Verified Complaint — Camelot Banquet Rooms, Inc. v. Small Business Administration (No. 2:21-cv-00447)

Summary

A verified complaint for injunctive and declaratory relief in Camelot Banquet Rooms, Inc., et al. v. United States Small Business Administration, et al., No. 2:21-cv-00447, in the U.S. District Court for the Eastern District of Wisconsin, filed April 7, 2021 as Document 1. The plaintiff businesses sue the SBA, Administrator Isabel Casillas Guzman, the United States and Treasury Secretary Janet Yellen in their official capacities. They allege that SBA regulations and operating procedures unconstitutionally limit Second Draw PPP benefits under 15 U.S.C. § 636(a)(37) for businesses engaged in First Amendment-protected activities, in violation of the First and Fifth Amendments. The complaint states the SBA agreed to set aside guaranteed funds equal to the amounts applied for, and seeks an expedited preliminary injunction. The 200-page filing ends with verifications executed Apr. 5, 2021.

Summary drafted by a model from the text of the original file linked on this page and checked by script against that text before publication. It is a navigation aid, not a reading of what the document proves. Where AI is used

Cite this document

“Verified Complaint — Camelot Banquet Rooms, Inc. v. Small Business Administration (No. 2:21-cv-00447).” Original at archive.org. Archived at Pandemic Darlings, https://pandemicdarlings.com/source-documents/complaint-no-2-21-cv-00447-dkt-1-8ac34ba92f/, SHA-256 a14fd102ffd1a3f9fc3c84a5c18bfaecef78cadcf4f52054ec57bc664fab8575.

Full text

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF WISCONSIN

Camelot Banquet Rooms, Inc.; Downtown Juneau Investments, LLC; Midrad, LLC;
PPH Properties I, LLC; Heritage Management Services, Inc.; Vonch, LLC; East Coast
Restaurant & Nightclubs, LLC; Benelux Corporation; Filosadelfia LLC; MAG Pitt
LP; MAG Enterprises Inc.; 2740 Corporation; MAG Entertainment LLC; Oasis On
Essington LLC; Burch Management Company, Inc.; BDS Restaurant, Inc.; DB
Entertainment, Inc.; T and N Inc.; Millennium Restaurants Group, Inc.; Club
Sinrock, LLC (Alaska); Club Sinrock, LLC (Washington); Club Sinrock, LLC
(Oregon); Club Sinrock DT, LLC; Kimmico, Inc.; Polmour, Inc.; Sisyphian, LLC; 689
Eatery Corp.; Syzygy, LLC; Brookhurst Venture, LLC; City of Industry Hospitality
Venture, Inc.; Farmdale Hospitality Services, Inc.; High Expectations Hospitality,
LLC; Inland Restaurant Venture I, Inc.; Kentucky Hospitality Venture, LLC; L.C.M.,
LLC; Midnight Sun Enterprises, Inc.; Nitelife, Inc.; Olympic Ave Venture, Inc.; The
Oxnard Hospitality Services, Inc.; Penn Ave Hospitality, LLC; Platinum SJ
Enterprise; PNM Enterprises, Inc.; Rialto Pockets, Inc.; Rouge Gentlemen’s Club,
Inc.; Santa Barbra Hospitality Services, Inc.; Santa Maria Restaurant Enterprises,
Inc.; Saries Lounge, LLC; Spearmint Rhino Companies Worldwide, Inc.; Spearmint
Rhino Consulting Worldwide, Inc.; Washington Management, LLC; W.P.B.
Hospitality, LLC; and K-Kel, Inc.,

Plaintiffs,
v.

United States Small Business Administration; Isabel Casillas Guzman, in her
Official Capacity as Administrator of the Small Business Administration; United
States Of America; and Janet Yellen, in her Official Capacity as United States
Secretary of Treasury,
Defendants.

PLAINTIFFS’ VERIFIED COMPLAINT FOR INJUNCTIVE AND
DECLARATORY RELIEF

The Plaintiffs allege:

INTRODUCTION

1. This is a civil action wherein Plaintiffs seek injunctive relief to restrain
Defendants from violating their constitutional rights by discriminating against

businesses and workers who are entitled to the benefits from the Paycheck Protection

Case 2:21-cv-00447-LA Filed 04/07/21 Page 1 of 200 Document 1
Program Second Draw Loans provisions (the “Second Draw PPP”), Title III, of the

recently-enacted Consolidated Appropriations Act, 2021, Pub. L. 117-2 § 311 (2020)
(the “2021 Appropriations Act”), now, primarily, codified as 15 U.S.C. § 636(a)(37).

The Second Draw PPP is, largely, a continuation of the Paycheck Protection Program

(“PPP”) established by Congress in response to the COVID-19 Pandemic (the

“Pandemic,” or “COVID”) following the President declaring a national emergency in
March of 2020. Congress created the PPP through the Coronavirus, Aid, Relief, and

Economic Security Act, Pub. L. 116-136 (2020) (the “CARES Act”), which is largely

codified in 15 U.S.C. § 636(a)(36). Both the Second Draw PPP and the PPP were later

amended by the American Rescue Plan Act of 2021, Pub. L. 117-2 § 5001 (2021) (the
“ARPA”). The Second Draw PPP is designed to quickly provide additional emergency

relief to businesses and workers affected by the Pandemic, which has now eclipsed a

year in duration. The SBA has enacted numerous Interim Final Rules to implement
both the PPP and the Second Draw PPP. However, as to both programs, the SBA has

incorporated previously existing regulations and applied previously existing

standard operating procedures formulated to implement narrower existing loan

programs of the SBA which, particularly in the emergency circumstances here
resulting from the Pandemic, improperly and unconstitutionally limit benefits to

businesses and workers unquestionably engaged in First Amendment-protected

activities. The regulations and operating procedures, defined more specifically below,

have been previously enjoined by no fewer than three different federal courts,
including this Court; they conflict with the text of the SBA’s enabling act and the

purpose of the Second Draw PPP; and they violate businesses’ and workers’

fundamental rights under the First and Fifth Amendments of the United States
Constitution.

2. Plaintiffs have contacted the SBA, through counsel, and the SBA has

agreed to set aside guaranteed funds for all Plaintiffs in this action equal to the
2

Case 2:21-cv-00447-LA Filed 04/07/21 Page 2 of 200 Document 1
amount of Second Draw PPP funds Plaintiffs applied for; therefore, this action is not

brought on an emergency basis; however, Plaintiffs seek an expedited preliminary
injunction in order to prevent irreparable injury to Plaintiffs, their employees, the

entertainers who perform at their premises, and all of their constitutional rights.

JURISDICTION AND VENUE

3. Jurisdiction is conferred on this Court for the resolution of the

substantial constitutional questions presented here by virtue of 28 U.S.C. § 1331; 28

U.S.C. § 1343(a)(1), (3), (4); 28 U.S.C. § 1346(a)(2); 28 U.S.C. § 1361; and 28 U.S.C. §

2201.
4. Authority for judicial review of agency action is further provided by 5

U.S.C. § 702, which states:

A person suffering legal wrong because of agency action, or adversely
affected or aggrieved by agency action within the meaning of a relevant
statute, is entitled to judicial review thereof. An action in a court of the
United States seeking relief other than money damages and stating a
claim that an agency or an officer or employee thereof acted or failed to
act in an official capacity or under color of legal authority shall not be
dismissed nor relief therein be denied on the ground that it is against
the United States or that the United States is an indispensable party.
The United States may be named as a defendant in any such action, and
a judgment or decree may be entered against the United
States: Provided, That any mandatory or injunctive decree shall specify
the Federal officer or officers (by name or by title), and their successors
in office, personally responsible for compliance. Nothing herein (1)
affects other limitations on judicial review or the power or duty of the
court to dismiss any action or deny relief on any other appropriate legal
or equitable ground; or (2) confers authority to grant relief if any other
statute that grants consent to suit expressly or impliedly forbids the
relief which is sought.

5. The prayer for declaratory relief is founded in part on Rule 57 of the

Federal Rules of Civil Procedure as well as in 28 U.S.C. § 2201, the latter of which

provides that:

. . . any court of the United States, upon the filing of an appropriate
pleading, may declare the rights and other legal relations of any
interested party seeking such declaration, whether or not further relief
is or could be sought. . . .
3

Case 2:21-cv-00447-LA Filed 04/07/21 Page 3 of 200 Document 1
6. No other action, civil or criminal, is pending in any state court involving

the Plaintiffs regarding the activities and events here.
7. This suit is authorized by law to redress deprivations of rights,

privileges, and immunities secured by the First and Fifth Amendments to the United

States Constitution, and for declaratory and injunctive relief.
8. Pursuant to 28 U.S.C. § 1391(e), venue in this Court is appropriate as

Plaintiffs Camelot Banquet Rooms, Inc., Downtown Juneau Investments, LLC, and

PPH Properties I, LLC are located in the Eastern District of Wisconsin; the Small

Business Administration and the Treasury Department operate in the Eastern
District of Wisconsin; and the injury complained of and acts causing that injury have

occurred and will continue to occur in the Eastern District of Wisconsin.

9. Venue is appropriate as to all plaintiffs because Plaintiffs Camelot

Banquet Rooms, Inc., Downtown Juneau Investments, LLC, and PPH Properties I,
LLC reside in the Eastern District of Wisconsin. Further, because of financial

hardships caused by the Pandemic, many of the Plaintiffs would not be financially

able to assert these claims if required to litigate individually in multiple jurisdictions.

PARTIES

Plaintiffs

10. Plaintiff Camelot Banquet Rooms, Inc. is a Wisconsin Corporation duly

organized and authorized to do business in the State of Wisconsin. Camelot Banquet
Rooms, Inc. does business as Silk Exotic Gentlemen’s Club at 11400 Silver Spring

Road in Milwaukee, Wisconsin.

11. Plaintiff Downtown Juneau Investments, LLC is a Wisconsin Limited
Liability Company duly organized and authorized to do business in the State of

Wisconsin. Downtown Juneau Investments, LLC does business as Silk Exotic

Gentlemen’s Club on Water at 144 East Juneau Ave. in Milwaukee, Wisconsin.
4

Case 2:21-cv-00447-LA Filed 04/07/21 Page 4 of 200 Document 1
12. Plaintiff Midrad, LLC is a Wisconsin Limited Liability Company duly

organized and authorized to do business in the State of Wisconsin. Midrad, LLC does
business as Silk Exotic Gentlemen’s Club Madison at 7302 U.S. Hwy 14 in Middleton,

Wisconsin.

13. Plaintiff PPH Properties I, LLC is a Wisconsin Limited Liability

Company duly organized and authorized to do business in the State of Wisconsin.
PPH Properties I, LLC does business as Silk Exotic Gentlemen’s Club Downtown

Milwaukee at 730 North Old World Third Street in Milwaukee, Wisconsin.

14. Plaintiff Heritage Management Services, Inc. is a California

Corporation duly organized and authorized to do business in the State of California.
Heritage Management Services, Inc. does business as Crazy Horse at 980 Market

Street in San Francisco, California.

15. Plaintiff Vonch, LLC is an Illinois Limited Liability Company duly
organized and authorized to do business in the State of Illinois. Vonch, LLC is the

holder of the liquor license and sole member of Polekatz Gentlemen’s Club, LLC,

which does business as Polekatz Gentlemen’s Club at 7337 W. 100th Place in

Bridgeview, Illinois.
16. Plaintiff East Coast Restaurant & Nightclubs, LLC is a New Hampshire

Limited Liability Company duly organized and authorized to do business in the State

of New Hampshire. East Coast Restaurant & Nightclubs, LLC does business as

Millennium Cabaret at 390 South River Road in Bedford, New Hampshire.
17. Plaintiff Benelux Corporation is a Texas Corporation duly organized and

authorized to do business in the State of Texas. Benelux Corporation does business

as The Palazio at 501 Ben White Blvd. in Austin, Texas.
18. Plaintiff Filosadelfia, LLC is a Pennsylvania Limited Liability Company

duly organized and authorized to do business in the Commonwealth of Philadelphia.

Case 2:21-cv-00447-LA Filed 04/07/21 Page 5 of 200 Document 1
Filosadelfia, LLC does business as Sin City at 6130 West Passyunk Ave. in

Philadelphia, Pennsylvania.
19. Plaintiff MAG Pitt LP is a Pennsylvania Limited Partnership duly

organized and authorized to do business in the Commonwealth of Pennsylvania. MAG

Pitt LP does business as Cheerleaders Gentlemen’s Club at 3100 Liberty Ave in

Pittsburgh, Pennsylvania.
20. Plaintiff MAG Enterprises Inc. is a Pennsylvania Corporation duly

organized and authorized to do business in the Commonwealth of Pennsylvania. MAG

Enterprises Inc. does business as Cheerleaders Gentlemen’s Club at 2740 South Fort

Street in Philadelphia, Pennsylvania.
21. Plaintiff 2740 Corporation is a Pennsylvania Corporation duly

organized and authorized to do business in the Commonwealth of Pennsylvania. 2740

Corporation does business as Cheerleaders Gentlemen’s Club at 2740 South Fort
Street in Philadelphia, Pennsylvania.

22. Plaintiff MAG Entertainment, LLC is a New Jersey Limited Liability

Company duly organized and authorized to do business in the State of New Jersey.

MAG Entertainment, LLC does business as Cheerleaders Gentlemen’s Club at 54
Crescent Blvd. in Gloucester City, New Jersey.

23. Plaintiff Oasis On Essington, Limited, LLC is a Pennsylvania Limited

Liability Company duly organized and authorized to do business in the

Commonwealth of Pennsylvania. Oasis On Essington, Limited, LLC does business as
Cheerleaders Gentlemen’s Club at 6800 Essington Ave. in Philadelphia,

Pennsylvania.

24. Plaintiff Burch Management Company, Inc. is a Texas corporation duly
organized and authorized to do business in the State of Texas. Burch Management

Company, Inc. is located at 10723 Composite Drive in Dallas, Texas.

Case 2:21-cv-00447-LA Filed 04/07/21 Page 6 of 200 Document 1
25. Plaintiff BDS Restaurant, Inc. is a Texas Corporation duly organized

and authorized to do business in the State of Texas. BDS Restaurant, Inc. does
business as Baby Dolls Topless Saloon at 10250 Shady Trail in Dallas, Texas.

26. Plaintiff DB Entertainment, Inc. is a Texas Corporation duly organized

and authorized to do business in the State of Texas. DB Entertainment, Inc. does

business as Baby Dolls – Fort Worth at 3601 Highway 157 in Fort Worth, Texas.
27. Plaintiff T and N Incorporated is a Texas Corporation duly organized

and authorized to do business in the State of Texas. T and N Incorporated does

business as Fare Arlington or Chicas Locas at 2711 Majesty Drive in Arlington,

Texas.
28. Plaintiff Millennium Restaurant Group, Inc. is a Texas Corporation duly

organized and authorized to do business in the State of Texas. Millennium

Restaurant Group, Inc. does business as Cabaret Royal or Chicas Locas at 10723
Composite Drive in Dallas, Texas.

29. Plaintiff Club Sinrock, LLC (“Sinrock Alaska”) is an Alaska Limited

Liability Company duly organized and authorized to do business in the State of

Alaska. Sinrock Alaska does business as Club Sinrock Anchorage at 301 West 64th
Ave. in Anchorage, Alaska.

30. Plaintiff Club Sinrock, LLC (“Sinrock Washington”) is a Washington

Limited Liability Company duly organized and authorized to do business in the State

of Washington. Sinrock Washington does business as Club Sinrock Washington at
208 SW 16th Street in Renton, Washington

31. Plaintiff Club Sinrock, LLC (“Sinrock Oregon”) is an Oregon Limited

Liability Company duly organized and authorized to do business in the State of
Oregon. Sinrock Oregon does business as Club Sinrock Oregon at 12035 NE Glisan

Street in Portland, Oregon.

Case 2:21-cv-00447-LA Filed 04/07/21 Page 7 of 200 Document 1
32. Plaintiff Club Sinrock DT, LLC is an Oregon Limited Liability Company

duly organized and authorized to do business in the State of Oregon. Club Sinrock
DT, LLC does business as Club Sinrock Downtown at 215 West Burnside Street in

Portland, Oregon.

33. Plaintiff Kimmico, Inc. is a Maryland Corporation duly organized and

authorized to do business in the State of Maryland. Kimmico, Inc. does business as
Fantasies Nightclub & Sports Bar at 5520 Pennington Ave. in Baltimore, Maryland.

