A wealthy donor to the first National Tea Party convention last month has sued the convention organizer over a disagreement about the terms for helping to pay Sarah Palin's speaking fee -- launching a legal battle that threatens to tarnish plans for the next big get-together in July.

Bill Hemrick, a wealthy conservative and founder of the Upper-Deck baseball trading card company, filed suit Wednesday against Judson Phillips, founder of the Tea Party Nation and organizer of the February convention held in Nashville.

Hemrick loaned Phillips half of Palin's $100,000 speaking fee to secure the 2008 GOP vice presidential candidate as the convention's keynote speaker on the condition that he could be a part of Phillips' developing political action committee.

Hemrick said that after Phillips took the money, he backed out of the committee deal, and then barred Hemrick from attending the convention and Palin's speech.

The lawsuit filed in Williamson County, Tenn., seeks $500,000 in damages claiming defamation, false light, promise without intent to perform and intentional misrepresentation. It claims that Phillips had no intention of ever letting Hemrick participate in the political action committee and alleges that Phillips damaged Hemrick's reputation in a written statement.

"I only got involved in the political thing to try to make a difference, and because of the events that happened, I was kind of denied that privilege," Hemrick said.

Others back up Hemrick's claim. Tennessee Tea Party activist Anthony Shreeve, who was on the convention's planning committee until he was asked to resign because of a dispute with Phillips, said that Hemrick was solely responsible for getting Palin on the bill, and as a result, the reason the convention was so successful.

Hemrick said he didn't sue before the convention, because he did not want to hurt the Tea Party Movement itself.

"It's not vindictive. I don't want to hurt [Phillips]," Hemrick said. "I just want him to do what he said he was going to."

Phillips is currently in Las Vegas, making plans for the next Tea Party convention. A lawyer himself, he dismissed Hemrick's claims.

"I have not seen the lawsuit yet, so I can't comment on specifics. I am absolutely confident the suit is meritless, and I anticipate there will be a verdict for us," Phillips said.

With the new convention in the lineup, a win from Hemrick could poke a hole in Tea Party Nation's finances and reputation.

The reputation, however, was shaky from the start. Speakers, sponsors and even volunteers backed out of the convention once they learned that Tea Party Nation was a for-profit company. The convention's PayPal account for ticket payments was linked to a personal e-mail address belonging to Phillips' wife, Sherry.

Based on an analysis of internal documents showing approximate costs of the first convention, Tea Party Nation should have made a profit between $100,000 and $200,000.

The second convention scheduled for July 15 to 17 in Las Vegas will accommodate up to 2,000 conference attendees alone, and ticket prices will hover around $399; ticket prices are about $150 cheaper than the first convention. Phillips predicts attendance could more than double.

Hemrick said he does not begrudge Phillips for making a profit in a capitalist economy, but his own motivations are to support conservatives and the tea party movement.

"My involvement was simply to raise funds for political candidates," Hemrick said. "Not one dime would ever go in my pocket."