TOPLINEStrip clubs in Michigan and Wisconsin—denied coronavirus relief loans due to the nature of their businesses—are suing the U.S. Small Business Administration and Steve Mnuchin, alleging that the stimulus law infringes upon their constitutional free speech rights.
Little Darlings, who is suing the SBA, before shutting due to coronavirus social distancing ... [+]
KEY FACTS
Strip clubs Silk Exotic Gentlemen’s Club of Milwaukee and Middleton, Wisconsin, and Little Darlings of Flint, Michigan, are separately suing the U.S. Small Business Administration and Steve Mnuchin after being denied coronavirus relief loans due to the nature of their businesses.
The lawsuit, filed by Little Darlings, claims that the SBA’s Paycheck Protection Program (PPP) for small businesses affected by coronavirus “improperly and unconstitutionally limits benefits to businesses and workers unquestionably engaged in First Amendment protected expression,” in their ineligibility, according to MLive.
The PPP is distributed as forgivable loans for small businesses excluding those who profit “through the sale of products or services, or the presentation of any depiction or display, of a prurient sexual nature,” including “live performances of a prurient sexual nature,” saying these business are not in the “public interest.”
The Silk Exotic lawsuit against the SBA claims “the entertainment provided by Silk is non-obscene (and not prurient), appeals to healthy human interests and desires, and is in full compliance with the numerous licenses and permits that are held by the Plaintiffs and have been reviewed by municipal authorities and renewed annually.” (The SBA declined to comment on either suit.)
Without strip club income, adult entertainers are searching for telework, with adult livestreaming sites like CamSoda and ManyVids reporting 37% and 69% respective increases in new model registrations in March, according to the New York Times, though it is unclear if these models are able to generate strip-club-equivalent revenue.
As of Wednesday afternoon, Silk Exotic has been granted a temporary restraining order from the SBA, temporarily excluding the business from the “prurient sexual nature” exception to the PPP.
CRITICAL QUOTE
“My clients are in the exact same economic boat everyone else is in. It’s content-based discrimination . . . blatantly unconstitutional regulation,” Brad Schafer, attorney for Little Darlings, told Forbes.
KEY BACKGROUND
The SBA’s PPP program opened to “all businesses” with fewer than 500 employees on April 3, 2020, to provide 1% fixed-interest loans to cover payroll costs, most mortgage interest, rent and utilities. The program is open for applicants until June 30, 2020, with the loans due in two years as part of the federal government’s $2 trillion financial relief package.
TANGENT
The appetite for some adult entertainment has increased with social distancing and stay-at-home orders—porn giant Pornhub reports that traffic has increased 11.6% with coronavirus, and when the site offered free premium access to all of Italy, its countrywide traffic increased 57% month-over-month. And while many businesses have plummeted, sex toy companies have soared, with corporations like Doc Johnson reporting 100% year-over-year growth driven by March sales, according to the Los Angeles Times.
FURTHER READING
Strip Clubs and Lobbyists Sue For Stimulus Dollars (CNN)
Due To The Coronavirus, Sex-Toy Sales Are Up, Stigma Is Down (Los Angeles Times)
Sex Work Comes Home (New York Times
Paycheck Protection Program Information Sheet: Borrowers (Treasury.Gov)
