West Coast Clubs Join Legal Battle Against SBA Over 'Prurient Clause'

West Coast Clubs Join Legal Battle Against SBA Over 'Prurient Clause'

SAN FRANCISCO — A group of West Coast strip clubs have asked a California federal judge to grant them a preliminary injunction preventing the Small Business Administration (SBA) from discriminating against them by applying the “prurient clause” written into COVID-19 relief loan applications.

The legal action by 13 clubs in California, Oregon, Washington and Colorado is similar to ongoing efforts in Michigan, Wisconsin and Florida to obtain judicial protection for adult-oriented businesses.

The strip clubs, represented by Bradley J. Shafer of Shafer & Associates PC, argued at a video hearing yesterday before U.S. Magistrate Judge Laurel Beeler that the regulation “exceeds congressional authority under the CARES Act and is not the result of reasoned decision-making,” legal news site Law360 reported.

As XBIZ reported in March when the loans were first offered by the federal government, the “prurient” clause on the SBA loan application form replicates mid-1990s, Clinton-era 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.

Judge Beeler, according to Law360, “appeared sympathetic to the strip clubs,” expressing understanding that these are businesses "where people are trying to make a living, in a time where they can't make a living."

The Department of Justice attorney representing the SBA denied that the “prurient clause” was “a restriction on plaintiffs' speech at all.”

"As the government says, it is allowed to decide what it wants to fund. But I'm not unsympathetic to the [plaintiffs'] larger argument that 'we're a business too,'" Judge Beeler replied.

The clubs’ attorney argued that the government was attempting to "saddle those recovery efforts with the irrelevant ballast of decades-old regulations that impermissibly and unconscionably narrow the relief programs."

Shafer cited the precedent of “the May decision by the Sixth Circuit, refusing to pause a Michigan federal judge's order blocking the SBA from withholding Paycheck Protection Program loans from strip clubs and other sexually oriented businesses,” according to Law360.

The case is Deja Vu - San Francisco LLC et al. v. the U.S. Small Business Administration et al, case number 3:20-cv-03982, in the U.S. District Court for the Northern District of California.

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

Anna Claire Clouds Leads Elegant Angel's 'Shared: A Hotwife Origin Story'

Reigning XMAs Female Performer of the Year Anna Claire Clouds stars in Elegant Angel's new feature thriller "Shared: A Hotwife Origin Story," part of the site's annual "Superstar September" initiative.

Gender X Drops 'Vampirella' Parody

Gender X Films has released its latest feature, "Transpirella," a parody of the 1970s sci-fi horror comic book "Vampirella," directed by Jim Powers.

Aylo Fined $5 Million as FTC, Utah Settle Safety Practices Complaint

The Federal Trade Commission and the state of Utah on Wednesday settled a complaint against Aylo, requiring the company to pay a $5 million penalty and implement measures to prevent illegal content from appearing on its sites.

Jonni Darkko Directs New Chloe Amour Showcase

Evil Angel has released Jonni Darrko’s Chloe Amour showcase, titled "Mon Amour."

Bella Reid Named Penthouse's 'Pet of the Month' for September

Penthouse Magazine has named Bella Reid as Pet of the Month for September.

Andi Avalon Fronts Latest From New Sensations

Andi Avalon and Ken Feels star in the latest release from New Sensations.

Ricky's Room Drops Final Installment of Baby Gemini Showcase

Ricky’s Room has released the final installment of its Baby Gemini showcase, titled "Six Bodies In Motion."

XBIZ Amsterdam to Debut 'Behind the Lens' Screening Series

XBIZ is pleased to announce the debut of “Behind the Lens,” a new screening series presenting discussions with noted directors, taking place at the upcoming annual European conference, XBIZ Amsterdam.

'White Rabbit' Party Headed for XBIZ Amsterdam

XBIZ is pleased to announce the White Rabbit Party, an XBIZ Amsterdam special event set to take place Wednesday, Sept. 3.

Hailey Rose Heats Up the Fall Issue of X3 Magazine

2025 XMA Fav Female Performer Hailey Rose headlines the latest issue of X3 magazine, the industry’s premier “authenticity first” publication spotlighting the real personalities, passions and stories behind today’s top creators.

Show More