4:19-cv-02087-JD Date Filed 06/08/21 Entry Number 74 Page 1 of 7

IN THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF SOUTH CAROLINA
FLORENCE DIVISION

Danny Group, LLC; Almaden M. Karam; CA: 4:19-cv-02087-JD

Mohammed Karam; Blazian Promotions &
Company, LLC; Hector Melendez; Natalie
Trota-Litsey;

Plaintiffs,

v. ORDER

City of Myrtle Beach; Myrtle Beach

Downtown Redevelopment Corporation; David
Sebok; John Pederson;

Defendants.

This matter comes before the Court on Defendant City of Myrtle Beach (“City”) and

Defendants Myrtle Beach Downtown Redevelopment Corporation and David Sebok’s

(collectively “Defendants”) Motions for Summary Judgment (DE 45 and 46) as to all of Plaintiffs’

causes of action (Tortious Interference of Contract, Unconstitutional Taking under South Carolina

Constitution, Violation of 42 U.S.C. § 1983 – Unconstitutional Taking, Violation of 42 U.S.C. §

1983 – Lack of Due Process, and Violation of 42 U.S.C. §1985(3) - Civil Conspiracy to Hinder

Constitutional Rights). The Defendants contend inter alia that the Plaintiffs1 Elmadani M. Karam

(“Karam”), Hector Melendez (“Melendez”), and Natalie Trota-Litsey (“Trota-Litsey”), in their

individual capacities, lack standing to bring constitutional claims2 and that the Plaintiffs’

1
Pursuant to a Stipulation of Dismissal, Plaintiff Mohammed Karam dismissed his claims with
prejudice and was no longer a party to this action as of the date of the motions for summary judgment; and
therefore, Mohammad Karam is omitted from any discussion herein. (DE 37.)
2
Plaintiffs concede that all claims by Karam and Trota-Litsey, in their individual capacities, should
be brought in the name of their respective corporate Plaintiffs, and accordingly these claims are dismissed
as discussed herein. All references to Plaintiff herein shall refer to Plaintiff Hector Melendez and the
remaining corporate Plaintiffs.

1
 4:19-cv-02087-JD Date Filed 06/08/21 Entry Number 74 Page 2 of 7

respective business licenses were revoked because of illegal activities occurring on the properties

or the properties were otherwise public nuisances.3

Defendants contend the revocations of the business licenses were proper because the clubs

were public nuisances, and that further, any takings, equal protection and due process claims for

these businesses fail for the same reason. (DE 45-1, pp. 23 – 25.) Defendants submitted

Memorandums in Support of Summary Judgment (DE 45-1, 46), and Plaintiff submitted a

Response in opposition.4 (DE 50.) After reviewing the motion, memoranda submitted, and the

record, the Court grants Defendants’ Motions for Summary Judgment, in part, only as it relates to

claims brought by Karam and Trota-Litsey in their individual capacities.

BACKGROUND

Plaintiffs owned and operated businesses in the area known as the “Superblock” in the City

of Myrtle Beach, South Carolina. The Superblock is bound by Broadway Street to the north,

Highway 501 to the South, North Oak Street and 8th Avenue to the West, and 9th Avenue and

North Kings Highway to the East. Plaintiff Danny Group, LLC, operated the Ibiza Club and Hooka

Lounge located at 810 North Oak Street. Plaintiff Blazian Promotions & Company, LLC, operated

Natalia’s Bar & Grill. Plaintiff Hector Melendez operated Pure Ultra Club. Plaintiffs originally

applied for and obtained business licenses from the City with full disclosure that the businesses

would be selling alcohol.

3
The City revoked business licenses for the night clubs operating as Pure Ultra and Natalia’s, and
neither decision was properly appealed and these Plaintiffs, therefore, did not exhaust their administrative
remedies.
4
Plaintiff further filed Sur-Replies at Docket Entries 64 and 67; Defendants filed an Objection and
Reply to Docket Entry 64, contending it should be stricken because it was improperly filed without first
obtaining leave of the Court. The Court acknowledges that no motion was filed prior to submitting the Sur-
Reply; and therefore, the Court declines to consider the Sur-Replies in this Order.

