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 © 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

Adult Industry Reacts to Trump Victory

On Tuesday, former President Donald Trump was reelected, defeating Vice President Kamala Harris to reclaim the office he lost four years ago.

Angel Windell, Katie Davis Headline Latest 'Lesbian Seductions'

Angel Windell and Katie Davis topline the 80th edition of “Lesbian Seductions,” from Girlfriends.

ERIKALUST Releases 'Texas Ride 'Em'

ERIKALUST has released its latest scene, “Texas Ride ‘Em.”

Ema Karter Makes Her Blacked Debut

Ema Karter has made her debut for Vixen Media Group (VMG) studio imprint Blacked, alongside Jax Slayher.

Scarlett Alexis Featured, Anna Claire Clouds Guest Hosts on 'Adult Time Podcast'

Scarlett Alexis is the latest guest on the “Adult Time Podcast,” hosted by studio CCO Bree Mills and guest host Anna Claire Clouds.

Penthouse Names Krystal Harper Its November 'Pet of the Month'

Penthouse Magazine has named model Krystal Harper as Pet of the Month for November.

Sinatra Monroe Toplines New Digital Playground Comedy 'Single Minded'

Sinatra Monroe headlines the new comedy feature from Digital Playground, titled "Single Minded."

Adult Time Launches New Series 'Preggo World'

Adult Time has released the first episode of its new series “Preggo World,” titled “18 & Pregnant.”

Alexis James Makes Her Tushy Raw Debut

Alexis James has made her debut for Vixen Media Group (VMG) studio imprint Tushy Raw, alongside Victor Ray.

Lucy Hart Stars in Mainstream Slasher Flick 'Director's Cut'

Longtime performer Lucy Hart has stepped outside the world of adult to star in "Director's Cut," a new mainstream slasher movie that premiered this weekend in theaters across the U.S.

Show More