McGlothlin v. Hennelly

• Decision Date: 01 March 2019
• Docket Number: No. 9:18-cv-00246,9:18-cv-00246
• Citation: 370 F.Supp.3d 603
• Parties: James W. MCGLOTHLIN, Plaintiff, v. Kevin N. HENNELLY, Defendant.
• Court: U.S. District Court — District of South Carolina

370 F.Supp.3d 603

James W. MCGLOTHLIN, Plaintiff,

v.Kevin N. HENNELLY, Defendant.

No. 9:18-cv-00246

United States District Court, D. South Carolina, Beaufort Division.

Signed March 1, 2019

Brent Brigham Young, Baker Donelson Bearman Caldwell and Berkowitz, Johnson City, TN, Richard Andrew Hutchinson, Pro Hac Vice, Baler Donelson Bearman Caldwell and Berkowitz PC, Johnson City, TX, for Plaintiff.

H. Jefferson Powell, Pro Hac Vice, Nicole Jean Ligon, Pro Hac Vice, The First Amendment Clinic at Duke Law School, Durham, NC, Robert H. Jordan, Parker Poe Adams and Bernstein, Charleston, SC, Robert Crum Osborne, III, Bruner Powell Wall and Mullins LLC, Columbia, SC, for Defendant.

ORDER

DAVID C. NORTON, UNITED STATES DISTRICT JUDGE

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. 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. 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 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. "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, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009) (quoting Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 570, 127 S.Ct. 1955, 167 L.Ed.2d 929 (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, 376 S.C. 308, 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 harm." Kunst v. Loree, 424 S.C. 24, 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., 312 S.C. 511, 435 S.E.2d 864, 867 (1993). "The publication of a statement is defamatory if it tends to harm the reputation of another as to lower...