34. Plaintiff Polmour, Inc. is a Texas Corporation duly organized and

authorized to do business in the State of Texas. Polmour, Inc. does business as The

Landing Strip at 745 U.S. Highway 183 South in Austin, Texas.
35. Plaintiff Sisyphian, LLC is a California Limited Liability Company duly

organized and authorized to do business in the State of California. Sisyphian, LLC

does business as Xposed Gentlemen’s Club at 8229 Canoga Ave in Canoga Park,
California.

36. Plaintiff 689 Eatery Corp. is a New York Corporation duly organized

and authorized to do business in the State of New York. 689 Eatery Corp. does

business as Satin Dolls at 689 8th Ave. in the Times Square district of New York City,
New York.

37. Plaintiff Syzygy, LLC is a California Limited Liability Company duly

organized and authorized to do business in the State of California. Syzygy, LLC does

business as the Wet Spot at 8237 Canoga Ave in Canoga Park, California.
38. Plaintiff Brookhurst Venture, LLC is a California Limited Liability

Company duly organized and authorized to do business in the State of California.

Brookhurst Venture, LLC does business as California Girls at 815 Brookhurst Street
in Anaheim, California.

39. Plaintiff City of Industry Hospitality Venture, Inc. is a California

Corporation duly organized and authorized to do business in the State of California.
8

Case 2:21-cv-00447-LA Filed 04/07/21 Page 8 of 200 Document 1
City of Industry Hospitality Venture, Inc. does business as Spearmint Rhino

Gentlemen’s Club at 15411 E. Valley Blvd in City of Industry, California.
40. Plaintiff Farmdale Hospitality Services, Inc. is a California Corporation

duly organized to do business in the State of California. Farmdale Hospitality

Services, Inc. does business as Blue Zebra at 6872 Farmdale Ave in North Hollywood,

California.
41. Plaintiff High Expectations Hospitality, LLC is a Texas Limited

Liability Company duly organized and authorized to do business in the State of

Texas. High Expectations Hospitality, LLC does business as Spearmint Rhino

Gentlemen’s Club at 10965 Composite Drive in Dallas, Texas.
42. Plaintiff Inland Restaurant Venture I, Inc. is a California Corporation

duly organized and authorized to do business in the State of California. Inland

Restaurant Venture I, Inc. does business as Spearmint Rhino Gentlemen’s Club at
15004 Oxnard Street in Van Nuys, California.

43. Plaintiff Kentucky Hospitality Venture, LLC is a Delaware Limited

Liability Company duly organized and authorized to do business in the State of

Kentucky. Kentucky Hospitality Venture, LLC does business as Spearmint Rhino
Gentlemen’s Club at 5539 Athens Boonesboro Road in Lexington, Kentucky.

44. Plaintiff L.C.M., LLC is an Idaho Limited Liability Company duly

organized and authorized to do business in the State of Idaho. L.C.M., LLC does

business Spearmint Rhino Gentlemen’s Club at 1500 W. Grove Street in Boise, Idaho.
45. Plaintiff Midnight Sun Enterprises, Inc. is a California Corporation duly

organized and authorized to do business in the State of California. Midnight Sun

Enterprises, Inc. does business as Spearmint Rhino Gentlemen’s Club at 19900 S.
Normandie Blvd in Torrance, California.

Case 2:21-cv-00447-LA Filed 04/07/21 Page 9 of 200 Document 1
46. Plaintiff Nitelife, Inc. is a Minnesota Corporation duly organized to do

business in the State of Minnesota. Nitelife, Inc. does business as Spearmint Rhino
Gentlemen’s Club at 725 S. Hennepin Ave in Minneapolis, Minnesota.

47. Plaintiff Olympic Avenue Venture, Inc. is a California Corporation duly

organized and authorized to do business in the State of California. Olympic Avenue

Venture, Inc. does business as Spearmint Rhino Gentlemen’s Club at 2020 E. Olympic
Blvd in Los Angeles, California.

48. Plaintiff The Oxnard Hospitality Services, Inc. is a California

Corporation duly organized and authorized to do business in the State of California.

The Oxnard Hospitality Services, Inc. does business as Spearmint Rhino Gentlemen’s
Club at 630 Maulhardt Ave in Oxnard, California.

49. Plaintiff Penn Ave Hospitality, LLC is a Delaware Limited Liability

Company duly organized to do business in the State of Pennsylvania. Penn Ave
Hospitality, LLC does business as Spearmint Rhino Gentlemen’s Club at 1620

Pennsylvania Ave in Pittsburgh, Pennsylvania.

50. Plaintiff Platinum SJ Enterprise is a California Limited Liability

Company duly organized and authorized to do business in the State of California.
Platinum SJ Enterprise does business as Spearmint Rhino Gentlemen’s Club at 81

W. Santa Clara Street in San Jose, California.

51. Plaintiff PNM Enterprises, Inc. is a California Corporation duly

organized to do business in the State of California. PNM Enterprises, Inc. does
business as California Girls at 1109 N. Harbor Blvd in Santa Ana, California.

52. Plaintiff Rialto Pockets, Inc. is a California Corporation duly organized

to do business in the State of California. Rialto Pockets, Inc. does business as
Spearmint Rhino Gentlemen’s Club at 312 S. Riverside Ave in Rialto, California.

53. Plaintiff Rouge Gentlemen’s Club, Inc. is a California Corporation duly

organized and authorized to do business in the State of California. Rouge Gentlemen’s
10

Case 2:21-cv-00447-LA Filed 04/07/21 Page 10 of 200 Document 1
Club, Inc. does business as Dames N’ Games Topless Sports Bar at 14626 Ramer

Street in Van Nuys, California.
54. Plaintiff Santa Barbara Hospitality Services, Inc. is a California

Corporation duly organized to do business in the State of California. Santa Barbara

Hospitality Services, Inc. does business as Spearmint Rhino Gentlemen’s Club at 22

E. Montecito Street in Santa Barbara California.
55. Plaintiff Santa Maria Restaurant Enterprises, Inc. is a California

Corporation duly organized to do business in the State of California. Santa Maria

Restaurant Enterprises, Inc. does business as Spearmint Rhino Gentlemen’s Club at

505 S. Broadway in Santa Maria, California.
56. Plaintiff Saries Lounge, LLC is an Iowa Limited Liability Company duly

organized and authorized to do business in the State of Iowa. Saries Lounge, LLC

does business as Spearmint Rhino Gentlemen’s Club at 2449 North 13th Street in
Carter Lake, Iowa.

57. Plaintiff The Spearmint Rhino Companies Worldwide, Inc. is a Nevada

Corporation duly organized and authorized to do business in the State of California.

The Spearmint Rhino Companies Worldwide, Inc. is located at 1875 Tandem Way in
Norco, California.

58. Plaintiff Spearmint Rhino Consulting Worldwide, Inc. is a Delaware

Corporation duly organized and authorized to do business in the State of California.

Spearmint Rhino Consulting Worldwide, Inc.is located at 1875 Tandem Way in
Norco, California.

59. Plaintiff Washington Management, LLC is a California Limited

Liability Company duly organized and authorized to do business in the State of
California. Washington Management, LLC does business as Dames N’ Games at 2319

E. Washington Blvd in Los Angeles California.

Case 2:21-cv-00447-LA Filed 04/07/21 Page 11 of 200 Document 1
60. Plaintiff W.P.B. Hospitality, LLC is a Florida Limited Liability

Company duly organized to do business in the State of Florida. W.P.B. Hospitality,
LLC does business as Spearmint Rhino Gentlemen’s Club at 2145 Zip Code Place in

West Palm Beach, Florida.

61. Plaintiff K-Kel, Inc. is a Nevada Corporation duly organized and

authorized to do business in the State of Nevada. K-Kel, Inc. does business as The
Spearmint Rhino Adult Cabaret at 3340 S. Highland Drive in Las Vegas, Nevada.

Defendants

62. Defendant United States Small Business Administration (the “SBA”) is

an independent federal agency created and authorized pursuant to 15 U.S.C. § 633,
et seq. The SBA maintains a branch office at 310 West Wisconsin Ave. in Milwaukee,

Wisconsin, which is within the Eastern District of Wisconsin.

63. Defendant Isabel Casillas Guzman (“Guzman,” or the “Administrator”)
is the Administrator of the SBA, a Cabinet-level position, and is sued in her official

capacity only, as the Administrator of the SBA.

64. Authority to sue the Administrator is granted by 15 U.S.C. § 634(b),

which states, in part:

In the performance of, and with respect to, the functions, powers, and
duties vested in him by this chapter the Administrator may—(1) sue and
be sued in any court of record of a State having general jurisdiction, or
in any United States district court, and jurisdiction is conferred upon
such district court to determine such controversies without regard to the
amount in controversy . . . .

65. Defendant Janet Yellen (“Yellen,” or the “Secretary”) is the Secretary of

the Treasury Department (the “Treasury”) of the United States of America, and is

sued in her official capacity only as the Secretary of the Treasury Department.
66. Defendant United States of America is a sovereign nation dedicated to

the protection of life, liberty, and property as set forth in the Bill of Rights and other

provisions and amendments to the Constitution of the United States.
12

Case 2:21-cv-00447-LA Filed 04/07/21 Page 12 of 200 Document 1
67. Plaintiffs do not seek damages and pray only for declaratory and

injunctive relief under 5 U.S.C. § 701, et seq. in order to restrain the actions of the
SBA, the Administrator, and the Secretary in each of their official capacities.

RELEVANT STATUTORY PROVISIONS
AND ADMINISTRATIVE REGULATIONS

68. Congress created the SBA on July 30, 1953. Small Business Act of 1953,
Pub. L. 83-163, tit. II, 67 Stat. 232, et seq., (1953); see also

https://www.sba.gov/document/policy-guidance--small-business-act (last visited Mar.

24, 2021).

69. In 1953, the SBA promulgated a rule known as the “Opinion Molder
Rule,” which, with few exceptions, provided that “no business loan may be made to

an applicant engaged in the ‘creation, origination, expression, dissemination,

propagation or distribution of ideas, values, thoughts, opinions or similar intellectual
property regardless of medium, form or content.’” Business Loan Policy—Media

Policy Rule, 59 Fed. Reg. 15872 (Proposed, Apr. 5, 1994), 1994 WL 109887 (quoting

13 C.F.R. § 120.101-2(b) (1993)). The reasoning behind for this rule was threefold:

First, the prohibition is based upon SBA's desire to avoid any possible
accusation that the Government is attempting to control editorial
freedom by subsidizing media or communication for political or
propaganda purposes. Second, the Agency has generally sought to avoid
Government identification through its business assistance programs
with concerns which might publish or produce matters of a religious or
controversial nature. Third, SBA recognizes that the constitutionally
protected rights of freedom of speech and press ought not to be
compromised either by the fear of Government reprisal or by the
expectation of Government financial assistance.

59 Fed. Reg. 15872, 1994 WL 109887.

70. On April 5, 1994, the SBA promulgated a Proposed Rule to repeal the
Opinion Molder Rule “primarily in order to make assistance available to a larger

universe of small businesses” because the SBA “considered whether the policy

determinations which where [sic] the underpinnings of the former rule should be
13

Case 2:21-cv-00447-LA Filed 04/07/21 Page 13 of 200 Document 1
maintained” and, “[a]fter careful review, [the] SBA is persuaded that repeal is

appropriate.” Policy Rule, 59 Fed. Reg. 15873 (Proposed, Apr. 5, 1994), 1994 WL
109887. About three months later, the SBA promulgated a final rule repealing its

Opinion Molder Rule.

71. On July 15, 1994, the SBA repealed its “Opinion Molder Rule.” The

Opinion Molder Rule, in broad terms, had precluded communication-related
businesses from receiving SBA aid. See Media Policy Rule, 59 Fed. Reg. 36042 (Final,

Jul. 15, 1994), 1994 WL 364161.

72. A true and accurate copy of Business Loan Policy—Media Policy Rule,

59 Fed. Reg. 15872-73 (Proposed, Apr. 5, 1994) is attached hereto as Exhibit A and
is hereby incorporated by reference as though fully set forth herein.

73. A true and accurate copy of Media Policy Rule, 59 Fed. Reg. 36042-45

(Final, Jul. 15, 1994), 1994 WL 364161 which repealed the Opinion Molder Rule, is
attached hereto as Exhibit B and is hereby incorporated by reference as though fully

set forth herein.

74. In response to the SBA’s repeal of the Opinion Molder Rule, Congress

undertook to revise the Small Business Administration’s enabling Act by, among
other things, adding Subsection (e) to Section 633 of Title 15 of the United States

Code (hereafter, the “Statutory Obscenity Loan Ban”), which the President of the

United States of America signed into law on October 22, 1994, via the Small Business

Reauthorization and Amendments Act of 1994, Pub. L. 103-403 (1994). The Statutory
Obscenity Loan Ban, in its entirety, reads:

(e) Prohibition on provision of assistance

Notwithstanding any other provision of law, the Administration is
prohibited from providing any financial or other assistance to any
business concern or other person engaged in the production or
distribution of any product or service that has been determined to be
obscene by a court of competent jurisdiction.

15 U.S.C. § 633(e).
14

Case 2:21-cv-00447-LA Filed 04/07/21 Page 14 of 200 Document 1
75. The legislative history of the Small Business Reauthorization and

Amendments Act of 1994, Pub. L. 103,403 (1994), as it pertains to the Statutory
Obscenity Loan Ban, states, in relevant part:

During Committee markup of the bill, Senator Pressler offered an
amendment, that was unanimously accepted by the Committee, to
prohibit the Administration from providing assistance to businesses
engaged in the production and distribution of obscene products or
services. The amendment was offered in response to the
Administration's recent repeal of its “opinion molder rule” promulgated
in 1953. Under that rule, the Administration, with few exceptions, could
not provide assistance to small businesses engaged in the “creation,
origination, expression, dissemination, propagation or distribution of
ideas, values, thought, opinions or similar intellectual property,
regardless of medium, form, or content” (13 CFR 120.101–2(b)). With the
repeal of the rule, businesses such as newspapers, movie theaters, radio
stations and bookstores now are eligible for Administration assistance.
However, members of the Committee were concerned a blanket repeal
of the rule would allow businesses involved in the production and
distribution of obscene products and services to seek Administration
support and that the agency would have no means by which to deny such
loans or other assistance. Senator Pressler's amendment makes it clear
the Administration is not authorized to provide any assistance to those
engaged in “obscene” businesses (and thus not entitled to First
Amendment protection) as defined by the U.S. Supreme Court.

S. Rep. No. 103-332 § 612, at 3430-31 (1994); and

Sec. 611. Prohibition on the provision of assistance
The Senate bill prohibits the Administration from providing assistance
to businesses engaged in the production and distribution of obscene
products and services. This section was written in response to the recent
repeal of SBA's “opinion molder rule”. With the repeal of the rule,
businesses such as newspapers, movie theaters, radio stations and
bookstores now are eligible for SBA assistance. This means businesses
involved in the production and distribution of obscene products and
services also could seek Administration support. This section makes
clear that the Administration is not authorized to provide any assistance
to those engaged in any class of “obscene” business as defined by the
U.S. Supreme Court (and thus not entitled to First Amendment
protection).

* * *
The House bill had no similar provision.

The conferees adopted the Senate provision with a clarification that any
materials in question must have been judicially determined, in either a

Case 2:21-cv-00447-LA Filed 04/07/21 Page 15 of 200 Document 1
civil or criminal action, to be legally obscene under prevailing
constitutional standards in order for the ban to apply.

H.R. Rep. No. 103-824 § 611, at 3455 (1994).

76. Attached hereto as Exhibit C is a true and accurate copy of the relevant

portions of S. Rep. No. 103-332, § 612, at 3430-31 (1994), which is incorporated herein

by reference as though fully set forth herein.
77. Attached hereto as Exhibit D is a true and accurate copy of the relevant

portions of H.R. Rep. No. 103-824, § 611, at 3455 (1994), which is incorporated herein

by reference as though fully set forth herein.

78. On December 15, 1995, the SBA promulgated a Proposed Rule entitled
“Business Loan Programs,” 60 Fed. Reg. 64356, 60, 75 (Proposed Dec. 15, 1995; to be

codified at 13 C.F.R. § 120.110) to revise its current regulatory scheme (a true and

accurate copy being attached hereto as Exhibit E and is incorporated herein by

reference as though fully set forth herein), which reads, in relevant part:

SBA field office personnel and others also have sought guidance on the
eligibility of small businesses which sell sexually oriented products or
services, or engage in sexually oriented activities. The present
regulation is silent regarding obscene, pornographic, or sexually
oriented activities. A business engaging in any such activity that is
illegal is ineligible under § 120.110(h) of this regulation. However, SBA
receives inquiries regarding businesses engaged in activities which,
while not illegal, may be considered by the average person to be obscene
or pornographic.

