Loans For The Little Darlings? Strip Clubs Win Another Ruling For Pandemic Relief

downloadWe have been discussing litigation of strip clubs denied pandemic relief, including a recent ruling in favor of such clubs in Nevada.  I have been highly critical of such denials.  Now, another judge, has ruled correctly in favor of these businesses. District Judge Matthew Leitman in Flint, Michigan, issued a preliminary injunction barring the Small Business Administration from excluding businesses that present live performances or sell products of a “prurient sexual nature” from loans under the Paycheck Protection Program. Businessman Jason Mohney who owns various clubs including Little Darlings (left) brought the action.  The Trump Administration is dead wrong in litigating these cases to use the pandemic funds to impose a moral judgment on certain lawful businesses.

Moheny runs an array of clubs and noted that this is an $8 billion industry that includes thousands of strip clubs nationwide with more than 57,000 employees.  This is discrimination based on objections over the morality of a legal business supported by consenting adults. As many on this blog know, I have been a critic for decades of morality legislation that seeks to impose the majority’s view of proper morals on those who do not share those morals.

This is only the latest such ruling against the Administration, which deserves to lose each and every appeal.  What is interesting in this decision is the discussion of Chevron.  I have repeatedly testified on the Chevron doctrine and my objections to its expansive interpretation. (e.g,. here and here).  The court “concludes under step one of Chevron that the PPP Ineligibility Rule conflicts with the PPP and is therefore invalid.”

While the court concludes that it is not necessary to address the underlying constitutional claims (under the doctrine of avoidance), Judge Leitman rejects the threshold claims against this industry:

“Defendants are correct that it would ordinarily be absurd to conclude that Congress meant to provide financial assistance to, among others, certain sexually oriented businesses and private clubs that discriminate. But these are no ordinary times, and the PPP is no ordinary legislation. The COVID-19 pandemic has decimated the country’s economy, and the PPP is an unprecedented effort to undo that financial ruin. More importantly, the PPP is an effort to protect American workers – as noted above, it is located within a Title of the CARES Act named the “Keeping American Workers Paid and Employed Act” – and Congress could rationally have concluded that those workers need protection no matter the line of business in which they work. From this perspective, Congress’s decision to expand funding to previously ineligible businesses is not an endorsement or approval of those businesses.”

The opinion is DV Diamond Club of Flint LLC et al v U.S. Small Business Administration et al, U.S. District Court, Eastern District of Michigan, No. 20-10899. It is a solid and detached analysis that reaches the correct decision — a decision consistent with similar rulings across the country.

Here is the opinion: Diamond Club v. United States Small Business Administration

59 thoughts on “Loans For The Little Darlings? Strip Clubs Win Another Ruling For Pandemic Relief”

  1. Could these strip clubs get any money from the National Endowment for the Arts? And we can still put dollar bills in their g strings!

    1. Independent Bob– If the strip clubs get money from the National Endowment for the Arts it would go to a better cause than the “Piss Christ” they funded some while back. So bold they thought of themselves but they wouldn’t dare with a Koran. They don’t have the artistic taste of the Medici or the courage.

  2. Judge Sullivan has just requested amicus briefs on the Flynn matters before him.

    If he doesn’t have enough to make up his mind before him now, he never will.

    One must wonder if he is just looking for support for making what might well be a singularly stupid decision that will be yet another embarrassment for an already tawdry looking judiciary.

    1. It’s benign theatrics. It’s a pretty cynical move. But since the Judge accused Flynn of treason, it was predictable that he would pull some stunts before dismissing.

      1. Not so benign if you are a defendant waiting for justice.

        If Barr and Durham have been showing excess restraint and delicacy on indictments up to now, this may just pull the trigger for them. I hope they get truly angry and respond with the tools they have.

        They, too, are under attack by these lawless thugs.

        Thank God we elected Trump. We were in much deeper trouble than I thought and we aren’t out of the woods yet. He has accomplished many things, but he, and we, have far more enemies in place than I would ever have imagined.

      2. Sydney Powell has filed a powerful, short motion in opposition. It is astonishing that Sullivan contemplates going ahead with this proposal.

        1. Based on his past behavior in this case, he was going to do something before signing off on the motion to dismiss. This allows an opposition brief which the Post and the Times can gobble up and run with for a while so they can make it look like they were covering something legitimate for the past 3 years. People don’t like to admit they got suckered.

          1. Sydney Powell offers that there is no basis for allowing amicus briefs in a case like this and that the judge has refused them in the past. Making a first time exception now will not look good. Why torture an innocent man with these processes a moment longer?

