Strip Clubs Can’t Be Stripped Of Access To $10 Million Emergency Coronavirus Loans, Court Rules

The government may need to cough up millions of dollar bills based on a ruling by U.S. District Judge, Matthew Leitman. The preliminary injunction will bar federal officials from enforcing a regulation preventing strip club owners from participating in the Paycheck Protection Program (PPP) meant to support small businesses during the coronavirus pandemic.

“Simply put, Congress did not pick winners and losers in the PPP,” U.S. District Judge Matthew Leitman wrote. Like many other small businesses, strip club owners and workers have been losing their shirts because of the restrictions put in place to mitigate the spread of coronavirus. In its guidelines to receiving PPP loans the Small Business Administration (SBA) had included provisions that excluded legal businesses providing live performances of a “prurient sexual nature.”

Jason Mohney, a strip club owner, filed the lawsuit on behalf of his club, Little Darlines, based in Flint, Michigan. He argued that the SBA exclusions discriminated against workers performing legal services and were “shortchanging the employees.” IBISWorld estimates that close to 60,000 people are employed at nearly 4,000 strip clubs in the US; the industry brings in close to $8 billion a year in revenue.

Judge Leitman’s ruling will allow strip club owners to provide wage support for those employees. PPP was designed to make “loan guarantees widely available to small businesses across the commercial spectrum,” he wrote.”Through the PPP, Congress provided temporary paycheck support to all Americans.” He added that, “there is a substantial risk that plaintiffs will lose their businesses if they do not obtain PPP loans now,”

Initial demand for PPP loans was astronomical. Congress approved an additional $310 billion, but demand appears to have cooled, with about 40% of funds from the new tranche still available.

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