‘‘Obscene’’ material is not protected by the First Amendment. It has been
defined by the United States Supreme Court in the context of a criminal
case, Miller v. California, 413 U.S. 15, 24 (1973), as follows: ‘‘* * *
whether a work which depicts or describes sexual conduct is obscene is
[determined by] whether the average person, applying contemporary
community standards, would find that the work, taken as a whole,
appeals to the prurient interest, whether the work depicts or describes,
in a patently offensive way, sexual conduct specifically defined by the
applicable state law, and whether the work, taken as a whole, lacks
serious literary, artistic, political, or scientific value.’’
Under Supreme Court precedent, ‘‘[w]hen the government appropriates
funds to establish a program, it is entitled to define the limits of that
program.’’ Rust v. Sullivan, 114 L.Ed.2d 233, 256 (1991). In
implementing its programs, SBA must also follow the Congressional
mandate set forth in Section 4(d) of the Small Business Act (15 U.S.C.
16

Case 2:21-cv-00447-LA Filed 04/07/21 Page 16 of 200 Document 1
633(d)) (‘‘the Act’’) to consider the public interest in granting or denying
an application for SBA financial assistance.

Having considered the legal precedent and the Congressional mandate,
SBA has determined that it may exclude small businesses engaging in
lawful activities of an obscene, pornographic, or prurient sexual nature.
Under the proposed rule, SBA would not provide financial assistance to
small businesses which present live performances of a prurient sexual
nature or which derive significant gross revenue from the sale, on a
regular basis, of products or services, or the presentation of depictions
or displays, of a pornographic, obscene, or prurient sexual nature. Thus,
an establishment featuring nude dancing, or a book, magazine or video
store containing merchandise of a prurient sexual nature would not be
eligible for SBA financial assistance if the obscene, pornographic, or
prurient activity contributed to the generation of a significant portion of
the gross revenue of the business.

SBA considers this proposed rule to be consistent with its obligation to
direct its limited resources and financial assistance to small businesses
in ways which will best accomplish SBA’s mission, serve its
constituency, and serve the public interest. Applicants’ First
Amendment freedoms are in no way abridged. They may still express
their views, exercise their freedoms, operate their businesses, and
obtain any other aid available to them.

60 Fed. Reg. 64360.

79. The SBA adopted its December 15, 1995, proposed rule entitled

“Business Loan Programs” as a Final Rule, after a notice and comment period, on

January 31, 1996, through its Final Rule, Business Loan Program, 61 Fed. Reg. 3226,
et seq. (Jan. 31, 1996) (to be codified at 13 C.F.R. §§ 108, 116, 120, 122, 131); a copy

being attached hereto as Exhibit F and incorporated herein by reference as though

fully set forth herein.

80. A true and accurate copy of the current SBA Business Loan Ineligible
Businesses Rule, 13 C.F.R. § 120.110 (2021), is attached hereto as Exhibit G is

herein by reference as though fully set forth herein, and reads, in relevant part:

13 C.F.R. § 120.110 provides, in part:

What businesses are ineligible for SBA business loans?
The following type of businesses are ineligible:

* * *

Case 2:21-cv-00447-LA Filed 04/07/21 Page 17 of 200 Document 1
(p) Businesses which:

(1) Present live performances of a prurient sexual nature; or

2) 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;

13 C.F.R. § 120.110 (2021). These provisions are hereafter referred to simply as the

“Regulation.”

81. A true and accurate copy of relevant excerpts of the SBA Standard

Operating Procedure 50 10 5(K) – Lender and Development Company Loan Programs

(Apr. 1, 2019), are attached hereto as Exhibit H and are incorporated herein by
reference as though fully set forth herein.

82. The SBA Standard Operating Procedure 50 10 5(K) – Lender and

Development Company Loan Programs (Apr. 1, 2019) provides, in part, at Ch.2

(III)(A):

15. Businesses Providing Prurient Sexual Material (13 CFR § 120.110
(p))

a. A business is not eligible for SBA assistance if:

i. It presents live or recorded performances of a prurient
sexual nature; or

ii. It derives more than 5% of its gross revenue, directly or
indirectly, through the sale of products, services or the
presentation of any depictions or displays of a prurient
sexual nature.
b. SBA has determined that financing lawful activities of a
prurient sexual nature is not in the public interest. The Lender
must consider whether the nature and extent of the sexual
component causes the business activity to be prurient.

c. If a Lender finds that the Applicant may have a business aspect
of a prurient sexual nature, prior to submitting an application to
the LGPC (non-delegated) or requesting a loan number
(delegated), the Lender must document and submit the analysis
and supporting documentation to the Associate General Counsel
for Litigation at PSMReview@sba.gov for a final Agency decision
on eligibility. Upon approval by SBA, the Lender may submit the
application to the LGPC or may proceed to process the loan under
18

Case 2:21-cv-00447-LA Filed 04/07/21 Page 18 of 200 Document 1
its delegated authority. A non-delegated Lender must submit a
copy of SBA’s approval with the application to the LGPC. A
delegated Lender must retain its analysis, supporting
documentation, and evidence of SBA’s approval in its loan file and
must submit the analysis and supporting documentation to SBA
with any request for guaranty purchase. SBA also may review
such documentation when conducting Lender oversight activities.

These provisions are hereinafter referred to simply as the “SOP.”

83. On March 28, 2020, the President signed the CARES Act into law which,
among other things, created the PPP.

84. The PPP instructs the SBA to promulgate rules as follows:

SEC. 1114. EMERGENCY RULEMAKING AUTHORITY.
Not later than 15 days after the date of the enactment of this Act, the
Administrator shall issue regulations to carry out this title and the
amendments made by this title without regard to the notice
requirements under section 553(b) of title 5, Unites States Code.

Pub. L. 116-136 § 1114; codified as 15 U.S.C. § 9012.

85. The CARES Act specifically tasked the SBA with administering the

PPP. The PPP further provides:

(I) In general

For purposes of making covered loans for the purposes described in
clause (i), a lender approved to make loans under this subsection shall
be deemed to have been delegated authority by the Administrator to
make and approve covered loans, subject to the provisions of this
paragraph.

(II) Considerations
In evaluating the eligibility of a borrower for a covered loan with the
terms described in this paragraph, a lender shall consider whether the
borrower—

(aa) was in operation on February 15, 2020; and

(bb)(AA) had employees for whom the borrower paid salaries and payroll
taxes; or
(BB) paid independent contractors, as reported on a Form 1099-MISC.

(iii) Additional lenders

Case 2:21-cv-00447-LA Filed 04/07/21 Page 19 of 200 Document 1
The authority to make loans under this paragraph shall be extended to
additional lenders determined by the Administrator and the Secretary
of the Treasury to have the necessary qualifications to process, close,
disburse and service loans made with the guarantee of the
Administration.
15 U.S.C. § 636(a)(36)(F)(ii).

86. Pursuant to the PPP, the SBA did, in fact, promulgate numerous

regulations.
87. On April 15, 2020, the SBA published, in the Federal Register, 85 Fed.

Reg. 20811-17 (Interim Final Rule, Apr. 15, 2020), an Interim Final Rule titled

“Business Loan Program Temporary Changes; Paycheck Protection Program,” which

is attached hereto as Exhibit I and incorporated herein by reference as though fully
set forth herein, and which reads, in relevant part:

Businesses that are not eligible for PPP loans are identified in 13 CFR
120.110 and described further in SBA’s Standard Operating Procedure
(SOP) 50 10, Subpart B, Chapter 2, except that nonprofit organizations
authorized under the Act are eligible. (SOP 50 10 can be found at
https://www.sba.gov/ document/sop-50-10-5-lenderdevelopment-
company-loan-programs.).

85 Fed. Reg. 20812 (Apr. 15, 2020).

88. On April 15, 2020, the SBA published, in the Federal Register, 85 Fed.
Reg. 20817-21 (Interim Final Rule, Apr. 15, 2020), an Interim Final Rule titled

“Business Loan Program Temporary Changes; Paycheck Protection Program,” which

is attached hereto as Exhibit J and incorporated herein by reference as though fully

set forth herein, and which reads, in relevant part:

This rule exempts otherwise qualified faith-based organizations from
the SBA’s affiliation rules, including those set forth in 13 CFR part 121,
where the application of the affiliation rules would substantially burden
those organizations’ religious exercise.

* * *
The Administrator has also concluded that she does not have a
compelling interest in denying emergency assistance to faith-based
organizations that are facing the same economic hardship to which the

Case 2:21-cv-00447-LA Filed 04/07/21 Page 20 of 200 Document 1
CARES Act responded and who would be eligible for PPP but for their
faith-based organizational and associational decisions.

* * *
In light of these exemptions, it is difficult to maintain that denying relief
to these faith-based organizations is necessary to further a compelling
government interest, let alone the least restrictive means of doing so.

85 Fed. Reg. 20819.

89. In its April 15, 2020, Interim Final Rule (85 Fed. Reg. 20817-21)

(Exhibit J), the SBA classified the PPP as a benefit program:

The affiliation rules would deny an important benefit (participation in a
program for which they would otherwise be eligible under the CARES
Act) because of the exercise of sincere religious belief (affiliation with
other religious entities).

85 Fed. Reg. 20819 (all clarifications in original).

90. On April 20, 2020, the SBA published, in the Federal Register, 85 Fed.

Reg. 21747-52 (Interim Final Rule, Apr. 20, 2020), an Interim Final Rule titled
“Business Loan Program Temporary Changes; Paycheck Protection Program—

Additional Eligibility Criteria and Requirements for Certain Pledges of Loans,” which

is attached hereto as Exhibit K and incorporated herein by reference as though fully
set forth herein, and which reads, in relevant part:

b. Are businesses that receive revenue from legal gaming eligible for a
PPP Loan?

A business that is otherwise eligible for a PPP Loan is not rendered
ineligible due to its receipt of legal gaming revenues if the existing
standard in 13 CFR 120.110(g) is met or the following two conditions are
satisfied: (a) The business’s legal gaming revenue (net of payouts but not
other expenses) did not exceed $1 million in 2019; and (b) legal gaming
revenue (net of payouts but not other expenses) comprised less than 50
percent of the business’s total revenue in 2019. Businesses that received
illegal gaming revenue are categorically ineligible. The Administrator,
in consultation with the Secretary, believes this test appropriately
balances the longstanding policy reasons for limiting lending to
businesses primarily and substantially engaged in gaming activity with
the policy aim of making the PPP Loan available to a broad segment of
U.S. businesses and their employees.

Case 2:21-cv-00447-LA Filed 04/07/21 Page 21 of 200 Document 1
85 Fed. Reg. 21751 (all clarifications in original).

91. A few days later, on April 28, 2020, the SBA published, in the Federal
Register, 85 Fed. Reg. 23450-52 (Interim Final Rule, Apr. 28, 2020), an Interim Final

Rule titled “Business Loan Program Temporary Changes; Paycheck Protection

Program—Requirements—Promissory Notes, Authorizations, Affiliation, and

Eligibility,” which is attached hereto as Exhibit L and incorporated herein by
reference as though fully set forth herein, and which expanded gambling

establishments’ eligibility and reads, in relevant part:

d. Part III.2.b. of the Third PPP Interim Final Rule (85 FR 21747, 21751)
is revised to read as follows:
Are businesses that receive revenue from legal gaming eligible for a PPP
Loan?

A business that is otherwise eligible for a PPP Loan is not rendered
ineligible due to its receipt of legal gaming revenues, and 13 CFR
120.110(g) is inapplicable to PPP loans. Businesses that received illegal
gaming revenue remain categorically ineligible. On further
consideration, the Administrator, in consultation with the Secretary,
believes this approach is more consistent with the policy aim of making
PPP loans available to a broad segment of U.S. businesses.

85 Fed. Reg. 23451.
92. On June 30, 2020, the SBA published, in the Federal Register, 85 Fed.

Reg. 39066-68 (Interim Final Rule, Jun. 30, 2020), an Interim Final Rule titled

“Business Loan Program Temporary Changes; Paycheck Protection Program—

Certain Eligible Payroll Costs,” Which is attached hereto as Exhibit M and
incorporated herein by reference as though fully set forth herein.

93. Prior to the June 30, 2020, Interim Final Rule (85 Fed. Reg. 39066-68),

crewmembers of commercial fishing boats were “treated as independent contractors

or otherwise self-employed” and “because independent contractors have the ability to
apply for a PPP loan on their own, they [the crewmembers] do not count for purposes

of another applicant’s PPP loan calculation.” 85 Fed. Reg. 39066 (clarification added).

Case 2:21-cv-00447-LA Filed 04/07/21 Page 22 of 200 Document 1
In other words, prior to this Interim Final Rule, boat owners could not count the

payments made to their crewmembers as payroll costs for the PPP because the
crewmembers were themselves eligible for a PPP. The SBA’s June 30, 2020, Interim

Final Rule revised that:

The Administrator, in consultation with the Secretary, has determined
that the relationship of a fishing boat owner and a crewmember
described in Section 3121(b)(20) of the Code is analogous to a joint
venture or partnership.

* * *

Accordingly, as described below, this interim final rule (1) provides that
a fishing boat owner may include compensation reported on Box 5 of
Form 1099–MISC and paid to a crewmember described in Section
3121(b)(20) as a payroll cost in its PPP loan application, and (2)
addresses a fishing boat owner’s eligibility to obtain loan forgiveness of
payroll costs paid to a crewmember who has obtained his or her own
PPP loan.

85 Fed. Reg. 39066-67.

94. On January 27, 2021, the President signed the 2021 Appropriations Act

into law, which, among other things, created the Second Draw PPP and which is

largely codified at 15 U.S.C. § 636(a)(37).

95. The Second Draw PPP provisions of the 2021 Appropriation Act states:

Except as otherwise provided in this paragraph, the Administrator may
guarantee covered loans to eligible entities under the same terms,
conditions, and processes as a loan made under paragraph [15 U.S.C. §
636(a)](36).

15 U.S.C. § 636(a)(37)(B) (clarification added).

96. The 2021 Appropriation Act provides, in regard to Second Draw PPP

eligibility:

(iv) the term “eligible entity”—
(III) does not include—

(aa) any entity that is a type of business concern (or would be, if such
entity were a business concern) described in section 120.110 of title 13,
Code of Federal Regulations (or in any successor regulation or other
23

Case 2:21-cv-00447-LA Filed 04/07/21 Page 23 of 200 Document 1
related guidance or rule that may be issued by the Administrator) other
than a business concern described in subsection (a) or (k) of such section;
or

(bb) any business concern or entity primarily engaged in political or
lobbying activities, which shall include any entity that is organized for
research or for engaging in advocacy in areas such as public policy or
political strategy or otherwise describes itself as a think tank in any
public documents;

(cc) any business concern or entity—
(AA) for which an entity created in or organized under the laws of the
People's Republic of China or the Special Administrative Region of Hong
Kong, or that has significant operations in the People's Republic of
China or the Special Administrative Region of Hong Kong, owns or
holds, directly or indirectly, not less than 20 percent of the economic
interest of the business concern or entity, including as equity shares or
a capital or profit interest in a limited liability company or partnership;
or

(BB) that retains, as a member of the board of directors of the business
concern, a person who is a resident of the People's Republic of China;

(dd) any person required to submit a registration statement under
section 612 of Title 22; or
(ee) an eligible person or entity (as defined under section 24 of the
Economic Aid to Hard-Hit Small Businesses, Nonprofits, and Venues
Act) that receives a grant under such section 24;

15 U.S.C. § 636(a)(37)(A)(iv)(III). Hereafter, 15 U.S.C. § 636(37)(A)(iv)(III)(aa) shall
be referred to as the “Incorporating Statute.”

97. The 2021 Appropriation Act expanded eligibility for the Second Draw

PPP to include, as eligible businesses, churches and religious organizations:

(1) SENSE OF CONGRESS.—It is the sense of Congress that the
interim final rule of the Administration entitled ‘‘Business Loan
Program Temporary Changes; Paycheck Protection Program’’ (85 Fed.
Reg. 20817 (April 15, 2020)) properly clarified the eligibility of churches
and religious organizations for loans made under paragraph (36) of
section 7(a) of the Small Business Act (15 U.S.C. 636(a)).

