ELECTRONICALLY FILED - 2023 Dec 04 3:16 PM - HORRY - COMMON PLEAS - CASE#2023CP2607406

STATE OF SOUTH CAROLINA ) IN THE COURT OF COMMON PLEAS

) FOR THE FIFTEENTH JUDICIAL CIRCUIT
COUNTY OF HORRY )
CASE NO.:
LAKE AGENCY, SC, LLC )
) SUMMONS
PLAINTIFFS, ) (JURY TRIAL DEMANDED)
)
V. )
)
MYRTLE BEACH AREA CHAMBER OF )
COMMERCE, )
)
DEFENDANTS. )
____________________________________)

TO THE DEFENDANT ABOVE NAMED:

YOU ARE HEREBY SUMMONED and required to answer the Complaint in this action,

a copy of which is herewith served upon you, and to serve a copy of your Answer to the said

Complaint on the Plaintiffs’ attorney, Tucker S. Player, at The Player Law Firm, LLC, 512 Village

Church Drive, Chapin, South Carolina 29036, within thirty (30) days after the service hereof,

exclusive of the date of such service and if you fail to answer the Complaint within the time

aforesaid, Plaintiffs in this action will apply to the Court for the relief demanded in the Complaint.

This 4th day of December, 2023.

PLAYER LAW FIRM, LLC
s/Tucker S. Player; SC Bar No. 16217
512 Village Church Drive
Chapin, SC 29036
(803) 315-6300
[email protected]
Attorney for the Plaintiff

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 ELECTRONICALLY FILED - 2023 Dec 04 3:16 PM - HORRY - COMMON PLEAS - CASE#2023CP2607406
STATE OF SOUTH CAROLINA ) IN THE COURT OF COMMON PLEAS
) FOR THE FIFTEENTH JUDICIAL CIRCUIT
COUNTY OF HORRY )
CASE NO.:
LAKE AGENCY, SC, LLC )
) COMPLAINT
PLAINTIFFS, ) (JURY TRIAL DEMANDED)
)
V. )
)
MYRTLE BEACH AREA CHAMBER OF )
COMMERCE, )
)
DEFENDANTS. )
____________________________________)

NOW COMES Plaintiff, by its undersigned attorney, and submit this Complaint to allege as

follows:

THE PARTIES

1. Lake Agency, SC, LLC is a South Carolina limited liability Company, registered with the

South Carolina Secretary of State, and a member of Defendant Myrtle Beach Area Chamber

of Commerce.

2. Defendant Myrtle Beach Area Chamber of Commerce [hereinafter “MBACC”] is a South

Carolina Non-Profit Corporation based in Myrtle Beach, South Carolina. MBACC is the

designated entity to receive the taxpayer funds related to the Local Option Tourism

Development Fee and the Myrtle Beach Accommodations Tax and is therefore acting under

color of state law.

JURISDICTION AND STANDING

3. All the actions complained of occurred in Horry County. All parties are residents of Horry

County.

4. Jurisdiction and venue are proper before this Court.

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5. Plaintiff is a dues paying member of the Myrtle Beach Area Chamber of Commerce.

6. Plaintiff and Defendant entered into a contract upon the payment of dues. Consideration

was exchanged and mutual obligations attached to each party.

7. Each party was obligated to act with good faith and fair dealing.

8. Defendant was obligated treat Plaintiff like every other dues paying member.

9. Defendant was obligated to refrain from activities that could injure the members or the

entity itself.

THE TDF STATUTE

10. The South Carolina General Assembly enacted to Title IV, Chapter 10, Article 9 of the South

Carolina Code Annotated entitled “Local Option Tourism Development Fee”, which

authorizes counties to adopt an ordinance imposing a Sales and Use Tax for “tourism

advertisement and promotion directed at non-South Carolina residents.”

11. The 1% Sales and Use Tax is collected by the South Carolina Department of Revenue

[SCDOR] and distributed to the City of Myrtle Beach on a quarterly basis.

