovich / Gertz standard, the court views these
statements as opinions related to matters of local public concern, specifically because
they were made (1) in a comment to an online article regarding McGlothlin’s business
and his attempts to rezone Hilton Head National and (2) in a Facebook post issued the
day after the Beaufort County Council denied the Rezoning Application, in which
Hennelly summarizes his thoughts on the rezoning effort and on the people involved.
The Rezoning Application was publicly known and was voted on by the Council after
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public meetings with members of the community who were given the opportunity to
voice their concerns. Clearly, one of Hennelly’s concerns was that the man behind the
company reportedly had some ethical shortcomings, which could reasonably affect the
public’s view of the Rezoning Application.
The court must next determine whether the plaintiff is a public figure or a private
figure. If the court finds that McGlothlin is public figure, or even a limited-purpose
public figure, then McGlothlin must prove that Hennelly posted all of these statements
with actual malice—with knowledge that the statements were false or with reckless
disregard to their falsity. The Fourth Circuit has offered the following test to help courts
determine whether a plaintiff is a limited-purpose public figure:
(1) the plaintiff had access to channels of effective communication; (2)
the plaintiff voluntarily assumed a role of special prominence in a public
controversy; (3) the plaintiff sought to influence the resolution or outcome
of the controversy; (4) the controversy existed prior to the publication of
the defamatory statements; and (5) the plaintiff retained public figure
status at the time of the alleged defamation.
Fitzgerald v. Penthouse Int’l, Ltd., 691 F.2d 666, 668 (4th Cir. 1982). Given that this
question is before the court upon a motion to dismiss, constraining the court to consider
only the facts alleged in the complaint or contained within the documents attached to the
complaint or referenced therein, the court needs more facts outside of those alleged in
these documents to determine with proper certainty whether McGlothlin is a public
figure. This is a question more appropriate for a summary judgment motion after
discovery has been conducted.
Even presuming that the court finds McGothlin to be a private figure plaintiff,
because these allegedly defamatory statements involve a matter of public concern,
McGlothlin is foreclosed by Gertz from obtaining any relief beyond actual damages
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unless he proves that Hennelly acted with actual malice regarding the falsity of the
statements. The court suspects that a jury would likely find that Hennelly did not act
with actual malice in regards to these statements. On the contrary, the Washington Post
Article could easily allow a jury to determine that Hennelly reasonably believed that his
statements were true. However, McGlothlin has alleged that Hennelly “engaged in [ ]
defamatory conduct as to [McGlothlin], intentionally making and publishing false
statements concerning [McGlothlin], with the intent to harm his reputation, or
alternatively, making and publishing such statements with reckless disregard for the truth
. . . so as to lower [his] reputation in [ ] the community.” ECF No. 1 ¶ 11. Thus, the
court finds that he has sufficiently alleged actual malice for purposes of surviving a
motion to dismiss.
The other important result of this First Amendment analysis is that, if McGlothlin
were found to be a private plaintiff, he must prove that the statements are false and that
he suffered harm in order to collect actual damages. Ordinarily under South Carolina
defamation law, the fact that the statements are libel would qualify them as actionable per
se, which removes the requirement that that the plaintiff prove that he suffered general
damages. However, the Gertz / Milkovich First Amendment standard reasserts this
requirement that McGlothlin prove his actual damages, despite South Carolina common
law not requiring this for actionable per se defamatory statements. McGlothlin’s
complaint alleges that Hennelly’s statements have injured his business and his reputation
in the community, that he has suffered “injured feelings, mental suffering and anguish,
and personal and public humiliation,” and finally that he has “suffered damages,
including but not limited to, lost opportunities, diminished sales and trade relations, and
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harm to his goodwill associated with his ongoing business and reputation in the
community.” ECF No. 1 ¶¶ 22, 23, 34, and 35. The court again finds these allegations
sufficient to survive a motion to dismiss, given that the specific details supporting these
alleged harms might be produced during discovery.