2021 Appropriations Act, § 311(c), which would be ineligible under 13 C.F.R. §

120.110(k).
24

Case 2:21-cv-00447-LA Filed 04/07/21 Page 24 of 200 Document 1
98. The 2021 Appropriation Act expanded eligibility for the Second Draw

PPP, by amending the PPP to include, as eligible businesses, certain news businesses:

(II) Eligibility of news organizations

(aa) Definition

In this subclause, the term “included business concern” means a
business concern, including any station which broadcasts pursuant to a
license granted by the Federal Communications Commission under title
III of the Communications Act of 1934 (47 U.S.C. 301 et seq.) without
regard for whether such a station is a concern as defined in section
121.105 of title 13, Code of Federal Regulations, or any successor
thereto—

(AA) that employs not more than 500 employees, or the size standard
established by the Administrator for the North American Industry
Classification System code applicable to the business concern, per
physical location of such business concern; or

(BB) any nonprofit organization or any organization otherwise subject
to section 511(a)(2)(B) of the Internal Revenue Code of 1986 that is a
public broadcasting entity (as defined in section 397(11) of the
Communications Act of 1934 (47 U.S.C. 397(11))).
(bb) Eligibility

During the covered period, an included business concern shall be eligible
to receive a covered loan if—

(AA) the included business concern is majority owned or controlled by a
business concern that is assigned a North American Industry
Classification System code beginning with 511110 or 5151 or, with
respect to a public broadcasting entity (as defined in section 397(11) of
the Communications Act of 1934 (47 U.S.C. 397(11))), has a trade or
business that falls under such a code; and

(BB) the included business concern makes a good faith certification that
proceeds of the loan will be used to support expenses at the component
of the included business concern that produces or distributes locally
focused or emergency information.
15 U.S.C. § 636(a)(36)(D)(iii)(II) (previously, 2021 Appropriations Act, § 317 (a)(2)),

which would have been ineligible under 13 C.F.R. § 120.110.

Case 2:21-cv-00447-LA Filed 04/07/21 Page 25 of 200 Document 1
99. The 2021 Appropriations Act expanded eligibility for the Second Draw

PPP, by amending the PPP to include, as eligible businesses, certain lobbying and
destination marketing businesses:

(vii) Eligibility for certain 501(c)(6) organizations

(I) In general

Any organization that is described in section 501(c)(6) of the Internal
Revenue Code and that is exempt from taxation under section 501(a) of
such Code (excluding professional sports leagues and organizations with
the purpose of promoting or participating in a political campaign or
other activity) shall be eligible to receive a covered loan if—

(aa) the organization does not receive more than 15 percent of its
receipts from lobbying activities;
(bb) the lobbying activities of the organization do not comprise more
than 15 percent of the total activities of the organization;

(cc) the cost of the lobbying activities of the organization did not exceed
$1,000,000 during the most recent tax year of the organization that
ended prior to February 15, 2020; and
(dd) the organization employs not more than 300 employees.

(II) Destination marketing organizations

Any destination marketing organization shall be eligible to receive a
covered loan if—
(aa) the destination marketing organization does not receive more than
15 percent of its receipts from lobbying activities;

(bb) the lobbying activities of the destination marketing organization do
not comprise more than 15 percent of the total activities of the
organization;
(cc) the cost of the lobbying activities of the destination marketing
organization did not exceed $1,000,000 during the most recent tax year
of the destination marketing organization that ended prior to February
15, 2020; and

(dd) the destination marketing organization employs not more than 300
employees; and
(ee) the destination marketing organization—

(AA) is described in section 501(c) of the Internal Revenue Code and is
exempt from taxation under section 501(a) of such Code; or

Case 2:21-cv-00447-LA Filed 04/07/21 Page 26 of 200 Document 1
(BB) is a quasi-governmental entity or is a political subdivision of a
State or local government, including any instrumentality of those
entities.

15 U.S.C. § 636(a)(36)(D)(vii) (previously, 2021 Appropriations Act, § 318(2)(C), which

would not have been eligible under 13 C.F.R. § 120.110.

100. The 2021 Appropriations Act expanded eligibility for the Second Draw
PPP, by amending 11 U.S.C. § 364 to include, as eligible businesses, businesses in

bankruptcy:

‘(g)(1) The court, after notice and a hearing, may authorize a debtor in
possession or a trustee that is authorized to operate the business of the
debtor under section 1183, 1184, 1203, 1204, or 1304 of this title to
obtain a loan under paragraph (36) or (37) of section 7(a) of the Small
Business Act (15 U.S.C. 636(a)), and such loan shall be treated as a debt
to the extent the loan is not forgiven in accordance with section 7A of
the Small Business Act or subparagraph (J) of such paragraph (37), as
applicable, with priority equal to a claim of the kind specified in
subsection (c)(1) of this section.

‘(2) The trustee may incur debt described in paragraph (1)
notwithstanding any provision in a contract, prior order authorizing the
trustee to incur debt under this section, prior order authorizing the
trustee to use cash collateral under section 363, or applicable law that
prohibits the debtor from incurring additional debt.

‘(3) The court shall hold a hearing within 7 days after the filing and
service of the motion to obtain a loan described in paragraph (1).
Notwithstanding the Federal Rules of Bankruptcy Procedure, at such
hearing, the court may grant relief on a final basis.’

2021 Appropriations Act, § 320(a).

101. The Second Draw PPP provisions of the 2021 Appropriations Act also
expanded the uses to which PPP funds may be applied, and forgiven, by adding,

among other provisions:

(9) the term “covered worker protection expenditure”—

(A) means an operating or a capital expenditure to facilitate the
adaptation of the business activities of an entity to comply with
requirements established or guidance issued by the Department of
Health and Human Services, the Centers for Disease Control, or the
Occupational Safety and Health Administration, or any equivalent
requirements established or guidance issued by a State or local
27

Case 2:21-cv-00447-LA Filed 04/07/21 Page 27 of 200 Document 1
government, during the period beginning on March 1, 2020 and ending
the date on which the national emergency declared by the President
under the National Emergencies Act (50 U.S.C. 1601 et seq.) with
respect to the Coronavirus Disease 2019 (COVID-19) expires related to
the maintenance of standards for sanitation, social distancing, or any
other worker or customer safety requirement related to COVID-19;

(B) may include—

(i) the purchase, maintenance, or renovation of assets that create or
expand—
(I) a drive-through window facility;

(II) an indoor, outdoor, or combined air or air pressure ventilation or
filtration system;

(III) a physical barrier such as a sneeze guard;
(IV) an expansion of additional indoor, outdoor, or combined business
space;

(V) an onsite or offsite health screening capability; or

(VI) other assets relating to the compliance with the requirements or
guidance described in subparagraph (A), as determined by the
Administrator in consultation with the Secretary of Health and Human
Services and the Secretary of Labor; and

(ii) the purchase of—

(I) covered materials described in section 328.103(a) of title 44, Code of
Federal Regulations, or any successor regulation;
(II) particulate filtering facepiece respirators approved by the National
Institute for Occupational Safety and Health, including those approved
only for emergency use authorization; or

(III) other kinds of personal protective equipment, as determined by the
Administrator in consultation with the Secretary of Health and Human
Services and the Secretary of Labor;
* * *

(11) the term “expected forgiveness amount” means the amount of
principal that a lender reasonably expects a borrower to expend during
the covered period on the sum of any—

(A) payroll costs; [and]
* * *

(H) covered worker protection expenditures;

Case 2:21-cv-00447-LA Filed 04/07/21 Page 28 of 200 Document 1
2021 Appropriations Act § 304(a) (now codified as 15 U.S.C. § 633m(a)(9) & (11).

102. Attached hereto as Exhibit N is a true and accurate copy of the relevant
portions of Congressperson Maxine Waters’ comments related to the Second Draw

PPP, 166 Cong. Rec. E1202-02 (Dec. 24, 2020), which are incorporated herein by

reference as though fully set forth herein, wherein she states, in relevant part:

I also strongly advocated for . . . a restart of the Paycheck Protection
Program (PPP) to ensure our small businesses are able to remain open.
In total, small businesses will receive $284 billion through the PPP, with
an additional $20 billion reserved for businesses operating in low-
income communities and $15 billion for live music venues, movie
theaters, and museums. These businesses are the lifeblood of our
communities, and this support is long overdue.
* * *

The Paycheck Protection Program was a lifeline for so many small
businesses through the beginning of the pandemic. It provided largely
forgivable loans to businesses that used the funds to keep their
employees on payroll and to keep the lights on at work. . . . In the first
round of PPP, more than $525 billion of forgivable loans helped over 5.2
million businesses, with more than 81 percent of those loans being for
less than $100,000, and more than 68 percent of those loans being for
less than $50,000, this program.

Building on those efforts, I am pleased that today’s bill reauthorizes and
provides over $284 billion to this program. Specifically, the legislation
provides for first draw and second draw forgivable PPP loans, expanded
eligibility for nonprofits and local newspapers, TV and radio
broadcasters, and key modifications to PPP to serve the smallest
businesses and struggling non-profits. I am also pleased the legislation
will help independent restaurants, and includes $15 billion in dedicated
funding for live venues, independent movie theaters, and cultural
institutions.

Additionally, the bill expands the expenses to which PPP funds can be
applied to include life- and enterprise-saving protective equipment for
staff and businesses.

166 Cong. Rec. E1202, 05 (Dec. 24, 2020).

103. Attached hereto as Exhibit O is a true and accurate copy of the relevant
portions of Congressperson Chabot’s comments related to the Second Draw PPP, 166

Cong. Rec. H7293 (Dec. 21, 2020), which are incorporated herein by reference as

though fully set forth herein, wherein he states, in relevant part:
29

Case 2:21-cv-00447-LA Filed 04/07/21 Page 29 of 200 Document 1
The Paycheck Protection Program, which has supported over 50 million
employees, will be reopened for new and second-time applicants. Funds
will be reserved for very small businesses and community lenders. The
list of eligible expenses will be expanded so that small business owners
can purchase PPE, for example, to keep employees and their loved ones
safe.

166 Cong. Rec. H7293 (Dec. 21, 2020).

104. The Second Draw PPP provisions of the 2021 Appropriation Act instruct
the SBA to promulgate rules as follows:

(M) Publication of guidance

Not later than 10 days after December 27, 2020, the Administrator shall
issue guidance addressing barriers to accessing capital for minority,
underserved, veteran, and women-owned business concerns for the
purpose of ensuring equitable access to covered loans.

15 U.S.C. § 636(a)(37)(M).

105. Title III, Section 303 of the 2021 Appropriations Act (also known by the
“Economic Aid to Hard-Hit Small Businesses, Nonprofits, and Venues Act”), instructs

the SBA to promulgate rules as follows:

Not later than 10 days after the date of enactment of this Act, the
Administrator shall issue regulations to carry out this Act and the
amendments made by this Act without regard to the notice
requirements under section 553(b) of title 5, United States Code.

2021 Appropriations Act, § 303 (now codified as 15 U.S.C. § 9012).

106. Pursuant to the Second Draw PPP provisions of the 2021 Appropriations

Act, the SBA did, in fact, promulgate numerous regulations.
107. On March 8, 2021, the SBA published, in the Federal Register, 86 Fed.

Reg. 13149-56 (Interim Final Rule, Mar. 8, 2021), an Interim Final Rule titled

“Business Loan Program Temporary Changes; Paycheck Protection Program—
Revisions to Loan Amount Calculation and Eligibility,” a true and accurate copy of

which is attached hereto as Exhibit P and incorporated herein by reference as

though fully set forth herein, and which:
30

Case 2:21-cv-00447-LA Filed 04/07/21 Page 30 of 200 Document 1
remove[s] the eligibility restriction that prevents businesses with owners who
have non-financial fraud felony convictions in the last year from obtaining PPP
loans and remove[s] the eligibility restriction that prevents businesses with
owners who are delinquent or in default on their Federal student loans from
obtaining PPP loans. The changes apply to both First Draw PPP Loans and
Second Draw PPP Loans.
86 Fed. Reg. 13149 (clarification added). The SBA reasoned removing these eligibility

restrictions were:

appropriate to ensure consistency with Congressional intent to provide
relief to small businesses and their employees, expand access to the
PPP, and remove barriers people with prior convictions face when
working to restart their lives and contribute to our economy. SBA has
determined that the one-year lookback restriction related to non-
financial fraud felonies should be removed and only the five-year
lookback restriction for those felonies involving fraud, bribery,
embezzlement, or a false statement in a loan application or an
application for federal financial assistance will limit an applicant’s
eligibility for the PPP. Removing the one-year lookback restriction
related to non-financial fraud felonies is consistent with Congressional
support for reducing criminal background checks in the PPP and the
important policies underlying recent criminal justice reforms in
Congress, such as last year’s Fair Chance to Compete for Jobs Act of
2019 (Pub. L. 116–92, Div. A, Tit. XI, Subtit. B,) and the First Step Act
of 2018 (Pub. L. 115–391).

* * *

By removing barriers for applicants with non-financial fraud felonies,
this interim final rule balances the need to increase access to the PPP
and remove barriers for people with prior convictions while still
ensuring basic guardrails against fraud exist for this emergency
program. Preserving the five-year lookback for financial fraudrelated
[sic] felonies is one of these guardrails.

* * *

SBA has determined that eliminating consideration of delinquent or
defaulted Federal student loans is appropriate to ensure consistency
with Congressional intent to provide relief to small businesses and their
employees and expand access to the PPP. This change will make PPP
loans available to more borrowers with financial need and is consistent
with Congress’s intent that PPP loans be prioritized for small business
concerns owned and controlled by socially and economically
disadvantaged individuals as defined in section 8(d)(3)(c) of the Small
Business Act.13 According to the Department of Eduction [sic], ‘‘Black
and Brown students rely more heavily on student loan debt than their
peers and experience delinquency at disproportionately high rates. As a
result prohibiting delinquent student loan borrowers from obtaining
PPP loans is more likely to exclude business owners of color from access
to the loans they need.’’ In addition, this change is consistent with the
31

Case 2:21-cv-00447-LA Filed 04/07/21 Page 31 of 200 Document 1
policy set in section 3513 of the CARES Act and the Department of
Education’s ongoing actions to provide economic relief to student loan
borrowers whose loans are held by the agency by suspending Federal
student loan payments and collections during the pandemic and keeping
the interest rate at 0 percent.
At the request of the Department of Education by letter dated February
27, 2021, Treasury also has granted an exemption from the bar in 31
U.S.C. 3720B and 31 CFR 285.13, with respect to PPP borrowers with
Federal student loans in delinquent status.

The change in PPP regulations relating to Federal student loans and the
Treasury exemption apply to new PPP applicants as well as those
borrowers who have already received a PPP loan. In this way, PPP
borrowers with delinquent or defaulted student loan debts are treated
equally, without regard to when they submitted their PPP application.
86 Fed. Reg. 13154-55.

108. On March 22, 2021, the SBA published, in the Federal Register, an

Interim Final Rule titled “Business Loan Program Temporary Changes; Paycheck

Protection Program as Amended by American Rescue Plan Act.” A true and accurate

copy of the Business Loan Program Temporary Changes; Paycheck Protection
Program as Amended by American Rescue Plan Act, 86 Fed. Reg. 15083-89 (Interim

Final Rule, Mar. 22, 2021) is attached hereto as Exhibit Q and is hereby incorporated

by reference as though fully set forth herein, and which provides that “[t]he intent of
the CARES Act, the Economic Aid Act, and the American Rescue Plan Act (again,

“ARPA”) is that SBA provide relief to America’s small businesses and nonprofit

organizations expeditiously.” 86 Fed. Reg. 15084.

109. On March 11, 2021, the President signed ARPA into law, which, among
other things, modified the PPP and Second Draw PPP via Section 5001 thereof.

110. A true and accurate copy of Section 5001 of ARPA is attached hereto as

Exhibit R and is incorporated herein by reference as though fully set forth herein.

111. Generally, Section 5001 of ARPA amended the PPP and Second Draw
PPP to increase eligibility for certain non-profit organizations, including non-profit

Case 2:21-cv-00447-LA Filed 04/07/21 Page 32 of 200 Document 1
organizations that conduct lobbying activities and internet publishing organizations.

