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 © 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

Aylo Challenges EU's DSA Mandate to Reveal Legal Names of Advertisers, Including Performers

Aylo has filed an appeal with the Court of Justice of the European Union (CJEU) challenging the EU's Digital Services Act mandate to disclose the legal names of advertisers, including performers, in a publicly accessible database.

Irish Senate Endorses Age Verification Proposal Based on Anti-Porn US State Laws

The Senate of the Republic of Ireland — known by its Gaelic name Seanad Éireann — has endorsed an age verification bill introduced by a senator who said he was inspired by the U.S. state laws promoted by religious conservative anti-porn crusaders.

Doxy Announces Extended 2-Year Warranty

U.K. pleasure brand Doxy has announced its new extended, two-year warranty on all products registered within 30 days of purchase.

Svakom Releases 'Jordan' Anal Vibrator

Svakom has debuted its new app-controlled thrusting anal vibrator Jordan, featuring rainbow-colored lights.

Meta Admits to Updating Database of Banned Images Based on 'Media Reports'

Meta has told its Oversight Board that the company relies on “media reports” when deciding to add images to its permanent database of banned content for its platforms, including Instagram and Facebook.

Kheper Debuts 'A Lifetime of Sex!' Relationship Game

Kheper Games has released its new "A Lifetime of Sex!” relationship game.

SexToyDistributing Now Shipping 2 New Masturbators From Curve Toys

SexToyDistributing is now shipping two new masturbators from Curve Toys' Jock collection.

Popular Pakistani Actor and Director Yasir Hussain Proposes Legalizing Porn

Prominent Pakistani actor, director and TV personality Yasir Hussain has sparked debate in the majority-Muslim country by suggesting that pornography should be legalized there and that society should own up to so many Pakistanis already being habitual consumers.

Honey Play Box Debuts New App-Controlled Toys at ANME

Honey Play Box presented its latest products last week at the ANME show in Burbank, California.

Senior Labour MP Launches Attack on All Porn, Sex Work

A senior Labour MP on Tuesday launched an attack against adult websites, saying they are “characterized by lawlessness,” and called for further criminalization of all sex work.

Show More