12. Upon receipt of the tax funds from SCDOR, the City is allowed to withhold up to 20% of the

tax to use as a credit towards property tax bills for citizens and tourism-related capital

projects.

13. Pursuant to S. C. Code § 4-10-970, the remaining funds [hereinafter the “TDF Funds”] “must

be used exclusively for tourism advertisement and promotion directed at non-South Carolina

residents.”

14. The City is required to designate no more than two organizations to receive the revenues and

interest and conduct the promotional activities required under S.C. Code § 4-10-970. Any

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organization appointed must be “nonprofit designated marketing organizations representing

a broad cross-section of tourism interests within the county.”

15. Before an organization may be designated to receive any TDF Funds, it must certify to the

City that:

• its promotional and advertising programs are based on research based outcomes;
• the organization has a proven record of success in creating new and repeat
visitation to the county;
• it has sufficient resources to create, plan, implement, and measure the marketing
program generated by the fee revenues;
• it will use the funds only for the purposes provided pursuant to subsection
(B)(1) of this section.

16. At least quarterly, any organization designated by the City pursuant to S.C. Code § 4-37-970

shall provide a report to the municipality that includes identification of TDF Funds received

during the previous quarter, as well as expenditures made from those funds during the

previous quarter. Each report is required to be posted by the organization on its website.

17. In 2009, Myrtle Beach City Council adopted an ordinance to levy and impose a 1% sales and

use tax pursuant to S.C. Code Ann. § 4-10-970.

18. In 2018, Myrtle Beach City Council unanimously approved the continuation of the 1% sales

and use tax pursuant to S.C. Code Ann. § 4-10-970 without holding a public referendum.

19. Since 2020, the only entity in the State of South Carolina implementing the TDF tax was the

City of Myrtle Beach.

THE ACCOMMODATIONS TAX

20. The South Carolina General Assembly enacted to Title VI, Chapter 4, Article 9 of the South

Carolina Code Annotated entitled “Allocations of Accommodations Tax Revenue.”

21. This statute requires certain allocations of revenue if a governing body receives more than

$50,000.00 in such revenue.

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22. Myrtle Beach receives more than $50,000.00 in Accommodations Tax revenue and are

subject to the allocations specified in S.C. Code § 6-4-10.

23. Pursuant to S.C. Code § 6-4-10, the funds received must be allocated as follows:

a. The first twenty-five thousand dollars must be allocated to the

general fund of the municipality or county and is exempt from all
other requirements of this chapter.
b. Five percent of the balance must be allocated to the general fund of
the municipality or county and is exempt from all other
requirements of this chapter.
c. Thirty percent of the balance must be allocated to a special fund and
used only for advertising and promotion of tourism to develop and
increase tourist attendance through the generation of publicity. To
manage and direct the expenditure of these tourism promotion
funds, the municipality or county shall select one or more
organizations, such as a chamber of commerce, visitor and
convention bureau, or regional tourism commission, which has an
existing, ongoing tourist promotion program. To be eligible for
selection the organization must be organized as a nonprofit
organization and shall demonstrate to the municipality or county
that it has an existing, ongoing tourism promotion program or that it
can develop an effective tourism promotion program. Before the
beginning of each fiscal year, an organization receiving funds from
the accommodations tax from a municipality or county shall submit
for approval a budget of planned expenditures. At the end of each
fiscal year, an organization receiving funds shall render an
accounting of the expenditure to the municipality or county which
distributed them.
d. The remaining balance plus earned interest received by a
municipality or county must be allocated to a special fund and used
for tourism-related expenditures. This section does not prohibit a
municipality or county from using accommodations tax general fund
revenues for tourism-related expenditures.