Specifically, ARPA added the following to 15 U.S.C. § 36(a):

‘‘(xvii) the term ‘additional covered nonprofit entity’—

‘‘(I) means an organization described in any paragraph of section 501(c)
of the Internal Revenue Code of 1986, other than paragraph (3), (4), (6),
or (19), and exempt from tax under section 501(a) of such Code; and

‘‘(II) does not include any entity that, if the entity were a business
concern, would be described in section 120.110 of title 13, Code of
Federal Regulations (or in any successor regulation or other related
guidance or rule that may be issued by the Administrator) other than a
business concern described in paragraph (a) or (k) of such section.’’; and

(B) in subparagraph (D)—
(i) in clause (iii), by adding at the end the following:

‘‘(III) ELIGIBILITY OF CERTAIN ORGANIZATIONS.—
Subject to the provisions in this subparagraph, during the covered
period—

‘‘(aa) a nonprofit organization shall be eligible to receive a covered loan
if the nonprofit organization employs not more than 500 employees per
physical location of the organization; and

‘‘(bb) an additional covered nonprofit entity and an organization that,
but for subclauses (I)(dd) and (II)(dd) of clause (vii), would be eligible for
a covered loan under clause (vii) shall be eligible to receive a covered
loan if the entity or organization employs not more than 300 employees
per physical location of the entity or organization.’’; and
(ii) by adding at the end the following:

‘‘(ix) ELIGIBILITY OF ADDITIONAL COVERED NONPROFIT
ENTITIES.—An additional covered nonprofit entity shall be eligible to
receive a covered loan if—
‘‘(I) the additional covered nonprofit entity does not receive more than
15 percent of its receipts from lobbying activities;

‘‘(II) the lobbying activities of the additional covered nonprofit entity do
not comprise more than 15 percent of the total activities of the
organization;

‘‘(III) the cost of the lobbying activities of the additional covered
nonprofit entity did not exceed $1,000,000 during the most recent tax
year of the additional covered nonprofit entity that ended prior to
February 15, 2020; and

Case 2:21-cv-00447-LA Filed 04/07/21 Page 33 of 200 Document 1
‘‘(IV) the additional covered nonprofit entity employs not more than 300
employees.’’.

(2) ELIGIBILITY FOR SECOND DRAW LOANS.—Paragraph (37)(A)(i)
of section 7(a) of the Small Business Act (15 U.S.C. 636(a)), as added by
the Economic Aid to Hard-Hit Small Businesses, Nonprofits, and
Venues Act (title III of division N of Public Law 116–260), is amended
by inserting ‘‘ ‘additional covered nonprofit entity’,’’ after ‘‘the terms’’.

ARPA, § 5001(a)(1)(A)-(B) & (a)(2).

GENERAL ALLEGATIONS

Camelot Banquet Rooms, Inc. (“Camelot Banquet”)

112. Camelot Banquet is an alcohol-serving commercial establishment open

to the consenting adult public which has presented, presents, and desires to continue
to present in the future, live scantily clad female performance dance entertainment.

All of the entertainment presented at Camelot Banquet is expression presumptively

protected under the First Amendment to the United States Constitution and appeals

to normal, healthy, sexual desires.
113. Camelot Banquet has never been charged, let alone convicted, of any

crimes of obscenity. Similarly, none of the entertainers who have performed on

Camelot Banquet’s premises have ever been charged, let alone convicted, of any
crimes of obscenity related to their performances at Camelot Banquet.

114. Camelot Banquet is categorized as a North American Industry

Classification System (“NAICS”) code 72 entity.

115. Camelot Banquet presents lawful, constitutionally protected
entertainment in conformity with its various licenses, permits, and/or government

approvals, including but not limited to:

a. A Public Entertainment Permit issued by the City of Milwaukee

pursuant to Milwaukee City Ordinance Ch. 108; and
b. A Liquor License issued by the City of Milwaukee pursuant to

Milwaukee City Ordinance Ch. 90.

Case 2:21-cv-00447-LA Filed 04/07/21 Page 34 of 200 Document 1
116. Camelot Banquet is, as of the filing of this action, currently open for

business. As was required by the City of Milwaukee Covid-19 Pubic Health Plan
Orders, Camelot Banquet closed for business on March 16, 2020. Pursuant to evolving

orders from the City of Milwaukee it reopened after twelve weeks of closure at 25%

capacity on June 5, 2020; it then was permitted to resume 100% capacity on

September 15, 2020, but on October 29, 2020, capacity was again reduced to 50%.
Eleven weeks later, on January 15, 2021, it was permitted to resume 100% capacity

although the social distancing requirements in the Public Health Order continue to

limit the actual capacity to approximately 50%. As a direct and proximate result of

such municipal pandemic-related closures and limitations, Camelot Banquet has
suffered significant business and financial losses.

117. In order to mitigate its business losses, to provide monetary relief to its

employees (since a controlling percentage of Second Draw PPP loans must be used
for employee wages and salaries), and to be able to purchase Personal Protective

Equipment (“PPE”) and make Pandemic-related repairs and/or upgrades to its facility

(since the Second Draw PPP expanded the loan’s eligible uses), Camelot Banquet

applied for a Second Draw PPP.
118. Camelot Banquet has submitted an application for a Second Draw PPP

through its lender, which is an approved SBA lender.

119. Pursuant to 15 U.S.C. § 636(a)(36)(F)(ii)(I), 15 U.S.C. § 636(a)(37)(K),

and/or 15 U.S.C. § 636(a)(F)(iii), Camelot Banquet’s lender has operated and will
operate as a delegate of the SBA in the processing and approval or disapproval of the

Second Draw PPP sought by Camelot Banquet.

120. Camelot Banquet is fully qualified—but for the Regulation, the SOP, the
Incorporating Statute, and/or the SBA’s application of all of the same—to receive a

Second Draw PPP loan under all other relevant statutes, regulations, and procedures.

Case 2:21-cv-00447-LA Filed 04/07/21 Page 35 of 200 Document 1
121. Camelot Banquet received a First Draw PPP loan under the CARES Act

pursuant to an injunction and ruling by this Honorable Court.
122. Camelot Banquet’s lender has informed it that its Second Draw PPP

application has been placed on “Hold” by the SBA. Further, the SBA, through

correspondence of legal counsel, has invited Camelot Banquet to submit to a

“prurience review as part of the process of resolving the holds” on Camelot Banquet’s
application (as well as the applications of others-- including the other Plaintiffs here),

thereby confirming that the “Hold” on Camelot Banquet’s Second Draw PPP

application is solely predicated on the Regulation, the SOP, the Incorporating

Statute, and/or the SBA’s interpretation and/or application thereof.
123. Camelot Banquet is, through its legal counsel, aware that other similar

businesses have received correspondence from the SBA in regard to Second Draw

PPP loan applications wherein the SBA has stated: “Strip clubs remain ineligible for
PPP loans. See 13 CFR § 120.110(p).”

124. Camelot Banquet is also, through its legal counsel, aware that,

irrespective of the above, some other similar “strip clubs” have nevertheless received

Second Draw PPP loans.
125. Camelot Banquet reasonably believes, based on the information that it

has received, the information disclosed and presented in the previous proceedings

that resulted in the Regulation and SOP being enjoined and/or barred from

enforcement (much of which is detailed verbatim below), and the actions already
taken by the SBA with regard to its Second Draw PPP loan application and the

applications of other similar businesses as described both above and below (including

the applications of the other Plaintiffs here), that its Second Draw PPP application
will be rejected or fatally delayed by the SBA due to the Regulation, the SOP, the

Incorporating Statute, and/or the SBA’s application of the same.

Case 2:21-cv-00447-LA Filed 04/07/21 Page 36 of 200 Document 1
126. In the event that Camelot Banquet is unable to obtain a Second Draw

PPP, it may lack the staff, funds, and necessary PPE and facility upgrades to be able
to continue to operate given the local Pandemic-related capacity restrictions, which

may well result in the permanent ruination of its business; its inability to engage in

protected First Amendment activities; and the inability of its staff, entertainers, and

customers to continue to engage in, associate for the purposes of engaging in, and/or
view, protected First Amendment activities.

Downtown Juneau Investments, LLC (“Juneau”)

127. Juneau is an alcohol-serving commercial establishment open to the

consenting adult public which has presented, presents, and desires to continue to
present in the future, live scantily clad female performance dance entertainment. All

of the entertainment presented at Juneau is expression presumptively protected

under the First Amendment to the United States Constitution and appeals to normal,
healthy, sexual desires.

128. Juneau has never been charged, let alone convicted, of any crimes of

obscenity. Similarly, none of the entertainers who have performed on Juneau’s

premises have ever been charged, let alone convicted, of any crimes of obscenity
related to their performances at Juneau.

129. Juneau is categorized as a NAICS code 72 entity.

130. Juneau presents lawful, constitutionally protected entertainment in

conformity with its various licenses, permits, and/or government approvals, including
but not limited to:

a. A Public Entertainment Permit issued by the City of Milwaukee

pursuant to Milwaukee City Ordinance Ch. 108; and
b. A Liquor License issued by the City of Milwaukee pursuant to

Milwaukee City Ordinance Ch. 90.

Case 2:21-cv-00447-LA Filed 04/07/21 Page 37 of 200 Document 1
131. Juneau is, as of the filing of this action, currently open for business. As

was required by the City of Milwaukee Covid-19 Pubic Health Plan Orders, Juneau
closed for business on March 16, 2020. Pursuant to evolving orders from the City of

Milwaukee, it reopened after twelve weeks of closure at 25% capacity on June 5, 2020;

it then was permitted to resume 100% capacity on September 15, 2020, but on October

29, 2020, capacity was again reduced to 50%. Eleven weeks later, on January 15,
2021, it was permitted to resume 100% capacity although the social distancing

requirements in the Public Health Order continue to limit the actual capacity to

approximately 50%. As a direct and proximate result of such municipal pandemic-

related closures and limitations, Juneau has suffered significant business and
financial losses.

132. In order to mitigate its business losses, to provide monetary relief to its

employees (since a controlling percentage of Second Draw PPP loans must be used
for employee wages and salaries), and to be able to purchase PPE and make

Pandemic-related repairs and/or upgrades to its facility (since the Second Draw PPP

expanded the loan’s eligible uses), Juneau applied for a Second Draw PPP.

133. Juneau has submitted an application for a Second Draw PPP through
its lender, which is an approved SBA lender.

134. Pursuant to 15 U.S.C. § 636(a)(36)(F)(ii)(I), 15 U.S.C. § 636(a)(37)(K),

and/or 15 U.S.C. § 636(a)(F)(iii), Juneau’s lender has operated and will operate as a

delegate of the SBA in the processing and approval or disapproval of the Second Draw
PPP sought by Juneau.

135. Juneau is fully qualified—but for the Regulation, the SOP, the

Incorporating Statute, and/or the SBA’s application of all of the same—to receive a
Second Draw PPP loan under all other relevant statutes, regulations, and procedures.

136. Juneau received a First Draw PPP loan under the CARES Act pursuant

to an injunction and ruling by this Honorable Court.
38

Case 2:21-cv-00447-LA Filed 04/07/21 Page 38 of 200 Document 1
137. Juneau’s lender has informed it that its Second Draw PPP application

has been placed on “Hold” by the SBA. Further, the SBA, through correspondence of
legal counsel, has invited Juneau to submit to a “prurience review as part of the

process of resolving the holds” on Juneau’s application (as well as the applications of

others-- including the other Plaintiffs here), thereby confirming that the “Hold” on

Juneau’s Second Draw PPP application is solely predicated on the Regulation, the
SOP, the Incorporating Statute, and/or the SBA’s interpretation and/or application

thereof.

138. Juneau is, through its legal counsel, aware that other similar businesses

have received correspondence from the SBA in regard to Second Draw PPP loan
applications wherein the SBA has stated: “Strip clubs remain ineligible for PPP loans.

See 13 CFR § 120.110(p).”

139. Juneau is also, through its legal counsel, aware that, irrespective of the
above, some other similar “strip clubs” have nevertheless received Second Draw PPP

loans.

140. Juneau reasonably believes, based on the information that it has

received, the information disclosed and presented in the previous proceedings that
resulted in the Regulation and SOP being enjoined and/or barred from enforcement

(much of which is detailed verbatim below), and the actions already taken by the SBA

with regard to its Second Draw PPP loan application and the applications of other

similar businesses as described both above and below (including the applications of
the other Plaintiffs here), that its Second Draw PPP application will be rejected or

fatally delayed by the SBA due to the Regulation, the SOP, the Incorporating Statute,

and/or the SBA’s application of the same.
141. In the event that Juneau is unable to obtain a Second Draw PPP, it may

lack the staff, funds, and necessary PPE and facility upgrades to be able to continue

to operate given the local Pandemic-related capacity restrictions, which may well
39

Case 2:21-cv-00447-LA Filed 04/07/21 Page 39 of 200 Document 1
result in the permanent ruination of its business; its inability to engage in protected

First Amendment activities; and the inability of its staff, entertainers, and customers
to continue to engage in, associate for the purposes of engaging in, and/or view,

protected First Amendment activities.

Midrad, LLC (“Midrad”)

142. Midrad is an alcohol-serving commercial establishment open to the
consenting adult public which has presented, presents, and desires to continue to

present in the future, live female performance dance entertainment that is, at times,

fully clothed, topless, and/or fully nude. All of the entertainment presented at Midrad

is expression presumptively protected under the First Amendment to the United
States Constitution and appeals to normal, healthy, sexual desires.

143. Midrad has never been charged, let alone convicted, of any crimes of

obscenity. Similarly, none of the entertainers who have performed on Midrad’s
premises have ever been charged, let alone convicted, of any crimes of obscenity

related to their performances at Midrad.

144. Midrad is categorized as a NAICS code 72 entity.

145. Midrad presents lawful, constitutionally protected entertainment in
conformity with its various licenses, permits, and/or government approvals, including

but not limited to:

a. A Liquor License issued by the Town of Middleton; and

b. A Dance Hall Permit issued by the Town of Middleton.
146. Midrad is, as of the filing of this action, currently open for business. As

was required by Dane County and the City of Madison Covid-19 Pubic Health Plan

Orders, Midrad closed for business on March 16, 2020; pursuant to evolving orders
from the City of Madison it reopened after eleven weeks of closure at 25% capacity on

May 29, 2020. After over nine months of being restricted to 25% capacity, Midrad was

permitted to resume 50% capacity on March 10, 2021. As a direct and proximate
40

Case 2:21-cv-00447-LA Filed 04/07/21 Page 40 of 200 Document 1
result of such municipal pandemic-related closures and limitations, Midrad has

suffered significant business and financial losses.
147. In order to mitigate its business losses, to provide monetary relief to its

employees (since a controlling percentage of Second Draw PPP loans must be used

for employee wages and salaries), and to be able to purchase PPE and make

Pandemic-related repairs and/or upgrades to its facility (since the Second Draw PPP
expanded the loan’s eligible uses), Midrad applied for a Second Draw PPP.

148. Midrad has submitted an application for a Second Draw PPP through

its lender, which is an approved SBA lender.

149. Pursuant to 15 U.S.C. § 636(a)(36)(F)(ii)(I), 15 U.S.C. § 636(a)(37)(K),
and/or 15 U.S.C. § 636(a)(F)(iii), Midrad’s lender has operated and will operate as a

delegate of the SBA in the processing and approval or disapproval of the Second Draw

PPP sought by Midrad.
150. Midrad is fully qualified—but for the Regulation, the SOP, the

Incorporating Statute, and/or the SBA’s application of all of the same—to receive a

Second Draw PPP loan under all other relevant statutes, regulations, and procedures.

151. Midrad received a First Draw PPP loan under the CARES Act pursuant
to an injunction and ruling by this Honorable Court.

152. Midrad’s lender has informed it that its Second Draw PPP application

has been placed on “Hold” by the SBA. Further, the SBA, through correspondence of

legal counsel, has invited Midrad to submit to a “prurience review as part of the
process of resolving the holds” on Midrad’s application (as well as the applications of

others-- including the other Plaintiffs here), thereby confirming that the “Hold” on

Midrad’s Second Draw PPP application is solely predicated on the Regulation, the
SOP, the Incorporating Statute, and/or the SBA’s interpretation and/or application

thereof.

Case 2:21-cv-00447-LA Filed 04/07/21 Page 41 of 200 Document 1
153. Midrad is, through its legal counsel, aware that other similar businesses

have received correspondence from the SBA in regard to Second Draw PPP loan
applications wherein the SBA has stated: “Strip clubs remain ineligible for PPP loans.