2
 4:19-cv-02087-JD Date Filed 06/08/21 Entry Number 74 Page 3 of 7

During the process of making their respective tenant improvements to the leased properties,

Defendants purportedly obstructed Plaintiffs’ efforts. According to Plaintiffs, to hinder the

construction and completion of the upfits, Defendants rejected certain improvements with a suggestion

of an alternative, only to reject the alternative upon its implementation; limited the leasehold space that

could be used without any rational justification or legitimate purpose; and required sprinkler systems

to be installed when no other businesses outside of the Superblock were required to install similar

sprinkler systems. (DE 50, p. 3.)

Once Plaintiffs obtained their business licenses and signed leases for their respective locations,

Plaintiffs claim Defendants began a campaign of nearly constant harassment, to include documented

allegations of police harassment to include police offers in full tactical gear entering the night club

in large groups and asking questions of patrons; intimidation to include police officers harassing

patrons and customers; scare tactics to include police offers parking law enforcement vehicles

outside the business with blue lights running for hours without any explanation or justification;

and intentionally promoting neighborhood blight in the area by refusing to maintain properties and

refusing to provide any upkeep or sanitation in the area. (DE 50, p. 4.)

Defendant John Pedersen (“Pedersen”), the City Manager of Myrtle Beach, participated in

email correspondence regarding violence in the Superblock area and the option of condemning bars in

the Superblock. (DE 50, p. 5.) On May 5, 2016, David Sebok, the executive director of Defendant of

Myrtle Beach Downtown Redevelopment Corporation (“DRC”), sent an email to Pedersen, stating,

“You notice I get rid of all bars and bar potentials and only those on Main Street, remain, plus the

vacant Shai building in Oak Street.” (DE 50, p. 5.) Months later, Pederson emailed Sebok stating,

“Hector [Melendez] has withdrawn his business license appeal, so we are down to Natalia’s [Blazian

Promotions and Natalie Litsey].” (DE 50, p.5) (emphasis added.) At this point, Ibiza (operated by

3
 4:19-cv-02087-JD Date Filed 06/08/21 Entry Number 74 Page 4 of 7

Danny Group) had been run out of business and Pure Ultra Club (operated by Melendez) were both

shut down as nuisances.

Plaintiffs claim Defendants used criminal activity/nuisance and redevelopment as a pretext

for selective enforcement and/or discrimination5 and brought suit alleging Tortious Interference of

Contract, Unconstitutional Taking under South Carolina Constitution, Violation of 42 U.S.C. §

1983 – Unconstitutional Taking, Violation of 42 U.S.C. § 1983 – Lack of Due Process, and

Violation of 42 U.S.C. §1985(3) - Civil Conspiracy to Hinder Constitutional Rights.

LEGAL STANDARD

The party seeking summary judgment bears the initial burden of demonstrating that there

is no genuine issue of material fact. Celotex Corp. v. Catrett, 477 U.S. 317, 323, 106 S. Ct. 2548,

91 L. Ed. 2d 265 (1986). “A fact is ‘material’ if proof of its existence or non-existence would

affect disposition of the case under applicable law. An issue of material fact is ‘genuine’ if the

evidence offered is such that a reasonable jury might return a verdict for the non-movant.” Wai

Man Tom v. Hosp. Ventures LLC, 980 F.3d 1027, 1037 (4th Cir. 2020) (citation omitted). Once

the movant has made this threshold demonstration, the nonmoving party, to survive the motion for

summary judgment, must demonstrate specific, material facts that give rise to a genuine issue.

Celotex Corp., 477 U.S. at 323. Under this standard, ‘the mere existence of a scintilla of evidence’

in favor of the non-movant’s position is insufficient to withstand the summary judgment motion.

Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 252, 106 S. Ct. 2505, 91 L. Ed. 2d 202 (1986).

5
Plaintiffs claim the subject properties had considerably less police dispatch calls than similarly
situated properties in the City that are not in the Superblock, and Sebok specifically reached out unilaterally
to the two white, male lawyers who owned property in the Superblock to insure them that they were not
targets of the City’s attempts to obtain property in the Superblock, and the individual Plaintiffs are racial
or ethnic minorities. (DE 50, pp. 5-8.)