In conclusion, the court is unable to dismiss McGlothlin’s entire complaint at this
stage of the litigation based on the above First Amendment framework. The court will
revisit this question should the parties choose to bring a motion for summary judgment.
ii. Rhetorical Hyperbole
The court next considers whether some of Hennelly’s allegedly defamatory
statements are inactionable due to their rhetorical and hyperbolic nature. Gertz,
Milkovich, and subsequent Fourth Circuit case law has carved out greater protections for
“statements that cannot reasonably be interpreted as stating actual facts about an
individual.” Milkovich, 497 U.S. at 20. In Milkovich, the Supreme Court made clear
that Gertz was not “intended to create a wholesale defamation exemption for anything
that might be labeled ‘opinion.’” Id. at 18. However, the Court did make clear that it
wished to provide “assurance that public debate will not suffer for lack of ‘imaginative
expression’ or the ‘rhetorical hyperbole’ which has traditionally added much to the
discourse of our Nation.” Id. at 20. As the Fourth Circuit reiterated, “[t]he general tenor
of rhetorical speech, as well as the use of ‘loose, figurative, or hyperbolic language’
sufficiently negates any impression that the speaker is asserting actual facts.” Snyder,
580 F.3d at 220 (citing Milkovich, 497 U.S. at 21); see also CACI Premier Tech., Inc. v.
Rhodes, 536 F.3d 280, 300 (4th Cir. 2008) (finding that defendant’s statements that
plaintiffs were “mercenaries” and “killers” and that those involved could “do any damn
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thing you want to, including torture people” was a clear use of hyperbole and
exaggeration, and were thus not actionable); Agora, Inc. v. Axxess, Inc., 90 F. Supp. 2d
697, 702 (D. Md. 2000), aff’d, 11 F. App’x 99 (4th Cir. 2001) (finding that statements
that the plaintiff does not engage in “real” reporting, but rather conducts only “pseudo
research” and “mere puffery” was not capable of a defamatory meaning because they
“cannot reasonably be interpreted as stating actual fact”). Courts must assess “as a matter
of law whether speech contains rhetorical hyperbole protected by the First Amendment.”
Id.
The court finds that Hennelly’s statements that McGlothlin is a “crony capitalist,”
a “crook,” and a “crooked owner” are all rhetorical hyperbole. They are not capable of
being proven false or even properly defined. And the “general tenor” of these statements
in the context of a Facebook post and a long, emotive comment on a newspaper article
“negates any impression that the speaker is asserting actual facts” in regards to these
particular statements. The court concludes that these rhetorical statements in the Island
Packet Comment and May 23 Facebook Post warrant First Amendment protection and
that McGlothlin may not base his claims on these statements going forward. The only
remaining statements upon which McGlothlin may continue his defamation suit,
therefore, are Hennelly’s statement that McGlothlin “as owner / operator of United,
engaged in documented corruption, relating to a highly-publicized scandal involving the
Governor of Virginia and his wife” and his related statement that McGlothlin “gave the
corrupt Governor McDonald of Virginia[‘s] [sic] wife a ‘no show’ job.” ECF No. 1 ¶ 14.
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iii. Opinions Based on Disclosed Facts
Hennelly asks the court to view his use of the phrase “documented corruption”
and “no show job” as his “reasonable interpretation of widely report facts” and thus “not
actionable.” ECF No. 29 at 11. However, all of the law that Hennelly cites for the “wellestablished” proposition that “opinions based on disclosed facts are protected” involve
situations where the defamatory statement is made in conjunction with the disclosed
facts. Id. (quoting Agora, 90 F.Supp. at 704). In Agora, the publisher of the defamatory
statements disclosed the facts upon which this opinion was based on the very same
website where the defamatory opinion statements were made. Agora, 90 F.Supp. at 704.