See 13 CFR § 120.110(p).”

154. Midrad is also, through its legal counsel, aware that, irrespective of the

above, some other similar “strip clubs” have nevertheless received Second Draw PPP
loans.

155. Midrad reasonably believes, based on the information that it has

received, the information disclosed and presented in the previous proceedings that

resulted in the Regulation and SOP being enjoined and/or barred from enforcement
(much of which is detailed verbatim below), and the actions already taken by the SBA

with regard to its Second Draw PPP loan application and the applications of other

similar businesses as described both above and below (including the applications of
the other Plaintiffs here), that its Second Draw PPP application will be rejected or

fatally delayed by the SBA due to the Regulation, the SOP, the Incorporating Statute,

and/or the SBA’s application of the same.

156. In the event that Midrad is unable to obtain a Second Draw PPP, it may
lack the staff, funds, and necessary PPE and facility upgrades to be able to continue

to operate given the local Pandemic-related capacity restrictions, which may well

result in the permanent ruination of its business; its inability to engage in protected

First Amendment activities; and the inability of its staff, entertainers, and customers
to continue to engage in, associate for the purposes of engaging in, and/or view,

protected First Amendment activities.

PPH Properties I, LLC (“PPH”)
157. PPH is an alcohol-serving commercial establishment open to the

consenting adult public which has presented, presents, and desires to continue to

present in the future, live scantily clad female performance dance entertainment. All
42

Case 2:21-cv-00447-LA Filed 04/07/21 Page 42 of 200 Document 1
of the entertainment presented at PPH is expression presumptively protected under

the First Amendment to the United States Constitution and appeals to normal,
healthy, sexual desires.

158. PPH has never been charged, let alone convicted, of any crimes of

obscenity. Similarly, none of the entertainers who have performed on PPH’s premises

have ever been charged, let alone convicted, of any crimes of obscenity related to their
performances at PPH.

159. PPH is categorized as a NAICS code 72 entity.

160. PPH presents lawful, constitutionally protected entertainment in

conformity with its various licenses, permits, and/or government approvals, including
but not limited to:

a. A Public Entertainment Permit issued by the City of Milwaukee

pursuant to Milwaukee City Ordinance Ch. 108; and
b. A Liquor License issued by the City of Milwaukee pursuant to

Milwaukee City Ordinance Ch. 90.

161. PPH is, as of the filing of this action, currently open for business. As

was required by and the City of Milwaukee Covid-19 Pubic Health Plan Orders, PPH
closed for business on March 16, 2020. Pursuant to evolving orders from the City of

Milwaukee it reopened after twelve weeks of closure at 25% capacity on June 5, 2020;

it then was permitted to resume 100% capacity on September 15, 2020, but on October

29, 2020, capacity was again reduced to 50%. Eleven weeks later, on January 15,
2021, it was permitted to resume 100% capacity although the social distancing

requirements in the Public Health Order continue to limit the actual to

approximately 50%. As a direct and proximate result of such municipal pandemic-
related closures and limitations, PPH has suffered significant business and financial

losses.

Case 2:21-cv-00447-LA Filed 04/07/21 Page 43 of 200 Document 1
162. In order to mitigate its business losses, to provide monetary relief to its

employees (since a controlling percentage of Second Draw PPP loans must be used
for employee wages and salaries), and to be able to purchase PPE and make

Pandemic-related repairs and/or upgrades to its facility (since the Second Draw PPP

expanded the loan’s eligible uses), PPH applied for a Second Draw PPP.

163. PPH has submitted an application for a Second Draw PPP through its
lender, which is an approved SBA lender.

164. Pursuant to 15 U.S.C. § 636(a)(36)(F)(ii)(I), 15 U.S.C. § 636(a)(37)(K),

and/or 15 U.S.C. § 636(a)(F)(iii), PPH’s lender has operated and will operate as a

delegate of the SBA in the processing and approval or disapproval of the Second Draw
PPP sought by PPH.

165. PPH is fully qualified—but for the Regulation, the SOP, the

Incorporating Statute, and/or the SBA’s application of all of the same—to receive a
Second Draw PPP loan under all other relevant statutes, regulations, and procedures.

166. PPH received a First Draw PPP loan under the CARES Act pursuant to

an injunction and ruling by this Honorable Court.

167. PPH’s lender has informed it that its Second Draw PPP application has
been placed on “Hold” by the SBA. Further, the SBA, through correspondence of legal

counsel, has invited PPH to submit to a “prurience review as part of the process of

resolving the holds” on PPH’s application (as well as the applications of others--

including the other Plaintiffs here), thereby confirming that the “Hold” on PPH’s
Second Draw PPP application is solely predicated on the Regulation, the SOP, the

Incorporating Statute, and/or the SBA’s interpretation and/or application thereof.

168. PPH is, through its legal counsel, aware that other similar businesses
have received correspondence from the SBA in regard to Second Draw PPP loan

applications wherein the SBA has stated: “Strip clubs remain ineligible for PPP loans.

See 13 CFR § 120.110(p).”
44

Case 2:21-cv-00447-LA Filed 04/07/21 Page 44 of 200 Document 1
169. PPH is also, through its legal counsel, aware that, irrespective of the

above, some other similar “strip clubs” have nevertheless received Second Draw PPP
loans.

170. PPH reasonably believes, based on the information that it has received,

the information disclosed and presented in the previous proceedings that resulted in

the Regulation and SOP being enjoined and/or barred from enforcement (much of
which is detailed verbatim below), and the actions already taken by the SBA with

regard to its Second Draw PPP loan application and the applications of other similar

businesses as described both above and below (including the applications of the other

Plaintiffs here), that its Second Draw PPP application will be rejected or fatally
delayed by the SBA due to the Regulation, the SOP, the Incorporating Statute, and/or

the SBA’s application of the same.

171. In the event that PPH is unable to obtain a Second Draw PPP, it may
lack the staff, funds, and necessary PPE and facility upgrades to be able to continue

to operate given the local Pandemic-related capacity restrictions, which may well

result in the permanent ruination of its business; its inability to engage in protected

First Amendment activities; and the inability of its staff, entertainers, and customers
to continue to engage in, associate for the purposes of engaging in, and/or view,

protected First Amendment activities.

Heritage Management Services, Inc. (“Heritage”)

172. Heritage is a non-alcohol serving commercial establishment open to the
consenting adult public which has presented, presents, and desires to continue to

present in the future, live female performance dance entertainment which is, at

times, fully-clothed, topless, and/or fully nude. All of the entertainment presented at
Heritage is expression presumptively protected under the First Amendment to the

United States Constitution and appeals to normal, healthy, sexual desires.

Case 2:21-cv-00447-LA Filed 04/07/21 Page 45 of 200 Document 1
173. Heritage has never been charged, let alone convicted, of any crimes of

obscenity. Similarly, none of the entertainers who have performed on Heritage’s
premises have ever been charged, let alone convicted, of any crimes of obscenity

related to their performances at Heritage.

174. Heritage is categorized as a NAICS code 71 entity; however, Heritage

mistakenly put a 53 code on its Second Draw PPP application.
175. Heritage presents lawful, constitutionally protected entertainment in

conformity with its various licenses, permits, and/or government approvals, including

but not limited to its Place of Public Assembly Permit issued by the City and County

of San Francisco.
176. Heritage is, as of the filing of this action, currently open for business. As

was required by and the state and local Public Health Orders, Heritage closed for

business on March 16, 2020; pursuant to evolving state and local Public Health
Orders it reopened on November 14, 2020; it then closed again on November 28, 2020.

Heritage recently reopened on March 5, 2021. As a direct and proximate result of

such municipal pandemic-related closures and limitations, Heritage has suffered

significant business and financial losses.
177. In order to mitigate its business losses, to provide monetary relief to its

employees (since a controlling percentage of Second Draw PPP loans must be used

for employee wages and salaries), and to be able to purchase PPE and make

Pandemic-related repairs and/or upgrades to its facility (since the Second Draw PPP
expanded the loan’s eligible uses), Heritage applied for a Second Draw PPP.

178. Heritage has submitted an application for a Second Draw PPP through

its lender, which is an approved SBA lender.
179. Pursuant to 15 U.S.C. § 636(a)(36)(F)(ii)(I), 15 U.S.C. § 636(a)(37)(K),

and/or 15 U.S.C. § 636(a)(F)(iii), Heritage’s lender has operated and will operate as a

Case 2:21-cv-00447-LA Filed 04/07/21 Page 46 of 200 Document 1
delegate of the SBA in the processing and approval or disapproval of the Second Draw

PPP sought by Heritage.
180. Heritage is fully qualified—but for the Regulation, the SOP, the

Incorporating Statute, and/or the SBA’s application of all of the same—to receive a

Second Draw PPP loan under all other relevant statutes, regulations, and procedures.

181. Heritage received a First Draw PPP loan under the CARES Act
pursuant to an injunction and ruling by the United States District Court for the

Eastern District of Michigan.

182. Heritage’s lender has informed it that its Second Draw PPP application

is “pending” by the SBA.
183. Heritage is, through its legal counsel, aware that other similar

businesses have received correspondence from the SBA in regard to Second Draw

PPP loan applications wherein the SBA has stated: “Strip clubs remain ineligible for
PPP loans. See 13 CFR § 120.110(p).”

184. Heritage is also, through its legal counsel, aware that, irrespective of

the above, other similar “strip clubs” have nevertheless received Second Draw PPP

loans.
185. Heritage reasonably believes, based on the information that it has

received, the information disclosed and presented in the previous proceedings that

resulted in the Regulation and SOP being enjoined and/or barred from enforcement

(much of which is detailed verbatim below), and the actions already taken by the SBA
with regard to its Second Draw PPP loan application and the applications of other

similar businesses as described both above and below (including the applications of

the other Plaintiffs here), that its Second Draw PPP application will be rejected or
fatally delayed by the SBA due to the Regulation, the SOP, the Incorporating Statute,

and/or the SBA’s application of the same.

Case 2:21-cv-00447-LA Filed 04/07/21 Page 47 of 200 Document 1
186. In the event that Heritage is unable to obtain a Second Draw PPP, it

may lack the staff, funds, and necessary PPE and facility upgrades to be able to
continue to operate given the local Pandemic-related capacity restrictions, which may

well result in the permanent ruination of its business; its inability to engage in

protected First Amendment activities; and the inability of its staff, entertainers, and

customers to continue to engage in, associate for the purposes of engaging in, and/or
view, protected First Amendment activities.

Vonch, LLC (“Vonch”)

187. Vonch d/b/a Polekatz Gentlemen’s Club, LLC is the paymaster for

Polekatz Gentlemen’s Club, LLC d/b/a Polekatz Gentlemen’s Club. Vonch is an
alcohol-serving commercial establishment open to the consenting adult public which

has presented, presents, and desires to continue to present in the future, live female

performance dance entertainment which is, at times, fully-clothed, topless, and/or
fully nude. All of the entertainment presented at Vonch is expression presumptively

protected under the First Amendment to the United States Constitution and appeals

to normal, healthy, sexual desires.

188. Vonch has never been charged, let alone convicted, of any crimes of
obscenity. Similarly, none of the entertainers who have performed on Vonch’s

premises have ever been charged, let alone convicted, of any crimes of obscenity

related to their performances at Vonch.

189. Vonch is categorized as a NAICS code 71 entity.
190. Vonch presents lawful, constitutionally protected entertainment in

conformity with its various licenses, permits, and/or government approvals, including

but not limited to:
a. A Liquor License issued by the State of Illinois;

b. A Liquor License issued by the Village of Bridgeview, Illinois;

Case 2:21-cv-00447-LA Filed 04/07/21 Page 48 of 200 Document 1
c. A Restaurant License issued by the Village of Bridgeview, Illinois;

and
d. A Business License issued by the Village of Bridgeview, Illinois.

191. Vonch is, as of the filing of this action, currently open for business. As

was required by local and/or state Public Health Orders, Vonch closed for business on

March 16, 2020; it reopened on June 23, 2020, but on October 28, 2020 closed again,
and reopened again on January 23, 2021. As a direct and proximate result of such

municipal pandemic-related closures and limitations, Vonch has suffered significant

business and financial losses.

192. In order to mitigate its business losses, to provide monetary relief to its
employees (since a controlling percentage of Second Draw PPP loans must be used

for employee wages and salaries), and to be able to purchase PPE and make

Pandemic-related repairs and/or upgrades to its facility (since the Second Draw PPP
expanded the loan’s eligible uses), Vonch applied for a Second Draw PPP.

193. Vonch has submitted an application for a Second Draw PPP through its

lender, which is an approved SBA lender.

194. Pursuant to 15 U.S.C. § 636(a)(36)(F)(ii)(I), 15 U.S.C. § 636(a)(37)(K),
and/or 15 U.S.C. § 636(a)(F)(iii), Vonch’s lender has operated and will operate as a

delegate of the SBA in the processing and approval or disapproval of the Second Draw

PPP sought by Vonch.

195. Vonch is fully qualified—but for the Regulation, the SOP, the
Incorporating Statute, and/or the SBA’s application of all of the same—to receive a

Second Draw PPP loan under all other relevant statutes, regulations, and procedures.

196. Vonch received a First Draw PPP loan under the CARES Act pursuant
to an injunction and ruling by the United States District Court for the Eastern

District of Michigan.

Case 2:21-cv-00447-LA Filed 04/07/21 Page 49 of 200 Document 1
197. Vonch’s lender has informed it that the SBA has placed “an internal SBA

hold” its Second Draw PPP.
198. Vonch is, through its legal counsel, aware that other similar businesses

have received correspondence from the SBA in regard to Second Draw PPP loan

applications wherein the SBA has stated: “Strip clubs remain ineligible for PPP loans.

See 13 CFR § 120.110(p).”
199. Vonch is also, through its legal counsel, aware that, irrespective of the

above, other similar “strip clubs” have nevertheless received Second Draw PPP loans.

200. Vonch reasonably believes, based on the information that it has

received, the information disclosed and presented in the previous proceedings that
resulted in the Regulation and SOP being enjoined and/or barred from enforcement

(much of which is detailed verbatim below), and the actions already taken by the SBA

with regard to its Second Draw PPP loan application and the applications of other
similar businesses as described both above and below (including the applications of

the other Plaintiffs here), that its Second Draw PPP application will be rejected or

fatally delayed by the SBA due to the Regulation, the SOP, the Incorporating Statute,

and/or the SBA’s application of the same.
201. In the event that Vonch is unable to obtain a Second Draw PPP, it may

lack the staff, funds, and necessary PPE and facility upgrades to be able to continue

to operate given the local Pandemic-related capacity restrictions, which may well

result in the permanent ruination of its business; its inability to engage in protected
First Amendment activities; and the inability of its staff, entertainers, and customers

to continue to engage in, associate for the purposes of engaging in, and/or view,

protected First Amendment activities.
East Coast Restaurant & Night Clubs, LLC (“East Coast”)

202. East Coast is a food and alcohol-serving commercial establishment open

to the consenting adult public which has presented, presents, and desires to continue
50

Case 2:21-cv-00447-LA Filed 04/07/21 Page 50 of 200 Document 1
to present in the future, fully-clothed (in the form of pasties) live female performance

dance entertainment. All of the entertainment presented at East Coast is expression
presumptively protected under the First Amendment to the United States

Constitution and appeals to normal, healthy, sexual desires.

203. East Coast has never been charged, let alone convicted, of any crimes of

obscenity. Similarly, none of the entertainers who have performed on East Coast’s
premises have ever been charged, let alone convicted, of any crimes of obscenity

related to their performances at East Coast.

204. East Coast is categorized as a NAICS code 72 entity.

205. East Coast presents lawful, constitutionally protected entertainment in
conformity with its various licenses, permits, and/or government approvals, including

but not limited to:

a. A Live Entertainment Permit issued by the Town of Bedford;
b. An Alcohol Permit issued by the State of New Hampshire; and

c. A Food License issued by the Town of Bedford.

206. East Coast is, as of the filing of this action, currently open for business.

As was required by local and/or state Public Health Orders, East Coast closed for
business on March 16, 2020; pursuant to the evolving local and/or state Public Health

Orders, reopened and reclosed several times, including partially reopening in June of

2020 in a limited capacity and closing for five days before Thanksgiving; it most

recently reopened on November 24, 2020. As a direct and proximate result of such
municipal pandemic-related closures and limitations, East Coast has suffered

significant business and financial losses.

