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Civil Conspiracy Claims in South Carolina After Abolishing the Todd Rule
The South Carolina Supreme Court has done away with the so-called Todd rule.
This comes from the court’s 2021 decision in Paradis v Charleston County School District (find the opinion here), in which Leisel Paradis asserted a civil conspiracy claim against Robert Bohnstengel and Stephanie Spann, the principal and assistant principal, respectively, of James Island Charter High School. The circuit court dismissed the claim because, among other things, it found that Paradis did not plead special damages; the SC Court of Appeals affirmed.
On appeal, the Supreme Court of South Carolina granted a writ of certiorari on one issue: whether to abolish the requirement of pleading special damages for civil conspiracy claims.
This requirement of pleading special damages to advance a civil conspiracy claim in South Carolina has been informally referred to as the “Todd rule” for decades. It comes not from statute but from legal precedent and is named after the 1981 SC Supreme Court case Todd v South Carolina Farm Bureau Mutual Insurance Co.
In this blog we’re going to look at what civil conspiracy is, what led to the Todd rule in the first place, what made the SC Supreme Court decide to overturn it, and what that means for civil conspiracy claims in South Carolina going forward.
What is Civil Conspiracy? Elements of a Civil Conspiracy Claim
First, let’s look at what civil conspiracy is. In the Paradis decision, the court quotes itself from the 1939 case Charles v Texas Co. (aka Charles I): “[A] definition of conspiracy has been given as the conspiring together to do an unlawful act to the detriment of another or the doing of a lawful act in an unlawful way to the detriment of another.”
It also quotes law professor Francis M. Burdick’s 1907 book Conspiracy as a Crime, and as a Tort, for a definition of civil conspiracy that includes its elements: “A combination between two or more persons to accomplish a criminal or unlawful purpose, or some purpose not in itself criminal or unlawful by criminal or unlawful means, subjects the confederates to criminal prosecution; and, if injury ensues to an individual therefrom, it subjects them to a civil action by their victim.”
To summarize, the essential elements of a civil conspiracy claim that the court describes as “fairly universal in contemporary tort law” and are recognized by most states under common law are:
- An agreement between two or more individuals,
- To do an unlawful act or to do a lawful act in an unlawful way,
- Resulting in injury to the plaintiff inflicted by one or more of the conspirators, and
- Pursuant to a common scheme
Point #3 is important. In what’s referred to as Charles II, a lawsuit with the same parties as Charles I three years later in 1942, the SC Supreme Court pointed out that it’s a “well known principle” that resulting damages are the basis of a civil conspiracy claim. An unexecuted conspiracy cannot be the basis for a civil conspiracy action since it does lead to injury of the intended victim. Instead, there must be an “overt act” that results in injury. This distinguishes civil conspiracy from criminal conspiracy, in which the very act of conspiring is a crime in and of itself.
What Led to the Todd Rule in the First Place
Now we come to the Todd rule. In 1981, the Supreme Court of South Carolina issued its decision for Todd v SC Farm Bureau Mutual Insurance Co., which has been interpreted as creating a new element for civil conspiracy claims in SC, the requirement that a plaintiff plead special damages.
In Todd, Petitioner John Wendell Todd alleged five causes of action following from the termination of his employment:
- Intentional interference with contractual relations
- Extreme and outrageous conduct
- Bad faith termination of the employment contract
- Invasion of privacy
- Conspiracy to so damage the plaintiff
The court considered whether #5 was a claim for civil conspiracy. It reaffirmed Charles I, stating that that “conspiracy in and of itself is not a civil wrong”; there can only be a civil conspiracy claim if damage to the plaintiff results. Since the court found that Todd did not plead overt acts in furtherance of the conspiracy, the complaint failed as a matter of law.
It stated: “The only alleged wrongful acts plead are those for which damages have already been sought.” Essentially, the court barred Todd from recovering additional damages for the cause of action #5 because it simply restated the first four causes of action and did not assert any other acts related to the conspiracy that led to injury.
You can’t get damages for the same thing twice, in other words.
But cases after Todd interpreted this to mean that special damages must be pleaded. In Lee v Chesterfield Gen. Hosp., Inc., 1986, the SC Court of Appeals listed the required elements of a civil conspiracy claim as follows:
- A combination of two or more persons,
- for the purpose of injuring the plaintiff,
- which causes him special damage
Oddly enough, the court notes in Paradis, Lee and similar cases that followed including Island Car Wash, Inc. v Norris and Yaeger v Murphy didn’t cite Todd as the basis of this three-part definition that included the special damages requirement, but it still became known as the Todd rule. It would have been more aptly named the Lee rule.
In any event, for the next several decades, it was seen as a requirement to plead special damages to forward a civil conspiracy claim in the state. Actions that did not expressly plead special damages were dismissed.
The Supreme Court’s Ruling in Paradis Abolishing the Todd Rule
In the current case, Paradis argued that the requirement to plead special damages for civil conspiracy was a misreading of the law in the US legal encyclopedia Corpus Juris Secundum and therefore should be abandoned.
The Supreme Court of South Carolina agreed that the Todd rule should be abolished. It found that the relevant section of CJS (Section 33, Conspiracy) is about barring duplicative recoveries, not about establishing a requirement for pleading special damages. It also suggested that in addition to a possible misinterpretation of the Todd decision, the Todd rule could have arisen from differing interpretations of “special damages.”
Todd intended to address the issue of pleading an overt act that resulted in injury, not to require the pleading of special damages, the court says. “As a result, we overrule Todd and cases relying on Todd or other precedent, such as Lee, to the extent they impose or appear to impose a requirement of pleading (and proving) special damages.”
Requirements for a Civil Conspiracy Claim in South Carolina Going Forward
The SC Supreme Court goes on to clarify exactly what a plaintiff asserting a claim for civil conspiracy in South Carolina must establish in light of the Paradis v Charleston County School District decision. The elements are:
- The combination or agreement of two or more persons,
- To commit an unlawful act or a lawful act by unlawful means,
- Together with the commission of an overt act in furtherance of the agreement, and
- Damages proximately resulting to the plaintiff
By overruling Todd, the court says “we are returning not only to our historical roots, but also to the traditional elements of a civil conspiracy claim as they have been similarly defined by the majority of jurisdictions.”
Legal Help in South Carolina
Though the legal history and reasoning behind the Todd rule and why it was overturned may not be of much interest to people outside of the legal profession, the fact is that decisions of the South Carolina Supreme Court and Court of Appeals do have direct and tangible impacts on everyday people and will for years to come. Read more on our blog for recent decisions out of the SC Supreme Court and the Court of Appeals that affect business owners, families, property owners, and other South Carolinians.
For help with estate planning, business matters, and commercial real estate law in South Carolina, contact attorney Gem McDowell at the Gem McDowell Law Group. He and his team can help you plan for the future and avoid problems by looking ahead and staying on top of the latest in SC law. Schedule a free consultation to talk over your matter with Gem by calling the Mt. Pleasant office at 843-284-1021 or filling out this form.