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 © 2025 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

Age Verification Watch: Patching the Holes

This roundup provides an update on the latest news and developments on the age verification front as it impacts the adult industry.

Kaela Luna Makes Her TransAngels Debut

Kaela Luna has made her TransAngles debut alongside Parker Savage and Harrison Feels in “Jackhammering Kaela.”

Adult Time Marks April Fool's Day With 5 Satirical Releases

Adult Time is marking April Fool’s Day with the release of satirical scenes from five of its series.

Adult Time Wraps Production on Bree Mills' Feature 'Escape From Camp Conversion'

Adult Time has wrapped production on its latest feature, the Bree Mills-helmed "Escape From Camp Conversion," from its Girlcore studio brand.

Daisy Fox Makes Her TeamSkeet Debut

Daisy Fox makes her TeamSkeet debut in the latest episode of the studio series "She's New," titled "A Foxy Little Newcomer," with Nicky Rebel.

Elizabeth Skylar Performs Her 1st B/B/G in Latest From New Sensations

Elizabeth Skylar has performed her first B/B/G in the latest scene from New Sensations, with Codey Steele and Milan Ponjevic.

Lynna Nilsson Fronts Latest From Immoral Productions

Lynna Nilsson performs her first DVP in a new trilogy from Immoral Productions, alongside Matt Bird and Brad Knight.

Anna Claire Clouds: From Nashville to XMA Gold

The photo shoot is going great. Anna Claire Clouds knows all her angles. The moment the cap comes off the camera lens, Clouds tilts her head just so and deploys her signature dreamy eyes with all controls set to “smoldering.” Girl knows what she’s doing.

Lilly Bell Takes the Spotlight in 2 New Adult Time Scenes

2025 XMAs Girl/Girl Performer of the Year Lilly Bell stars in two new scenes from Adult Time.

LorReign Makes Her WIFEY Debut

Content creator and former Colorado sheriff's deputy LorReign has made her debut for new Vixen Media Group (VMG) studio imprint WIFEY alongside her husband Anthony and Jax Slayher.

Show More