Beaufort chamber, city going to court over ownership of popular festivals

The city of Beaufort and an organization representing local business interests in northern Beaufort County are going to court over the celebration of a Lowcountry delicacy.

The Beaufort Regional Chamber of Commerce sued the city this week over ownership of two popular festivals.

In a 37-page lawsuit filed in federal court Tuesday, the chamber says the city violated the organization’s constitutional rights in denying a request to host the Beaufort Shrimp Festival next month. It also says the city falsely represented its ownership of chamber festivals in trademarking names to the events last year.

In the lawsuit, the chamber asks for ownership of the trademarked names to the Shrimp Festival and Taste of Beaufort. The chamber also asked for damages and legal fees in an amount determined by a jury and for an injunction to keep the city from using the trademarked names or anything similar.

Chamber officials and their Beaufort attorney, Ashley Twombley, said Wednesday the court filing isn’t meant to affect the upcoming festival and was the last option after discussions throughout the year and a final request for arbitration in August were unsuccessful.

“The chamber did not take this action lightly,” Twombley said. “They understand the significance of taking action against the city.”

The City Council met behind closed doors to receive legal advice related to the chamber Tuesday. The city learned of the court filing Wednesday, city manager Bill Prokop said.

In a statement Thursday, Prokop said city attorney Bill Harvey told the chamber earlier this month the groups could meet after the festival. He called the filing “unfortunate” and said the city was “deeply disappointed.”

“We believe the interests of both the chamber’s members and the citizens of Beaufort would be better served by using member dues and taxpayer dollars on civic projects, infrastructure development and community improvements, not legal proceedings,” Prokop said.

The two sides have been at odds in recent years over the chamber’s mission, organization and funding.

The chamber says it has owned Shrimp Festival since 1995 and Taste of Beaufort since 1999 and allowed Main Street Beaufort to operate the festivals from 2009 through 2016, when the organizations merged. Part of the merger agreement was that the chamber would own the festivals, the court papers say.

The city filed to trademark the festival names in late 2017. City officials made “serious false misrepresentations” when they applied for the trademarks, the chamber’s legal complaint said, including signing an agreement that nobody else has a claim to the names.

Prokop said the city registered the names to protect them from being snatched by a private company and sold and to ensure the event remains in Beaufort.

Beaufort in July denied the chamber’s request to host this year’s shrimp festival, citing what council members said was an inability of the two sides to come to an agreement. In August, council approved the city’s request to host the festival instead.

In its lawsuit, the chamber referenced statements made by council members as evidence the organization was treated unfairly and said it has the same rights as other festivals to use Henry C. Chambers Waterfront Park. The chamber also objected to the city asking for 10 percent of festival profits.

“The city had no rights to the profits from this or any other festival, and the fact that the city was attempting to put its hands on the profits of a nonprofit organization festival is alarming to the chamber and should be alarming to any group who holds public festivals in the city of Beaufort,” the lawsuit read.

Prokop said the money would have gone to a city program for park improvements and that he had planned to make similar requests of other festivals. He said in his statement Thursday the chamber has been unwilling to work out a solution.

The Shrimp Festival will be held by the city Oct. 5-6 in Waterfront Park. City event organizers say the festival will include more educational opportunities, expanded hours and a performance by “American Idol” winner and St. Helena Island native Candice Glover.

Craig Reaves, owner of Sea Eagle Market and longtime participant in the festival, said he feels the shrimp festival is a community event and that he planned to continue his involvement regardless of the organizer.

“I just think it’s bad for our city that we would be having this public feud two weeks before the festival,” he said. “I think it’s childish. I think everybody needs to take a deep breath, put their big-boy pants on and resolve this outside of the courts.”

This story was originally published September 20, 2018 at 11:06 AM.