24. Under the Statute, “Tourism-related expenditures” include:

a. advertising and promotion of tourism so as to develop and increase

tourist attendance through the generation of publicity;
b. promotion of the arts and cultural events;
c. construction, maintenance, and operation of facilities for civic and
cultural activities including construction and maintenance of
access and other nearby roads and utilities for the facilities;
d. the criminal justice system, law enforcement, fire protection, solid
waste collection, and health facilities when required to serve

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tourists and tourist facilities. This is based on the estimated
percentage of costs directly attributed to tourists;
e. public facilities such as restrooms, dressing rooms, parks, and
parking lots;
f. tourist shuttle transportation;
g. control and repair of waterfront erosion, including beach
renourishment;
h. operating visitor information centers.

25. Additionally, the statute provides:

(c) Allocations to the special fund must be spent by the municipality

or county within two years of receipt. However, the time limit may
be extended upon the recommendation of the local governing body
of the county or municipality and approval of the oversight
committee established pursuant to Section 6-4-35. An extension
must include provisions that funds be committed for a specific
project or program.

26. The City designated MBACC as the non-profit DMO to handle all tax revenue allocated to

the special fund under S.C. Code § 6-4-10 [hereinafter “A-Tax Funds”].

MBACC ACTING UNDER COLOR OF STATE LAW

27. As the designated non-profit organization for the TDF Funds and the A-Tax Funds,

MBACC is performing public services under color of state law.

28. By acting as the designated organization to receive taxpayer funds, MBACC was a willful

participant in joint activity with the State or its agents.

29. By procuring marketing and advertising services for the City through the expenditure of

taxpayer money, MBACC was delegated a public function by those subdivisions of the

State.

30. By acting as the designated organization to receive taxpayer funds and procuring marketing

and advertising services for the City through the expenditure of taxpayer money, the

MBACC is inextricably entwined with governmental policies.

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31. By acting under color of state law, MBACC is bound by the statutory and ethical

restrictions governing the entities which delegated those duties and made such designations

under the applicable statutes.

32. South Carolina Code Section 8-13-1346 states:

(A) A person may not use or authorize the use of public funds,
property, or time to influence the outcome of an election.
(B) This section does not prohibit the incidental use of time and
materials for preparation of a newsletter reporting activities of the
body of which a public official is a member.
(C) This section does not prohibit the expenditure of public resources
by a governmental entity to prepare informational materials, conduct
public meetings, or respond to news media or citizens’ inquiries
concerning a ballot measure affecting that governmental entity;
however, a governmental entity may not use public funds, property, or
time in an attempt to influence the outcome of a ballot measure.

33. In 2018, the South Carolina Supreme Court unambiguously held that the money received

by Defendant from both the accommodations tax and the TDF tax is taxpayer money.

“TRANSPARENCY AND ACCOUNTABILITY” REPORTS AND “AUDITS”

34. MBACC provides “Transparency and Accountability” reports on the website of the Myrtle

Beach Area Convention and Visitors Bureau.

35. The reports are purportedly provided to satisfy the requirements of state law.

36. The audits provided by MBACC on the website do not provide the definition of

“materiality” for the analysis performed therein, making it impossible to determine what

level of misappropriation may be disregarded by the auditors.

37. The audits presented by the MBACC on the website does not provide any justification for

the retention of taxpayer funds as “unrestricted funds.”

38. MBACC consistently retains taxpayer funds to hold as “unrestricted” earnings.

39. These funds are not invested or held in interest bearing accounts.

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MISUSE OF TAXPAYER MONIES THROUGH SURREPTITIOUS POLITICAL
CONTRIBUTIONS

40. Defendant has utilized prior employees to set up separate companies for all of its

infrastructure and operations. These separate companies are awarded contracts without

any bidding process and are paid far more than the market value of the purported services.

41. Defendant utilizes these illusory entities to funnel money into political campaigns of its

favored candidates, prop up and exclusively support spoiler candidates to protect its

favored incumbents, and systematically violate the campaign finance laws of the State of

South Carolina.

42. Defendant issues public monies to political consultants for purposes unrelated to marketing

or tourism promotion.

