890 S.E.2d 748
S.C.
2023
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Background

  • Myrtle Beach adopted Ordinance 1807 in August 2018 creating the Ocean Boulevard Entertainment Overlay District (OBEOD) over the historic downtown to foster a more "family friendly" tourism environment.
  • The OBEOD prohibited certain retail uses inside the overlay: smoke shops and tobacco stores; merchandising of tobacco paraphernalia and CBD products; merchandising of tobacco products beyond an incidental amount; and sexually oriented merchandise.
  • The ordinance declared these uses immediately nonconforming but provided an amortization deadline of December 31, 2018; continued noncompliance risked suspension or revocation of business licenses.
  • Nine of ~25 affected retailers (appellants) were cited for noncompliance; they sued (initially in federal court) and appealed administrative denials through the city's Board of Zoning Appeals (BZA) and the Horry County circuit court, which upheld the ordinance.
  • Appellants raised procedural and multiple constitutional challenges (spot/reverse-spot zoning, Equal Protection, Due Process, Takings under Penn Central, and preemption/conflict with state criminal law).
  • The South Carolina Supreme Court affirmed: the OBEOD did not impermissibly spot zone, survived rational-basis review, did not violate due process or constitute a taking, and did not conflict with state criminal law.

Issues

Issue Plaintiff's Argument Defendant's Argument Held
Procedural challenge to readings under S.C. Code §5-7-270 Ordinance versions differed between readings, so a third reading was required Challenge untimely (not raised within 60 days) and changes were not substantive to prohibited uses Timely-challenge bar applies; readings were in substantial compliance and issue is rejected
Equal Protection — spot/reverse spot zoning OBEOD is arbitrary/reverse spot zoning that treats similar businesses differently; boundaries irrational OBEOD is part of comprehensive plan to promote tourism; rational policy reasons for boundaries tied to historic downtown and pedestrian patterns Rational-basis review applies; not impermissible spot zoning; boundaries and policy are fairly debatable and valid
Equal Protection — lack of evidence on public safety City offered no proof prohibited uses harmed safety, so classification arbitrary Burden on challengers to show legislative facts were false; city need only have a rational basis Plaintiffs failed to rebut the rational basis; claim fails
Due Process — administrative hearing & amortization period Ordinance lacks explicit vendor hearing on merchandise classification; amortization is arbitrary/unreasonable BZA statutorily authorized to hear appeals and decide enforcement issues; amortization period not shown unreasonable and is moot given delay BZA has authority to adjudicate; amortization objection moot/insufficient
Takings under Penn Central Ordinance effectively takes business value without compensation Plaintiffs did not provide the factual record (economic impact, investment-backed expectations, character) required by Penn Central Takings claim rejected for failure to develop facts and abandoned arguments on two Penn Central factors
Preemption / Conflict with State Criminal Law Ordinance criminalizes sale of otherwise-legal products and conflicts with state law Ordinance imposes civil administrative penalty (license suspension), not criminal penalties; therefore no conflict No preemption/ conflict; ordinance civilly regulates business activity and is permissible

Key Cases Cited

  • Penn Central Transp. Co. v. City of New York, 438 U.S. 104 (1978) (three-factor regulatory takings framework)
  • Nordlinger v. Hahn, 505 U.S. 1 (1992) (rational-basis review standards)
  • Talbot v. Myrtle Beach Bd. of Adjustment, 222 S.C. 165 (1952) (spot zoning invalid when not part of comprehensive plan or for private gain)
  • Knowles v. City of Aiken, 305 S.C. 219 (1991) (spot zoning analysis—comprehensive plan and common welfare)
  • Bibco Corp. v. City of Sumter, 332 S.C. 45 (1998) (zoning ordinance and rational-basis review)
  • Rush v. City of Greenville, 246 S.C. 268 (1965) (presumption of validity for municipal zoning; judicial restraint)
  • McMaster v. Columbia Bd. of Zoning Appeals, 395 S.C. 499 (2011) (standard for declaring ordinances unconstitutional; heavy presumption of validity)
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