Court Denies SBA's Request to Pause Order Allowing Strip Club Loans

Court Denies SBA's Request to Pause Order Allowing Strip Club Loans

CINCINNATI — A three-judge majority in the Sixth Circuit appeals court denied the Small Business Administration’s (SBA) request to pause last week’s decision by a Michigan judge establishing that local strip clubs should be eligible for the Payment Protection Program (PPP) as part of the U.S. Congress-approved COVID-19 relief package, regardless of the “prurient clause” included as part of the application.

The Sixth Circuit judges denied the SBA’s emergency motion for a stay, filed last week, attempting to uphold the “prurient clause” that has allowed them for decades to discriminate against sexually oriented businesses.

The “prurient” clause on the SBA loan application form, as XBIZ has been reporting, replicates mid-1990s language designed to discriminate against sexually oriented businesses.

The form compels applicants to declare that they do not “present live performances of a prurient sexual nature or derive directly or indirectly more than de minimis gross revenue through the sale of products or services, or the presentation of any depictions or displays, of a prurient sexual nature.”

The word “prurient” is an imprecise, obscure word that means “appealing to unhealthy sexual interests” and was used by the U.S. Supreme Court in a landmark 1973 ruling. Several members of the adult entertainment community and First Amendment lawyers have pointed out that people who do not consider their sexual expression “unhealthy” are exempt from application of the “prurient” clause.”

DV Diamond Club of Flint LLC and other 41 other strip clubs sued the SBA, alleging they were put in the position of being denied for PPP loans because of the “prurient clause.”

Last Monday, U.S. District Judge Judge Matthe F. Leitman issued an injunction ordering the SBA “not exclude Plaintiffs from participating in the PPP on the ground that they present entertainment or sell products of a ‘prurient sexual nature.’”

The Sixth Circuit’s majority opinion emphasized that the CARES Act states that "any business concern" is eligible for the loan, based on the standards of being a small business employing less than 500 people.

"That broad interpretation also comports with Congress's intent to provide support to as many displaced American workers as possible and, in doing so, does not lead to an 'absurd result' as the SBA claims," the Sixth Circuit appeals court ruled.

The court stressed that “the public interest is served in guaranteeing that any business, including plaintiffs', receive loans to protect and support their employees during the pandemic which, we can all agree, constitutes extraordinary circumstances."

Related:  

Copyright © 2025 Adnet Media. All Rights Reserved. XBIZ is a trademark of Adnet Media.
Reproduction in whole or in part in any form or medium without express written permission is prohibited.

More News

Blush Expands 'Aria' Collection With 4 New Vibes

Blush has introduced four upgraded versions of vibrators from its Aria collection.

We-Vibe Debuts 'Melt 2' Vibrator, Air Pulse Massager

We-Vibe has introduced its new Melt 2 vibrator/air pulse massager.

Full Circle Expands 'Savage Me' Line of Male Torsos

Full Circle has expanded its line of Savage Me male torsos.

Nalpac, Entrenue Sign Distro Deal With Like A Kitten

Nalpac/Entrenue has inked a deal to distribute Like A Kitten pleasure products.

XBIZ Retreat Reloads Amsterdam Edition, Set for Sept. 2-5

XBIZ Retreat is making its highly anticipated return to Amsterdam, set for Sept. 2–5 at the chic Park Centraal Hotel.

Fantasy Gifts NJ Unveils 'Shave Stix' With Product Launch Event

Sexual wellness retailer Fantasy Gifts NJ introduced its new Shave Stix during a special event at its Lumberton location on April 17.

Motorbunny Now Available on 'Throne' Gift Platform

Motorbunny pleasure products are now available on Throne gift platform.

AV Bulletin: Age Verification Hits the Mainstream, Ofcom Sets a Date

Industry stakeholders and free speech advocates have anxiously been awaiting the Supreme Court’s decision in Free Speech Coalition v. Paxton, which could significantly impact state age verification laws around the country. In the meantime, state legislatures continue to weigh and pass AV bills, AV tech providers continue to tout their services, and legal challenges continue to play out in the courts — with some cases on hold pending the SCOTUS ruling in Paxton.

Honey's Place Now Distributing Camtoyz

Honey's Place is now distributing Camtoyz pleasure products.

ToyChats Announces Reviewer Incentives

Recently launched pleasure product review site ToyChats has announced a giveaway program for reviewers.

Show More