207. In order to mitigate its business losses, to provide monetary relief to its
employees (since a controlling percentage of Second Draw PPP loans must be used

for employee wages and salaries), and to be able to purchase PPE and make

Case 2:21-cv-00447-LA Filed 04/07/21 Page 51 of 200 Document 1
Pandemic-related repairs and/or upgrades to its facility (since the Second Draw PPP

expanded the loan’s eligible uses), East Coast applied for a Second Draw PPP.
208. East Coast has submitted an application for a Second Draw PPP

through its lender, which is an approved SBA lender.

209. Pursuant to 15 U.S.C. § 636(a)(36)(F)(ii)(I), 15 U.S.C. § 636(a)(37)(K),

and/or 15 U.S.C. § 636(a)(F)(iii), East Coast’s lender has operated and will operate as
a delegate of the SBA in the processing and approval or disapproval of the Second

Draw PPP sought by East Coast.

210. East Coast is fully qualified—but for the Regulation, the SOP, the

Incorporating Statute, and/or the SBA’s application of all of the same—to receive a
Second Draw PPP loan under all other relevant statutes, regulations, and procedures.

211. East Coast received a First Draw PPP loan under the CARES Act

pursuant to an injunction and ruling by the United States District Court for the
Eastern District of Michigan.

212. East Coast’s lender has informed it that its Second Draw PPP

application requires an “SBA Endorsement” before it will submit East Coast’s Second

Draw PPP application to the SBA. East Coast believes this is solely predicated on the
Regulation, the SOP, the Incorporating Statute, and/or the SBA’s interpretation

and/or application thereof.

213. East Coast is, through its legal counsel, aware that other similar

businesses have received correspondence from the SBA in regard to Second Draw
PPP loan applications wherein the SBA has stated: “Strip clubs remain ineligible for

PPP loans. See 13 CFR § 120.110(p).”

214. East Coast is also, through its legal counsel, aware that, irrespective of
the above, other similar “strip clubs” have nevertheless received Second Draw PPP

loans.

Case 2:21-cv-00447-LA Filed 04/07/21 Page 52 of 200 Document 1
215. East Coast reasonably believes, based on the information that it has

received, the information disclosed and presented in the previous proceedings that
resulted in the Regulation and SOP being enjoined and/or barred from enforcement

(much of which is detailed verbatim below), and the actions already taken by the SBA

with regard to its Second Draw PPP loan application and the applications of other

similar businesses as described both above and below (including the applications of
the other Plaintiffs here), that its Second Draw PPP application will be rejected or

fatally delayed by the SBA due to the Regulation, the SOP, the Incorporating Statute,

and/or the SBA’s application of the same.

216. In the event that East Coast is unable to obtain a Second Draw PPP, it
may lack the staff, funds, and necessary PPE and facility upgrades to be able to

continue to operate given the local Pandemic-related capacity restrictions, which may

well result in the permanent ruination of its business; its inability to engage in
protected First Amendment activities; and the inability of its staff, entertainers, and

customers to continue to engage in, associate for the purposes of engaging in, and/or

view, protected First Amendment activities.

Benelux Corporation (“Benelux”)
217. Benelux is a food and alcohol-serving commercial establishment open to

the consenting adult public which has presented, presents, and desires to continue to

present in the future, live female performance dance entertainment which is, at

times, fully-clothed or topless. All of the entertainment presented at Benelux is
expression presumptively protected under the First Amendment to the United States

Constitution and appeals to normal, healthy, sexual desires.

218. Benelux has never been charged, let alone convicted, of any crimes of
obscenity. Similarly, none of the entertainers who have performed on Benelux’s

premises have ever been charged, let alone convicted, of any crimes of obscenity

related to their performances at Benelux.
53

Case 2:21-cv-00447-LA Filed 04/07/21 Page 53 of 200 Document 1
219. Benelux is categorized as a NAICS code 72 entity.

220. Benelux presents lawful, constitutionally protected entertainment in
conformity with its various licenses, permits, and/or government approvals, including

but not limited to:

a. A Liquor License issued by the State of Texas;

b. A Texas Sales & Use Tax Permit issued by the State of Texas;
c. An Occupant Load Card issued by the City of Austin;

d. A Food Permit issued by the City of Austin; and

e. A Public Assembly Permit issued by the City of Austin Fire

Department.
221. Benelux is, as of the filing of this action, currently open for business. As

was required by local and/or state Public Health Orders, Benelux closed for business

on March 17, 2020; it reopened on May 22, 2020, but on June 26, 2020 closed again;
it most recently reopened on August 14, 2020. As a direct and proximate result of

such municipal pandemic-related closures and limitations, Benelux has suffered

significant business and financial losses.

222. In order to mitigate its business losses, to provide monetary relief to its
employees (since a controlling percentage of Second Draw PPP loans must be used

for employee wages and salaries), and to be able to purchase PPE and make

Pandemic-related repairs and/or upgrades to its facility (since the Second Draw PPP

expanded the loan’s eligible uses), Benelux applied for a Second Draw PPP.
223. Benelux has submitted an application for a Second Draw PPP through

its lender, which is an approved SBA lender.

224. Pursuant to 15 U.S.C. § 636(a)(36)(F)(ii)(I), 15 U.S.C. § 636(a)(37)(K),
and/or 15 U.S.C. § 636(a)(F)(iii), Benelux’s lender has operated and will operate as a

delegate of the SBA in the processing and approval or disapproval of the Second Draw

PPP sought by Benelux.
54

Case 2:21-cv-00447-LA Filed 04/07/21 Page 54 of 200 Document 1
225. Benelux is fully qualified—but for the Regulation, the SOP, the

Incorporating Statute, and/or the SBA’s application of all of the same—to receive a
Second Draw PPP loan under all other relevant statutes, regulations, and procedures.

226. Benelux received a First Draw PPP loan under the CARES Act pursuant

to an injunction and ruling by the United States District Court for the Eastern

District of Michigan.
227. Benelux’s lender has informed it that its Second Draw PPP application

has been placed on “Hold” by the SBA.

228. Benelux is, through its legal counsel, aware that other similar

businesses have received correspondence from the SBA in regard to Second Draw
PPP loan applications wherein the SBA has stated: “Strip clubs remain ineligible for

PPP loans. See 13 CFR § 120.110(p).”

229. Benelux is also, through its legal counsel, aware that, irrespective of the
above, other similar “strip clubs” have nevertheless received Second Draw PPP loans.

230. Benelux reasonably believes, based on the information that it has

received, the information disclosed and presented in the previous proceedings that

resulted in the Regulation and SOP being enjoined and/or barred from enforcement
(much of which is detailed verbatim below), and the actions already taken by the SBA

with regard to its Second Draw PPP loan application and the applications of other

similar businesses as described both above and below (including the applications of

the other Plaintiffs here), that its Second Draw PPP application will be rejected or
fatally delayed by the SBA due to the Regulation, the SOP, the Incorporating Statute,

and/or the SBA’s application of the same.

231. In the event that Benelux is unable to obtain a Second Draw PPP, it may
lack the staff, funds, and necessary PPE and facility upgrades to be able to continue

to operate given the local Pandemic-related capacity restrictions, which may well

result in the permanent ruination of its business; its inability to engage in protected
55

Case 2:21-cv-00447-LA Filed 04/07/21 Page 55 of 200 Document 1
First Amendment activities; and the inability of its staff, entertainers, and customers

to continue to engage in, associate for the purposes of engaging in, and/or view,
protected First Amendment activities.

Filosadelfia, LLC (“Filosadelfia”)

232. Filosadelfia is an alcohol-serving commercial establishment open to the

consenting adult public which has presented, presents, and desires to continue to
present in the future, live female performance dance entertainment which is, at

times, fully-clothed and/or topless. All of the entertainment presented at Filosadelfia

is expression presumptively protected under the First Amendment to the United

States Constitution and appeals to normal, healthy, sexual desires.
233. Filosadelfia has never been charged, let alone convicted, of any crimes

of obscenity. Similarly, none of the entertainers who have performed on Filosadelfia’s

premises have ever been charged, let alone convicted, of any crimes of obscenity
related to their performances at Filosadelfia.

234. Filosadelfia is categorized as a NAICS code 72 entity.

235. Filosadelfia presents lawful, constitutionally protected entertainment in

conformity with its various licenses, permits, and/or government approvals, including
but not limited to:

a. A PCLB-Liquor License issued by the State of Pennsylvania;

b. A Special Assembly Occupancy Permit issued by the City of

Philadelphia;
c. A Food Preparing and Serving License issued by the City of

Philadelphia; and

d. An Amusement License issued by the City of Philadelphia.
236. Filosadelfia is, as of the filing of this action, currently open for business.

As was required by local and/or state Public Health Orders, Filosadelfia closed for

business on March 16, 2020; pursuant to the evolving local and/or state Public Health
56

Case 2:21-cv-00447-LA Filed 04/07/21 Page 56 of 200 Document 1
Orders, reopened and reclosed several times culminating with its most recent

reopening on January 16, 2021. As a direct and proximate result of such municipal
pandemic-related closures and limitations, Filosadelfia has suffered significant

business and financial losses.

237. In order to mitigate its business losses, to provide monetary relief to its

employees (since a controlling percentage of Second Draw PPP loans must be used
for employee wages and salaries), and to be able to purchase PPE and make

Pandemic-related repairs and/or upgrades to its facility (since the Second Draw PPP

expanded the loan’s eligible uses), Filosadelfia applied for a Second Draw PPP.

238. Filosadelfia has submitted an application for a Second Draw PPP
through its lender, which is an approved SBA lender.

239. Pursuant to 15 U.S.C. § 636(a)(36)(F)(ii)(I), 15 U.S.C. § 636(a)(37)(K),

and/or 15 U.S.C. § 636(a)(F)(iii), Filosadelfia’s lender has operated and will operate
as a delegate of the SBA in the processing and approval or disapproval of the Second

Draw PPP sought by Filosadelfia.

240. Filosadelfia is fully qualified—but for the Regulation, the SOP, the

Incorporating Statute, and/or the SBA’s application of all of the same—to receive a
Second Draw PPP loan under all other relevant statutes, regulations, and procedures.

241. Filosadelfia received a First Draw PPP loan under the CARES Act

pursuant to an injunction and ruling by the United States District Court for the

Eastern District of Michigan.
242. Filosadelfia’s lender received a reply from the SBA that it cannot move

forward on Filosadelfia’s Second Draw PPP application, but did not state a reason

why. Filosadelfia believes the SBA’s reply is solely predicated on the Regulation, the
SOP, the Incorporating Statute, and/or the SBA’s interpretation and/or application

thereof

Case 2:21-cv-00447-LA Filed 04/07/21 Page 57 of 200 Document 1
243. Filosadelfia is, through its legal counsel, aware that other similar

businesses have received correspondence from the SBA in regard to Second Draw
PPP loan applications wherein the SBA has stated: “Strip clubs remain ineligible for

PPP loans. See 13 CFR § 120.110(p).”

244. Filosadelfia is also, through its legal counsel, aware that, irrespective of

the above, other similar “strip clubs” have nevertheless received Second Draw PPP
loans.

245. Filosadelfia reasonably believes, based on the information that it has

received, the information disclosed and presented in the previous proceedings that

resulted in the Regulation and SOP being enjoined and/or barred from enforcement
(much of which is detailed verbatim below), and the actions already taken by the SBA

with regard to its Second Draw PPP loan application and the applications of other

similar businesses as described both above and below (including the applications of
the other Plaintiffs here), that its Second Draw PPP application will be rejected or

fatally delayed by the SBA due to the Regulation, the SOP, the Incorporating Statute,

and/or the SBA’s application of the same.

246. In the event that Filosadelfia is unable to obtain a Second Draw PPP, it
may lack the staff, funds, and necessary PPE and facility upgrades to be able to

continue to operate given the local Pandemic-related capacity restrictions, which may

well result in the permanent ruination of its business; its inability to engage in

protected First Amendment activities; and the inability of its staff, entertainers, and
customers to continue to engage in, associate for the purposes of engaging in, and/or

view, protected First Amendment activities.

MAG Pitt, LP (“MAG Pitt”)
247. MAG Pitt is an alcohol-serving commercial establishment open to the

consenting adult public which has presented, presents, and desires to continue to

present in the future, live female performance dance entertainment which is, at
58

Case 2:21-cv-00447-LA Filed 04/07/21 Page 58 of 200 Document 1
times, fully-clothed or topless. All of the entertainment presented at MAG Pitt is

expression presumptively protected under the First Amendment to the United States
Constitution and appeals to normal, healthy, sexual desires.

248. MAG Pitt has never been charged, let alone convicted, of any crimes of

obscenity. Similarly, none of the entertainers who have performed on MAG Pitt’s

premises have ever been charged, let alone convicted, of any crimes of obscenity
related to their performances at MAG Pitt.

249. MAG Pitt is categorized as a NAICS code 72 entity.

250. MAG Pitt presents lawful, constitutionally protected entertainment in

conformity with its various licenses, permits, and/or government approvals, including
but not limited to a Liquor License issued by the Pennsylvania Liquor Control Board

with Amusement Permit, Extended Hours Permit, and Sunday Sales Permit.

251. MAG Pitt is, as of the filing of this action, currently open for business.
As was required by local and/or state Public Health Orders, MAG Pitt closed for

business on March 16, 2020. Pursuant to evolving local and/or state Public Health

Orders, MAG Pitt closed and reopened three times culminating with its most recent

reopening on December 26, 2020. As a direct and proximate result of such municipal
pandemic-related closures and limitations, MAG Pitt has suffered significant

business and financial losses.

252. In order to mitigate its business losses, to provide monetary relief to its

employees (since a controlling percentage of Second Draw PPP loans must be used
for employee wages and salaries), and to be able to purchase PPE and make

Pandemic-related repairs and/or upgrades to its facility (since the Second Draw PPP

expanded the loan’s eligible uses), MAG Pitt applied for a Second Draw PPP.
253. MAG Pitt has submitted an application for a Second Draw PPP through

its lender, which is an approved SBA lender.

Case 2:21-cv-00447-LA Filed 04/07/21 Page 59 of 200 Document 1
254. Pursuant to 15 U.S.C. § 636(a)(36)(F)(ii)(I), 15 U.S.C. § 636(a)(37)(K),

and/or 15 U.S.C. § 636(a)(F)(iii), MAG Pitt’s lender has operated and will operate as
a delegate of the SBA in the processing and approval or disapproval of the Second

Draw PPP sought by MAG Pitt.

255. MAG Pitt is fully qualified—but for the Regulation, the SOP, the

Incorporating Statute, and/or the SBA’s application of all of the same—to receive a
Second Draw PPP loan under all other relevant statutes, regulations, and procedures.

256. MAG Pitt received a First Draw PPP loan under the CARES Act

pursuant to an injunction and ruling by the United States District Court for the

Eastern District of Michigan.
257. MAG Pitt’s lender has informed it that its Second Draw PPP application

is denied “because you [MAG Pitt] do not meet the eligibility criteria established by

the SBA. See 13 CFR 120.110.”
258. MAG Pitt is, through its legal counsel, aware that other similar

businesses have received correspondence from the SBA in regard to Second Draw

PPP loan applications wherein the SBA has stated: “Strip clubs remain ineligible for

PPP loans. See 13 CFR § 120.110(p).”
259. MAG Pitt is also, through its legal counsel, aware that, irrespective of

the above, other similar “strip clubs” have nevertheless received Second Draw PPP

loans.

260. MAG Pitt reasonably believes, based on the information that it has
received, the information disclosed and presented in the previous proceedings that

resulted in the Regulation and SOP being enjoined and/or barred from enforcement

(much of which is detailed verbatim below), and the actions already taken by the SBA
with regard to its Second Draw PPP loan application and the applications of other

similar businesses as described both above and below (including the applications of

the other Plaintiffs here), that its Second Draw PPP application has been rejected
60

Case 2:21-cv-00447-LA Filed 04/07/21 Page 60 of 200 Document 1
and/or will be rejected or fatally delayed by the SBA due to the Regulation, the SOP,

the Incorporating Statute, and/or the SBA’s application of the same.
261. In the event that MAG Pitt is unable to obtain a Second Draw PPP, it

may lack the staff, funds, and necessary PPE and facility upgrades to be able to

continue to operate given the local Pandemic-related capacity restrictions, which may

well result in the permanent ruination of its business; its inability to engage in
protected First Amendment activities; and the inability of its staff, entertainers, and

customers to continue to engage in, associate for the purposes of engaging in, and/or

view, protected First Amendment activities.