              1. Paul– I think you are right. They are used to thinking of us as evil; they are convincing me thar they are.

                  1. Paul – 😆😂😥😓😐

                    I did not pass. #losing

                    I use the CA bar calculator, which alleges to be “accurate.” It is a scaled score. I wish they would give a raw score.

                    My Bar results are as wacky as my MPRE results:

                    84 / 85 / a dismal (70) / 104.

                    86 for Cali, go figure.

                    1. The last time I tried for the CA bar, I sat next to a Stanford Law grad on their 3rd attempt.

                      I am glad I didn’t talk to them until after the 2 days of exam were over. I think I would have been quite deflated had I talk to them day 1

                    2. WW33 – I had a neighbor who failed the bar three times and sued to take it more times. He had problems with test taking. Nice guy, we finally make him a commissioner where he couldn’t hurt himself. 😉

                    3. WW33 – sorry to hear that. When I first moved to AZ they had an absolute limit on the number of new attorneys each year, regardless of the scores.

                    4. I also have a friend who went to junior college for 2 years, skipped out on the Bachelor’s degree, and went straight to a California Bar school (non-ABA), and they passed the CA bar of their 2nd attempt.

                      But then they had to take the MPRE 5 times. I asked them, are you licensed yet? No, bc of the MPRE and waiting on the character fitness form to clear.

                    5. Paul – That’s interesting.

                      At this point, I am regretting not working in another state—bc I believe it is 4 years in a different state (plus good standing), and then you qualify to take the 1-day essay exam portion as an attorney here.

                      Coulda, woulda, shoulda.

                      But so much time has gone by and I skipped out on some exams (due to external life factors), I would rather just keep grinding away, and continue to take the CA bar. I was a lot closer this time. I think it is manageable.

                      I had another friend I went to school with and they passed the 1st attempt. I saw them at an alumni event, and I said, hey, you passed 1st attempt … What did you do?

                      Their response: Oh, I study the entire last year, 3L, for the CA bar, I didn’t want to risk it.

                      A whole year…wow.

                      They also said they had 2 older brothers who were attorneys, who they work with now, 3 brothers at the same firm, and he received a lot of advice and pointers from them since they had both”been there, done that.”

                    6. WW33 – we have several attorneys here who take a multi-state bar.

                    7. The MPRE is the Multistate Professional Responsibility Examination. It is 2 hr, or 120 min, and 60 questions.

                      I think this exam, as an additional step in gaining your license, showed up bc of the Watergate scandal. Maybe around the late 70s or early 80s.

                  2. Paul – Even more amusing, you only get your results back if you did not pass, and it is scaled and % below. You never get to see your raw score.

                    Why don’t they just give everyone their raw score, whether you passed or failed?

                    Anyway, apparently, 63 % of MBE takers were % below my score in Criminal Law, and 52 % of MBE takers were % below my score in Civil Procedures. These were by far my worst coursework in law school.

                    And then, even more amusing, I was dismal in Property and Contracts, I won’t even say the scaled score. Most ppl did better than me in those topics on the MBE, and these were better coursework in law school.

                    I find the whole exam to be wonky…nothing lines up with what I would assume to be strengths and weaknesses based on topics.

                    But then again, my MPRE spread of 70 to 104 is wonky too. 84 and 85 are standard and in range.

                    1. WW33 – have you taken one of those bar courses? I know there are some on YouTube.

                    2. I have not done a bar course since the 1st attempt. I had 5 weeks to study, and not in a good environment.

                      I am thinking about trying Studicata or Adaptibar.

                      I used Barbri and Themis for the MPRE. It worked on the 1st, 2nd, and 4th attempts.

                      Believe it or not, I am still in that not good environment. Not sure how I got stuck here, but in some ways, with the lockdown, maybe it is for the better.

                      I am just waiting for the library to open up, so I can start studying again.

                      Too many distractions where I live, interrupted for all sorts of others’ life problems.

                    3. Hi Paul,

                      Sry for the delayed response.

                      I don’t meditate. I use to, a long time ago, 2012. Long time ago. Not so much now.

                      That would probably help, I know it can’t hurt.

                      Again, I would need a place outside where I live to do it.

                  3. OMG! PCS, you and World War III go get a room – I think Professor Turley issues a per diem for that under his “Civility Rule.”

                    1. George – you raise an important issue. You should be able to private message another member and take the conversation out of the normal blog.

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