370 F. Supp. 3d 603
D.S.C.2019Background
- Plaintiff James McGlothlin is a founding member of The United Company (owner of Hilton Head National) and sued defendant Kevin Hennelly for online posts (Facebook and Island Packet comment) alleging corruption tied to a Virginia gubernatorial scandal.
- Relevant online statements included calling McGlothlin a "crony capitalist/crook," alleging he gave the governor's wife a "no‑show" job, and asserting "documented corruption."
- McGlothlin originally sued in Florida; that suit was dismissed for lack of personal jurisdiction and voluntarily dismissed by plaintiff; he refiled in the District of South Carolina seeking damages and injunctive relief.
- Hennelly moved to dismiss under Rule 12(b)(6); the court evaluated South Carolina defamation elements and First Amendment limits (public vs. private figure, rhetorical hyperbole, opinions based on disclosed facts).
- Court dismissed negligence claim (defamation covers such harms) but denied dismissal of core defamation claims except for statements deemed rhetorical hyperbole (e.g., "crony capitalist/crook").
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether complaint pleads South Carolina defamation elements | McGlothlin: Hennelly published false defamatory statements injuring reputation and business | Hennelly: Statements are opinion/hyperbole or republication of a Washington Post article; not actionable | Court: Complaint sufficiently alleges defamation for specific statements (excluding the May 12 repost) to survive 12(b)(6) |
| First Amendment — public concern / public-figure standard | McGlothlin: Statements are false and defamatory; alleges actual malice | Hennelly: Statements concern public matters and are opinions; require heightened fault (actual malice if public figure) | Court: Statements address a matter of public concern; whether McGlothlin is a public or limited‑purpose public figure requires more facts, but plaintiff pleaded actual malice sufficiently for dismissal stage |
| Rhetorical hyperbole vs. actionable fact | McGlothlin: All statements are defamatory and actionable per se | Hennelly: Terms like "crook" and "crony capitalist" are rhetorical hyperbole and nonactionable opinion | Court: Phrases like "crony capitalist/crook/crooked owner" are nonactionable rhetorical hyperbole and dismissed; factual‑implicative statements remain viable |
| Opinion based on disclosed facts / republication defense | McGlothlin: Statements stood alone and were defamatory | Hennelly: His comments were interpretation of the Washington Post article and thus protected opinion based on disclosed facts | Court: May 12 post (linking WP article) cannot support defamation claim; but the May 23 comment and Island Packet comment did not disclose the underlying facts and therefore are not protected as opinion based on disclosed facts |
| Negligence claim distinct from defamation | McGlothlin: Also pleads negligence/gross negligence/recklessness | Hennelly: Such claims are duplicative of defamation | Court: Negligence claim dismissed as improper vehicle for statements of libel/slander |
Key Cases Cited
- New York Times Co. v. Sullivan, 376 U.S. 254 (established actual malice standard for public officials)
- Gertz v. Robert Welch, Inc., 418 U.S. 323 (private‑figure plaintiffs suing on matters of public concern must show some fault and prove actual damages; actual malice required for punitive damages)
- Milkovich v. Lorain Journal Co., 497 U.S. 1 (opinion that implies provably false facts can be actionable; protects rhetorical hyperbole)
- Snyder v. Phelps, 562 U.S. 443 (First Amendment protects speech on matters of public concern, including by nonmedia defendants)