Federal judge denies request to stop enforcement of North Myrtle Beach beach wares ordinances

Cherry Grove Beach Gear
Cherry Grove Beach Gear(gray)
Published: Sep. 7, 2022 at 2:11 PM EDT|Updated: Sep. 7, 2022 at 2:14 PM EDT
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NORTH MYRTLE BEACH, S.C. (WMBF) – A beach equipment rental company that is in a legal battle with the city of North Myrtle Beach was dealt a blow in its federal lawsuit.

A federal judge denied Cherry Grove Beach Gear’s motion for a preliminary injunction that would keep the city of North Myrtle Beach from enforcing two ordinances and allow the company to continue offering its beach set-up services.

The beach wares rental company and the city have been at odds with each other all summer.

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Cherry Grove Beach Gear is a company that provides umbrellas, chairs, coolers and other items for visitors looking to spend a day at the beach. The company also offers to deliver the beach gear and set it up for an additional cost.

But that’s where the issue lies.

According to two North Myrtle Beach city ordinances, only the city or a franchised business can set up items on the beach for a profit. The city of North Myrtle Beach and Cherry Grove Beach Gear does not have a franchise agreement.

During a special called meeting on June 29, the city of North Myrtle Beach amended an ordinance about placing obstructions on the beach, which stated, “regardless of the hours set forth herein and except for municipal beach service equipment or equipment authorized by franchise agreement, no person or company who for a fee or service as part of, or incidental to, its business operations for the sale, rental lease, use or delivery of Beach Wares shall deliver to, place upon, set upon or leave upon the public beach any Beach Wares.”

Once that amended ordinance was passed, Cherry Grove Beach Gear started receiving citations for setting up beach wares within the city limits. According to a recent Facebook post on Sept. 4, the company has racked up $20,000 in fines. According to a statement from Cherry Grove Beach Gear, the business will continue to honor the contracts that it has in place with customers through the end of the season regardless of the citations the business receives.

FEDERAL LAWSUIT FILED

On July 11, Cherry Grove Beach Gear filed a federal lawsuit against the city of North Myrtle Beach, stating that the city is violating anti-trust laws by essentially monopolizing the beach.

“Plaintiffs are informed and believe that City, by and through its Council and officials, have unlawfully sought to impose an unlawful monopoly on the rentals of beach chairs, beach umbrellas and related beach wares on the entirety of the beaches that are located within the jurisdictional limits of the City of North Myrtle Beach,” the lawsuit states.

The city of North Myrtle Beach has a Beach Services Division that owns and maintains the beach chairs and umbrellas that are rented out through about 50 rental stations along the nine miles of beach.

The federal lawsuit states the city makes up to $3 million a year on beach ware rentals.

But the city of North Myrtle Beach argued in court documents that the revenue pays for lifeguard services and helps with the costs of safety-related functions of beach patrol and beach cleaning.

The city also added that their beach rental attendants are trained for proper installation and “do not set up equipment in emergency lanes or in the line of sight of the lifeguards, and remain on the beach to monitor wind and storm conditions so they can remove the umbrellas and chairs in the event of bad conditions.”

The lawsuit also accuses the city of North Myrtle Beach of defamation and states that the city’s actions have severely and economically damaged Cherry Grove Beach Gear’s business.

“As a result of Defendant’s action, a portion of Plaintiff’s Real Property remains economically unusable, unusable for an activity that is otherwise specifically allowed under Defendant’s ordinances,” the lawsuit state.

FEDERAL JUDGE’S RULING

A hearing was held on Aug. 31 on the motion for a preliminary injunction.

Then on Sept. 2, the federal judge denied the motion, stating that Cherry Grove Beach Gear failed to reach the burden of several factors.

The court documents stated that Cherry Grove Beach Gear provided insufficient evidence showing that the enforcement of the ordinances would hurt its bottom line.

“Plaintiffs can continue renting beach equipment even though they will not be able to provide delivery and set up on the beach,” court documents state.

It was also noted at the Aug. 31 hearing that the city’s attorney noted that there are three other companies that rent out beach equipment in the area and remain in business even though they don’t set up equipment on the beach.

The federal judge also stated in the documents that the city has a valid exercise of its “sovereign powers” because the funds from the beach equipment rentals help to pay for safety functions such as lifeguards and beach clean-up.

As for the defamation allegations, the judge ruled that while Cherry Grove Beach Gear claims “they have been defamed by citations for violations of city ordinances,” the court noted that the company has also published those citations on social media.

WMBF News reached out to the city of North Myrtle Beach for a comment on the judge’s ruling and the city stated, “We are pleased with the Court’s decision in favor of the City, and we hope Cherry Grove Beach Gear will comply with the law like other beach gear companies in our community have been doing for years.”

As for Cherry Grove Beach Gear, the owner, Derek Calhoun, said that they are working on an expansion called Cherry Grove Beach Services.

“Our vision is to create a concierge service that visitors would usually only expect at high class resorts,” Calhoun said.

He said the vision is to work with smaller businesses and form a partnership to include E-Bikes, beach lunches, evening family meals that are catered and even yoga.