Hennelly also cites Biospherics Inc. v. Forbes, Inc., 151 F.3d 180 (4th Cir. 1998), which
involved an article about the Biospherics company and about the misplaced “[h]ype and
hope” regarding this company. Biospherics, Inc., 151 F.3d at 184. The article also said
that that “[i]nvestors will sour on Biospherics when they realize that [the product] isn’t up
to the company’s claims” and that “its stock is worth $2.” Id. The Fourth Circuit found
that these statements were protected by the First Amendment because the article also
reported its factual bases for these statements—that the cost of Biopsherics’ sweetener
would be five times more costly than sugar and that other companies were working on
cheaper sweeteners. Id. The court found the allegedly defamatory statements to merely
be the author’s interpretation of the facts that the author disclosed, and Biospherics did
not contest the truth of these underlying facts. Id. In Chapin v. Knight-Ridder,Inc., 933
F.2d 1087 (4th Cir. 1993), another case cited by Hennelly, the court considered whether
an article’s allegation that a charity engaged in “hefty mark-ups” constituted actionable
defamation. The court found that “‘[h]efty’ is the author’s opinion of the mark-up based
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on his estimate that the wholesale cost of the items in the Gift Pac was under $8” and that
“[b]ecause the bases for the ‘hefty mark-up’ conclusion are fully disclosed, no reasonable
reader would consider the term anything but the opinion of the author drawn from the
circumstances related.” Chapin, 933 F.2d at 1093; see also Standing Comm. v. Yagman,
55 F.3d 1430, 1438–42 (9th Cir. 1995) (“[W]here a publication sets forth the facts
underlying its statement of opinion . . . and those facts are true, the Constitution protects
that opinion from liability for defamation.”) (emphasis added).
In contrast to these cases, Henelly’s statements in the Island Packet Comment and
the May 23 Facebook Post were not made in conjunction with the facts which Hennelly
now claims formed the bases for his opinions. The court recognizes that his statements
regarding McGlothlin’s engagement in documented corruption with the Governor of
Virginia and giving the Governor’s wife a “no show” job could reasonably be viewed as
his interpretation of the facts laid out in the Washington Post Article. However, these
statements were not made in conjunction with the facts from the Washington Post Article.
If Hennelly had made these statements alongside his May 12 Facebook Post, which
included the Washington Post Article, then they would not have been actionable. In that
case, the Washington Post Article would have provided all of the facts upon which these
two comments were made, and the reader could easily have interpreted them as
Hennelly’s interpretation of this article. However, the Island Packet Comment is not at
all connected to the Washington Post Article, and the Island Packet Article itself does not
sufficiently provide the factual basis for Hennelly’s comments. The court considered
whether Hennelly’s May 23 Facebook Post was sufficiently close in time and proximity
to the May 12 Facebook Post which included Washington Post Article, in a way that
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would allow the reader to rely on the facts in the Washington Post Article when reading
Hennelly’s May 23 Facebook Post. The court was not provided with any evidence that
the two Facebook posts were adjacent to one another to allow such a reading. More
importantly, as discussed above, when courts have found that a statement is an
inactionable opinion based on disclosed facts, those “facts” were actually disclosed
within the same statement—they were written in the same article or existed within the
confines of the allegedly defamatory statement. Here, by contrast, the facts in the
Washington Post Article were not “disclosed” in the May 23 Facebook Post. The
disclosure of the Washington Post Article occurred in a separate Facebook post from
Hennelly’s statements in the May 23 Facebook Post. Thus, a reader could have viewed
Hennelly’s May 23 Facebook Post with the allegedly defamatory statements without the
benefit of seeing the Washington Post Article, and thus without being able to view
Hennelly’s statements as mere interpretations of the facts in the Washington Post Article.
The Island Packet Comment and the May 23 Facebook Post did not disclose the
facts upon which they were based, and “an unsupported statement of opinion that implies
defamatory facts can be actionable.” Moldea v. New York Times Co., 15 F.3d 1137,
1144 (D.C. Cir.), modified, 22 F.3d 310 (D.C. Cir. 1994). Thus, the court declines to
dismiss the complaint on the grounds that Hennelly’s statements were mere
interpretations of disclosed facts.
C. Negligence Claim
In addition to his defamation causes of action, McGlothlin alleges the same facts
and issues in the form of a negligence claim for his third cause of action. “A claim that a
statement constitutes libel or slander must be brought in a defamation cause of action,
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which is grounded in and affected by both common and constitutional law.” Erickson v.
Jones St. Publishers, LLC, 629 S.E.2d 653, 673–74 (S.C. 2006) (affirming the lower
court’s dismissal of the plaintiff’s negligence cause of action). Thus, the court dismisses
McGlothlin’s negligence cause of action.
IV. CONCLUSION
Based on the foregoing reasons, the court GRANTS IN PART and DENIES IN
PART the motion to dismiss.
AND IT IS SO ORDERED.
DAVID C. NORTON
UNITED STATES DISTRICT JUDGE
March 1, 2019
Charleston, South Carolina
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