Gentlemens' clubs, stripped of business during the pandemic, are entitled to relief, judge rules

“Simply put, Congress did not pick winners and losers in the PPP,” U.S. District Judge Matthew Leitman wrote.
Image: Strip club
A man looks at a sign at a strip club advertising "coronavirus-free lap dances" on March 13, 2020, in Las Vegas.John Locher / AP

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By David K. Li

Strip club workers and owners, losing their shirts in this coronavirus pandemic, cannot be barred from emergency federal loans and grants, a federal judge ruled on Monday.

U.S. District Judge Matthew Leitman sided with plaintiffs, led by the DV Diamond Club in Flint, Michigan, and said the Small Business Administration — in doling out finds from the Paycheck Protection Program — cannot exclude legal businesses deemed to be of a “prurient sexual nature.”

The PPP, created through the Coronavirus Aid, Relief, and Economic Security (CARES) Act, was designed to draw maximum applicants and make "loan guarantees widely available to small businesses across the commercial spectrum," according to the judge.

“Simply put, Congress did not pick winners and losers in the PPP,” Leitman ruled. "Instead, through the PPP, Congress provided temporary paycheck support to all Americans."

Other plaintiffs in the case included Spearmint Rhino Companies Worldwide, Inc., and Rouge Gentlemen's Club, Inc. These plaintiffs provide lawful “clothed, semi-nude, and/or nude performance entertainment," according to the ruling.

"I'm guessing some people in the SBA had a moral problem with my clients, the type of businesses they are, and didn't want to provide loans," the clubs' lead lawyer, Brad Shafer, told NBC News on Tuesday.

With most Americans living in states that have stringent stay-at-home orders, strip clubs are not deemed to be an essential service and have been particularly hard hit in this pandemic. It's virtually impossible for dancers, working for tips, to apply their craft while also maintaining social distance of six feet.

A representative for the Small Business Administration did not immediately return phone calls and emails on Tuesday seeking the agency's response to Judge Leitman's preliminary injunction.

"We have already prepared a response to a motion for stay if the federal government files one," Shafer said. “Time is of the essence (for club workers and owners)."

The judge's ruling only applies to these Michigan plaintiffs, according to Shafer, but the lawyer hopes Leitman's findings will provide "persuasive authority" for other, similar legal actions.