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."


Copyright © 2024 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

XR Brands Releases 'Pup Teddy Bear' BDSM Plush

XR Brands has expanded its Master Series collection BDSM-themed teddy bears with the Pup Teddy Bear Plush.

Washington Post Profiles ECP VP Solomon Friedman's Appearance at XBIZ LA

The Washington Post published this weekend a lengthy feature about Pornhub and Aylo, focusing on Ethical Capital Partners’ VP of Compliance Solomon Friedman’s keynote address and other appearances at XBIZ Los Angeles in January.

Sexperts Business Community Launches Platform for Promoting Counseling Services

The Sexperts Business Community (SBC) has launched a new platform for sex and relationships experts.

SexToyDistributing Now Shipping New BDSM Sets From Bedroom Bliss

SexToyDistributing is shipping three new BDSM sets from couples-centric pleasure brand Bedroom Bliss.

'Sex Workers Deserve Protections': Congressional Candidate Joe Cohn Reaches Out to Adult Community

Veteran civil rights attorney Joe Cohn, who is currently running in a New Jersey Democratic primary for a seat in the U.S. House of Representatives, says he is reaching out to the adult community to champion an inclusive approach to civil liberties that encompasses all sex workers and adult businesses.

Wicked Sensual Care Launches Sexual Assault Awareness Campaign

Wicked Sensual Care (WSC) has launched its annual campaign for Sexual Assault Awareness month.

Orion Wholesale Debuts 'Eternal' Collection

Orion Wholesale has introduced the new Eternal collection of vibrators from its You2Toys line.

Seoul Authorities Force Cancellation of Adult Expo for 'Distorting Perceptions of Sex'

After Seoul authorities repeatedly prevented 2024 KXF The Fashion from finding a suitable venue, event organizers have canceled the popular Korean adult industry expo, which was scheduled for this week.

FSC to Hold Discussion on Adult Industry Rights With Congressional Candidate Joe Cohn

Free Speech Coalition will hold a virtual discussion with congressional candidate Joe Cohn, whom the organization calls a strong advocate for adult industry rights.

Wicked Sensual Care Launches 'Menopause Hub'

Wicked Sensual Care (WSC) has launched its new Menopause Hub, dedicated to sex and intimacy during perimenopause, menopause and after.

Show More