Dist. Ct. erred in granting plaintiffs-adult entertainment businesses’ request for issuance of preliminary injunction in their action, alleging that defendant-Small Business Administration violated their First Amendment rights by improperly denying them from seeking second round of loans under Paycheck Protection Plan enacted to address economic disruption caused by COVID-19 pandemic. Defendant did so based on statutory exclusion set forth in 25 USC section 636(a)(37)(A)(iv)(III)(aa) that excluded plaintiffs’ category of business from obtaining said loans. Ct. of Appeals found that defendant showed strong likelihood of success on merits, where Congress had simply chosen not to subsidize adult entertainment businesses, rather than attempting to regulate or suppress adult entertainment. Moreover, Ct. noted that: (1) government is not required to subsidize activity simply because said activity is protected by First Amendment; and (2) exclusion of entire category of prurient live performances from government subsidy program does not amount to viewpoint discrimination and does not violate Free Speech Clause.
Federal 7th Circuit Court
Civil Court
First Amendment