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 © 2026 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

JustFor.fans Wins Trademark Infringement Case Against Fraudulent Domain

The World Intellectual Property Organization (WIPO) has ruled in favor of fan site JustFor.fans in a case against a website using an infringing domain.

Odin Expands 'Kong Benderz' Dildo Collection

Odin Novelties has expanded its Kong Benderz collection with the addition of a new dildo.

Orion Debuts 'Vibepad Intense 2' Vibrator

Orion Wholesale has introduced the second edition of its Vibepad Intense vibrator.

Aylo Moves to Settle Two 'Children of Pornhub' Class-Action Lawsuits

Aylo has agreed to terms for a settlement with the plaintiffs in two long-running class actions over allegations that former Pornhub parent company MindGeek knowingly allowed and profited from CSAM on its sites.

Full Circle Brings Back 'Baby' Bullet Vibe Collection

Full Circle has re-released its Baby collection of three bullet vibrators.

Odin Debuts 'Besties' Dildo Collection

Odin Novelties has debuted its new Besties collection of silicone dildos.

Sustory Introduces 'Lennox' Vibrating Anal Beads

Pleasure brand Sustory has introduced Lennox, its new progressive vibrating anal bead system.

Odin Introduces 'Kink Mechs Turret' Sex Machine

Odin Novelties has debuted its new Kink Mechs Turret sex machine.

Hismith Introduces 'Max 200W' Sex Machine

Pleasure brand Hismith has debuted its new Max 200W sex machine.

Orion Expands 'Bad Kitty' Line

Orion Wholesale has added two new harness sets to its Bad Kitty collection of fetish accessories.

Show More