A federal judge on Friday granted a preliminary injunction in favor of four Wisconsin strip clubs whose requests for emergency federal loans were denied on the basis of the sexual nature of the businesses.
U.S. District Judge Lynn Adelman’s ruling allows owners of four Silk Exotic Gentleman’s Clubs in Milwaukee and Middleton to maintain their eligibility for loans administered by the U.S. Small Business Administration, according to court documents.
The four complainants – Camelot Banquet Rooms Inc .; Downtown Juneau Investments LLC; Midrad SARL; and PPH Properties I LLC – argued that an SBA rule, which states that a business of a “lascivious sexual nature” is ineligible, discriminates against them in violation of the First Amendment.
The SBA’s paycheck protection program is designed to cover salaries and other small business expenses for eight weeks, while stay-at-home orders prevent normal business operations.
Adelman concluded that the plaintiffs would likely succeed in arguing that their business, while sexual in nature, is not lewd and that the regulations violate the First Amendment and due process rights, according to court documents.
During a telephone hearing on April 15, government lawyers argued that the SBA did not infringe on clubs’ free speech but were under no obligation to fund it.
Friday the The Washington Post reported that 80% of paycheck protection program applicants found themselves without funding after the first batch of $ 349 billion ran out. But outrage over the millions of dollars that went to larger, publicly traded companies prompted some to return more than $ 125 million on Thursday, according to the Post.