43. Defendant utilizes competing political consultants to manage a controlled opposition for

the political candidate favored by Defendant.

44. Defendant utilizes political operatives to solicit monies to purchase political endorsements

from elected officials and others with influence over registered voters, all in violation of

South Carolina law.

45. On at least two occasions, agents of Defendant have solicited citizens to run for office

against the favored candidate in a political race. The sole purpose of using these illusory

candidates is to split the opposition vote or discourage a legitimate candidate from running

against the favored candidate.

46. In utilizing these illusory candidates, Defendant and/or its agents pay for all campaign costs

without making the required campaign finance disclosures.

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47. Defendant and its agents also funnel money through these illusory candidates to pay

kickbacks and other compensation to the political operatives and consultants running the

controlled opposition campaigns.

48. These actions directly violate S.C. Code Section 8-13-1346 and expose Defendant and its

members, Plaintiff included, to potential liability.

49. These actions are a misuse of public monies and membership dues, constituting a breach

of fiduciary duties to all members of Defendant.

IMPROPER USE OF FUNDS TO FAVOR CERTAIN CHAMBER MEMBERS

50. Defendant consistently utilizes the TDF funds and A-Tax Funds to promote certain

members of the Chamber and its related entities only, rather than all members of the

Chamber or all members of the Myrtle Beach area.

51. MBACC failed to spend the A-Tax funds within two years and continues to hold the funds

as “Reserve” in violation of the law that requires the funds to be returned to the City.

52. Upon information and belief, the TDF funds and A-Tax Funds have not been used

exclusively for tourism advertisement and promotion as required by S.C. Code § 4-10-970

and S.C. Code § 6-4-10.

53. Upon information and belief, Defendant has funneled the TDF funds and A-Tax Funds

through certain companies in order to receive donations and contributions from those

companies, effectively converting public finds into the coffers of MBACC.

54. Upon information and belief, MBACC funneled the TDF funds and A-Tax Funds through

some, if not all, of its agents to redirect some of those funds in the form of political

contributions to politicians supported by the MBACC.

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55. Upon information and belief, MBACC has funneled the TDF funds and A-Tax Funds

through its agents to avoid adverse tax consequences through its actions violating its tax-

exempt status.

FOR A FIRST CAUSE OF ACTION

(Breach of contract)

56. All previous allegations are incorporated herein as if restated verbatim.

57. Plaintiff and Defendant entered into a lawful and binding contract.

58. Defendant breached that contract and the implied covenant of good faith and fair dealing

in that contract.

59. As a result of Defendant’s breach of contract, Plaintiff suffered damages to be determined

by a jury.

FOR A SECOND CAUSE OF ACTION

(Breach of Fiduciary Duty)

60. All previous allegations are incorporated herein as if restated verbatim.

61. Defendant owed Plaintiff a fiduciary duty.

62. Defendant’s actions described above constitute a violation of that fiduciary duty.

63. As a result of Defendant’s breach of fiduciary duty, Plaintiff suffered damages to be

determined by a jury.

WHEREFORE, Plaintiffs pray this Court:

A. Declare that Defendants violated the law as specifically described above;

B. Enjoin any further expenditure or allocation of any and all TDF Funds and A-Tax

Funds until Defendants cease the violations of the law as described above and fully

comply with the applicable State and local laws;

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C. Enjoin any further disparate treatment against Plaintiff by Defendant and allow

Plaintiff to the same benefits and expenditures as any other member;

D. Award such compensable and special damages as allowed by law;

E. Such further and additional relief as the Court deems Proper.

RESPECTFULLY SUBMITTED

PLAYER LAW FIRM, LLC

/s/Tucker S. Player, Esq.
S.C. Bar # 16217
512 Village Church Drive
Chapin, SC 29036
(803) 315-6300-telephone
(803) 772-8037-facsimile
[email protected]
Attorney for Plaintiff

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