4
 4:19-cv-02087-JD Date Filed 06/08/21 Entry Number 74 Page 5 of 7

“Likewise, conclusory allegations or denials, without more, are insufficient to preclude granting

the summary judgment motion.” Wai Man Tom, 980 F.3d at 1037.

“Summary judgment cannot be granted merely because the court believes that the movant

will prevail if the action is tried on the merits.” Jacobs v. N.C. Admin. Office of the Courts, 780

F.3d 562, 568 (4th Cir. 2015) (quoting 10A Charles A. Wright et al., Federal Practice & Procedure

§ 2728 (3d ed. 1998)). “The court may grant summary judgment only if it concludes that the

evidence could not permit a reasonable jury to return a favorable verdict. “Therefore, courts must

view the evidence in the light most favorable to the nonmoving party and refrain from weighing

the evidence or making credibility determinations.” Variety Stores, Inc. v. Wal-Mart Stores, Inc.,

888 F.3d 651, 659 (4th Cir. 2018) (internal quotation marks omitted and alterations adopted). A

court improperly weighs the evidence if it fails to credit evidence that contradicts its factual

conclusions or fails to draw reasonable inferences in the light most favorable to the nonmoving

party. Id. at 659-60.

DISCUSSION

As a threshold matter related to Defendants’ contention that Plaintiffs, in their individual

capacities, lack standing, a plaintiff must show that he has “(1) suffered an injury-in-fact, (2) that

is fairly traceable to the challenged conduct of the defendant, and (3) that is likely to be redressed

by a favorable judicial decision.” Hutton v. Nat’l Bd. Of Examiners in Optometry, Inc., 892 F.3d

613, 619 (4th Cir. 2018). Further, the Fourth Circuit has recognized that, under South Carolina

law, “[g]enerally, a shareholder of a corporation has no standing to assert legal claims based on

harm to the corporation. Although the shareholder is indirectly harmed by any harm to the

corporation, only the corporation itself may bring an action to redress this harm.” Star v. TI

Oldfield Dev., LLC, 962 F.3d 117, 131 n. 17 (4th Cir. 2020); Rivers v. Wachovia Corp., 665 F.3d

5
 4:19-cv-02087-JD Date Filed 06/08/21 Entry Number 74 Page 6 of 7

610, 615 (4th Cir. 2011). Here, Karam, Melendez, and Trota-Litsey sued in their individual

capacities. Plaintiffs agree that the individual claims of Karam and Trota-Litsey are superseded

by the corporate claims. Therefore, the Court grants summary judgment on Defendants’ claim that

Karam and Trota-Litsey, in their individual capacities, lack standing to assert the present claims.

However, Plaintiffs allege Melendez, individually, undertook the renovations to the property that

he would later operate as Pure Ultra Club. (DE 50, p. 12.) Accordingly, there is no corporate

entity that would otherwise have standing to make claims specific to the tenant upfits made by

Melendez, and summary judgment would not be appropriate at this stage of litigation.

As to the remaining claims and defenses before the Court, a review of the record reveals

there are genuine issues of material fact, to include whether John Pederson, Myrtle Beach

Downtown Redevelopment Corporation and David Sebok’s actions constitute state action.

Summary judgment is appropriate only if the evidence could not permit a reasonable jury to return

a favorable verdict. Since the Court must view the evidence presented in the light most favorable

to the nonmoving party and refrain from weighing the evidence or making credibility

determinations, the Defendants’ Motions for Summary Judgment are denied as to the Plaintiffs’

remaining causes of action.

For the reasons set forth above, it is ORDERED, ADJUDGED and DECREED that the

Defendants’ Motions for Summary Judgment are GRANTED only as to Plaintiffs and Natalie

Trota-Litsey in their individual capacities and otherwise DENIED as to the remaining causes of

action.

6
 4:19-cv-02087-JD Date Filed 06/08/21 Entry Number 74 Page 7 of 7

IT IS SO ORDERED.

Florence, South Carolina

June 8, 2021