North Myrtle Beach company, already fined $20K, can be cited daily as lawsuit progresses

North Myrtle Beach can continue issuing daily fines to a family-owned business that sets up rental equipment on the sand until a federal complaint challenging a city law is settled, a judge ruled last week.

Cherry Grove Beach Gear sued the city in July, taking aim at its decade-old policy barring private companies from doing commerce on the beach without a franchise agreement.

The company had twice requested such a privilege and been denied, prompting owner Derek Calhoun to sue for violation of federal antitrust laws as Cherry Grove continued to set up equipment on the beach.

That’s led to $20,000 in fines since June. On July 13, company lawyers asked a judge to temporarily stop allowing the city to write tickets as the case remained ongoing.

Calhoun could not immediately be reached for comment, but the company noted the fines on its Facebook page.

“Plaintiffs are informed and believe that they will sustain irreparable economic injuries and damages and loss of the goodwill of their business without this Court’s entry of a preliminary junctions,” attorneys wrote.

On Friday. U.S. District Judge R. Bryan Harwell ruled against the business.

“While Plaintiffs cannot deliver or set up equipment on the beach without running afoul of the ordinances, they can still continue operating their rental business — just like multiple other vendors in the area do,” he wrote.

North Myrtle Beach has restricted private commerce on its sands since 1990, when the council first required vendors to get a franchise agreement. The rules have been tweaked several times since, most recently in 2010 when authorized hours, placement and size of shading devices and removal of equipment was written into the law.

Cherry Grove’s lawsuit alleges North Myrtle Beach has knowingly misled statements online and at meetings that amount to defamation and slander, but does not give examples in the complaint.

Harwell in his ruling said “reducing a commercial merchant presence on the strand clearly outweighs Plaintiffs’ interest in having an optional delivery/set-up feature of their rental equipment.”

City spokesman Donald Graham told The Sun News on Sept. 6 that officials were “pleased” with Harwell’s decision.

“We hope Cherry Grove Beach Gear will comply with the law like other beach gear companies in our community have been doing for years,” he said.

This story was originally published September 7, 2022 at 5:00 AM.