MAG Enterprises, Inc. (“MAG Enterprises”)
262. MAG Enterprises is an alcohol-serving commercial establishment open

to the consenting adult public which has presented, presents, and desires to continue

to present in the future, live female performance dance entertainment which is, at
times, fully-clothed or topless. All of the entertainment presented at MAG

Enterprises is expression presumptively protected under the First Amendment to the

United States Constitution and appeals to normal, healthy, sexual desires.

263. MAG Enterprises has never been charged, let alone convicted, of any
crimes of obscenity. Similarly, none of the entertainers who have performed on MAG

Enterprises’ premises have ever been charged, let alone convicted, of any crimes of

obscenity related to their performances at MAG Enterprises.

264. MAG Enterprises is categorized as a NAICS code 72 entity.
265. MAG Enterprises presents lawful, constitutionally protected

entertainment in conformity with its various licenses, permits, and/or government

approvals, including but not limited to:
a. A Liquor License from the Pennsylvania Liquor Control Board

with permits for Amusement, Extended Hours Food, and Sunday Sales;

b. An Amusement License issued by the City of Philadelphia; and
61

Case 2:21-cv-00447-LA Filed 04/07/21 Page 61 of 200 Document 1
c. A temporary Extension of Premises in order to operate outdoors

issued by the City of Philadelphia.
266. MAG Enterprises is, as of the filing of this action, currently open for

business. As was required by local and/or state Public Health Orders, MAG

Enterprises closed for business on March 16, 2020. Pursuant to evolving local and/or

state Public Health Orders, MAG Enterprises closed and reopened once culminating
with its most recent reopening on August 28, 2020. As a direct and proximate result

of such municipal pandemic-related closures and limitations, MAG Enterprises has

suffered significant business and financial losses.

267. In order to mitigate its business losses, to provide monetary relief to its
employees (since a controlling percentage of Second Draw PPP loans must be used

for employee wages and salaries), and to be able to purchase PPE and make

Pandemic-related repairs and/or upgrades to its facility (since the Second Draw PPP
expanded the loan’s eligible uses), MAG Enterprises applied for a Second Draw PPP.

268. MAG Enterprises has submitted an application for a Second Draw PPP

through its lender, which is an approved SBA lender.

269. Pursuant to 15 U.S.C. § 636(a)(36)(F)(ii)(I), 15 U.S.C. § 636(a)(37)(K),
and/or 15 U.S.C. § 636(a)(F)(iii), MAG Enterprises’ lender has operated and will

operate as a delegate of the SBA in the processing and approval or disapproval of the

Second Draw PPP sought by MAG Enterprises.

270. MAG Enterprises is fully qualified—but for the Regulation, the SOP, the
Incorporating Statute, and/or the SBA’s application of all of the same—to receive a

Second Draw PPP loan under all other relevant statutes, regulations, and procedures.

271. MAG Enterprises received a First Draw PPP loan under the CARES Act
pursuant to an injunction and ruling by the United States District Court for the

Eastern District of Michigan.

Case 2:21-cv-00447-LA Filed 04/07/21 Page 62 of 200 Document 1
272. MAG Enterprises’ lender has informed it that its Second Draw PPP

application is on hold.
273. MAG Enterprises is, through its legal counsel, aware that other similar

businesses have received correspondence from the SBA in regard to Second Draw

PPP loan applications wherein the SBA has stated: “Strip clubs remain ineligible for

PPP loans. See 13 CFR § 120.110(p).”
274. MAG Enterprises is also, through its legal counsel, aware that,

irrespective of the above, other similar “strip clubs” have nevertheless received

Second Draw PPP loans.

275. MAG Enterprises reasonably believes, based on the information that it
has received, the information disclosed and presented in the previous proceedings

that resulted in the Regulation and SOP being enjoined and/or barred from

enforcement (much of which is detailed verbatim below), and the actions already
taken by the SBA with regard to its Second Draw PPP loan application and the

applications of other similar businesses as described both above and below (including

the applications of the other Plaintiffs here), that its Second Draw PPP application

will be rejected or fatally delayed by the SBA due to the Regulation, the SOP, the
Incorporating Statute, and/or the SBA’s application of the same.

276. In the event that MAG Enterprises is unable to obtain a Second Draw

PPP, it may lack the staff, funds, and necessary PPE and facility upgrades to be able

to continue to operate given the local Pandemic-related capacity restrictions, which
may well result in the permanent ruination of its business; its inability to engage in

protected First Amendment activities; and the inability of its staff, entertainers, and

customers to continue to engage in, associate for the purposes of engaging in, and/or
view, protected First Amendment activities.

2740 Corporation

Case 2:21-cv-00447-LA Filed 04/07/21 Page 63 of 200 Document 1
277. 2740 Corporation is a non-alcohol serving commercial establishment

open to the consenting adult public which has presented, presents, and desires to
continue to present in the future, live female performance dance entertainment which

is, at times, fully-clothed or topless. All of the entertainment presented at 2740

Corporation is expression presumptively protected under the First Amendment to the

United States Constitution and appeals to normal, healthy, sexual desires.
278. 2740 Corporation has never been charged, let alone convicted, of any

crimes of obscenity. Similarly, none of the entertainers who have performed on 2740

Corporation’s premises have ever been charged, let alone convicted, of any crimes of

obscenity related to their performances at 2740 Corporation.
279. 2740 Corporation is categorized as a NAICS code 72 entity.

280. 2740 Corporation presents lawful, constitutionally protected

entertainment in conformity with its various licenses, permits, and/or government
approvals, including but not limited to:

a. A Business Privilege License issued by the City of Philadelphia;

and

b. A Certificate of Use and Occupancy from the City of Philadelphia.
281. 2740 Corporation is, as of the filing of this action, currently open for

business. As was required by local and/or state Public Health Orders, 2740

Corporation closed for business on March 16, 2020. Pursuant to evolving local and/or

state Public Health Orders, 2740 Corporation closed and reopened once culminating
with its most recent reopening on August 28, 2020. As a direct and proximate result

of such municipal pandemic-related closures and limitations, 2740 Corporation has

suffered significant business and financial losses.
282. In order to mitigate its business losses, to provide monetary relief to its

employees (since a controlling percentage of Second Draw PPP loans must be used

for employee wages and salaries), and to be able to purchase PPE and make
64

Case 2:21-cv-00447-LA Filed 04/07/21 Page 64 of 200 Document 1
Pandemic-related repairs and/or upgrades to its facility (since the Second Draw PPP

expanded the loan’s eligible uses), 2740 Corporation applied for a Second Draw PPP.
283. 2740 Corporation has submitted an application for a Second Draw PPP

through its lender, which is an approved SBA lender.

284. Pursuant to 15 U.S.C. § 636(a)(36)(F)(ii)(I), 15 U.S.C. § 636(a)(37)(K),

and/or 15 U.S.C. § 636(a)(F)(iii), 2740 Corporation’s lender has operated and will
operate as a delegate of the SBA in the processing and approval or disapproval of the

Second Draw PPP sought by 2740 Corporation.

285. 2740 Corporation is fully qualified—but for the Regulation, the SOP, the

Incorporating Statute, and/or the SBA’s application of all of the same—to receive a
Second Draw PPP loan under all other relevant statutes, regulations, and procedures.

286. 2740 Corporation received a First Draw PPP loan under the CARES Act

pursuant to an injunction and ruling by the United States District Court for the
Eastern District of Michigan.

287. 2740 Corporation’s lender has informed it that its Second Draw PPP

application is on hold.

288. 2740 Corporation is, through its legal counsel, aware that other similar
businesses have received correspondence from the SBA in regard to Second Draw

PPP loan applications wherein the SBA has stated: “Strip clubs remain ineligible for

PPP loans. See 13 CFR § 120.110(p).”

289. 2740 Corporation is also, through its legal counsel, aware that,
irrespective of the above, other similar “strip clubs” have nevertheless received

Second Draw PPP loans.

290. 2740 Corporation reasonably believes, based on the information that it
has received, the information disclosed and presented in the previous proceedings

that resulted in the Regulation and SOP being enjoined and/or barred from

enforcement (much of which is detailed verbatim below), and the actions already
65

Case 2:21-cv-00447-LA Filed 04/07/21 Page 65 of 200 Document 1
taken by the SBA with regard to its Second Draw PPP loan application and the

applications of other similar businesses as described both above and below (including
the applications of the other Plaintiffs here), that its Second Draw PPP application

has been rejected and/or will be rejected or fatally delayed by the SBA due to the

Regulation, the SOP, the Incorporating Statute, and/or the SBA’s application of the

same.
291. In the event that 2740 Corporation is unable to obtain a Second Draw

PPP, it may lack the staff, funds, and necessary PPE and facility upgrades to be able

to continue to operate given the local Pandemic-related capacity restrictions, which

may well result in the permanent ruination of its business; its inability to engage in
protected First Amendment activities; and the inability of its staff, entertainers, and

customers to continue to engage in, associate for the purposes of engaging in, and/or

view, protected First Amendment activities.
MAG Entertainment, LLC (“MAG Entertainment”)

292. MAG Entertainment is an alcohol-serving commercial establishment

open to the consenting adult public which has presented, presents, and desires to

continue to present in the future, live female performance dance entertainment which
is, at times, fully-clothed or topless. All of the entertainment presented at MAG

Entertainment is expression presumptively protected under the First Amendment to

the United States Constitution and appeals to normal, healthy, sexual desires.

293. MAG Entertainment has never been charged, let alone convicted, of any
crimes of obscenity. Similarly, none of the entertainers who have performed on MAG

Entertainment’s premises have ever been charged, let alone convicted, of any crimes

of obscenity related to their performances at MAG Entertainment.
294. MAG Entertainment is categorized as a NAICS code 72 entity.

295. MAG Entertainment presents lawful, constitutionally protected

entertainment in conformity with its various licenses, permits, and/or government
66

Case 2:21-cv-00447-LA Filed 04/07/21 Page 66 of 200 Document 1
approvals, including but not limited to a Liquor License issued by the New Jersey

Division of Alcoholic Beverage Control.
296. MAG Entertainment is, as of the filing of this action, currently open for

business. As was required by local and/or state Public Health Orders, MAG

Entertainment closed for business on March 16, 2020. Pursuant to evolving local

and/or state Public Health Orders, MAG Entertainment closed and reopened once
culminating with its most recent reopening on June 15, 2020. As a direct and

proximate result of such municipal pandemic-related closures and limitations, MAG

Entertainment has suffered significant business and financial losses.

297. In order to mitigate its business losses, to provide monetary relief to its
employees (since a controlling percentage of Second Draw PPP loans must be used

for employee wages and salaries), and to be able to purchase PPE and make

Pandemic-related repairs and/or upgrades to its facility (since the Second Draw PPP
expanded the loan’s eligible uses), MAG Entertainment applied for a Second Draw

PPP.

298. MAG Entertainment has submitted an application for a Second Draw

PPP through its lender, which is an approved SBA lender.
299. Pursuant to 15 U.S.C. § 636(a)(36)(F)(ii)(I), 15 U.S.C. § 636(a)(37)(K),

and/or 15 U.S.C. § 636(a)(F)(iii), MAG Entertainment’s lender has operated and will

operate as a delegate of the SBA in the processing and approval or disapproval of the

Second Draw PPP sought by MAG Entertainment.
300. MAG Entertainment is fully qualified—but for the Regulation, the SOP,

the Incorporating Statute, and/or the SBA’s application of all of the same—to receive

a Second Draw PPP loan under all other relevant statutes, regulations, and
procedures.

Case 2:21-cv-00447-LA Filed 04/07/21 Page 67 of 200 Document 1
301. MAG Entertainment received a First Draw PPP loan under the CARES

Act pursuant to an injunction and ruling by the United States District Court for the
Eastern District of Michigan.

302. MAG Entertainment’s lender has informed it that its Second Draw PPP

application is on hold.

303. MAG Entertainment is, through its legal counsel, aware that other
similar businesses have received correspondence from the SBA in regard to Second

Draw PPP loan applications wherein the SBA has stated: “Strip clubs remain

ineligible for PPP loans. See 13 CFR § 120.110(p).”

304. MAG Entertainment is also, through its legal counsel, aware that,
irrespective of the above, other similar “strip clubs” have nevertheless received

Second Draw PPP loans.

305. MAG Entertainment reasonably believes, based on the information that
it has received, the information disclosed and presented in the previous proceedings

that resulted in the Regulation and SOP being enjoined and/or barred from

enforcement (much of which is detailed verbatim below), and the actions already

taken by the SBA with regard to its Second Draw PPP loan application and the
applications of other similar businesses as described both above and below (including

the applications of the other Plaintiffs here), that its Second Draw PPP application

has been rejected and/or will be rejected or fatally delayed by the SBA due to the

Regulation, the SOP, the Incorporating Statute, and/or the SBA’s application of the
same.

306. In the event that MAG Entertainment is unable to obtain a Second Draw

PPP, it may lack the staff, funds, and necessary PPE and facility upgrades to be able
to continue to operate given the local Pandemic-related capacity restrictions, which

may well result in the permanent ruination of its business; its inability to engage in

protected First Amendment activities; and the inability of its staff, entertainers, and
68

Case 2:21-cv-00447-LA Filed 04/07/21 Page 68 of 200 Document 1
customers to continue to engage in, associate for the purposes of engaging in, and/or

view, protected First Amendment activities.
Oasis on Essington, LLC (“Oasis”)

307. Oasis is an alcohol-serving commercial establishment open to the

consenting adult public which has presented, presents, and desires to continue to

present in the future, live female performance dance entertainment which is, at
times, fully-clothed or topless. All of the entertainment presented at Oasis is

expression presumptively protected under the First Amendment to the United States

Constitution and appeals to normal, healthy, sexual desires.

308. Oasis has never been charged, let alone convicted, of any crimes of
obscenity. Similarly, none of the entertainers who have performed on Oasis’s

premises have ever been charged, let alone convicted, of any crimes of obscenity

related to their performances at Oasis.
309. Oasis is categorized as a NAICS code 72 entity.

310. Oasis presents lawful, constitutionally protected entertainment in

conformity with its various licenses, permits, and/or government approvals, including

but not limited to:
a. Amusement Licenses issued by the City of Philadelphia;

b. A Liquor License issued by the Commonwealth of Pennsylvania;

and

c. A Food Preparing and Serving License issued by the City of
Philadelphia.

311. Oasis is, as of the filing of this action, currently open for business. As

was required by local and/or state Public Health Orders, Oasis closed for business on
March 16, 2020. Pursuant to evolving local and/or state Public Health Orders, Oasis

closed and reopened twice culminating with its most recent reopening on January 16,

Case 2:21-cv-00447-LA Filed 04/07/21 Page 69 of 200 Document 1
2021. As a direct and proximate result of such municipal pandemic-related closures

and limitations, Oasis has suffered significant business and financial losses.
312. In order to mitigate its business losses, to provide monetary relief to its

employees (since a controlling percentage of Second Draw PPP loans must be used

for employee wages and salaries), and to be able to purchase PPE and make

Pandemic-related repairs and/or upgrades to its facility (since the Second Draw PPP
expanded the loan’s eligible uses), Oasis applied for a Second Draw PPP.

313. Oasis has submitted an application for a Second Draw PPP through its

lender, which is an approved SBA lender.

314. Pursuant to 15 U.S.C. § 636(a)(36)(F)(ii)(I), 15 U.S.C. § 636(a)(37)(K),
and/or 15 U.S.C. § 636(a)(F)(iii), Oasis’s lender has operated and will operate as a

delegate of the SBA in the processing and approval or disapproval of the Second Draw

PPP sought by Oasis.
315. Oasis is fully qualified—but for the Regulation, the SOP, the

Incorporating Statute, and/or the SBA’s application of all of the same—to receive a

Second Draw PPP loan under all other relevant statutes, regulations, and procedures.

316. Oasis received a First Draw PPP loan under the CARES Act pursuant
to an injunction and ruling by the United States District Court for the Eastern

District of Michigan.

317. Oasis’s lender has informed it that its Second Draw PPP application is

on hold.
318. Oasis is, through its legal counsel, aware that other similar businesses

have received correspondence from the SBA in regard to Second Draw PPP loan

applications wherein the SBA has stated: “Strip clubs remain ineligible for PPP loans.
See 13 CFR § 120.110(p).”

319. Oasis is also, through its legal counsel, aware that, irrespective of the

above, other similar “strip clubs” have nevertheless received Second Draw PPP loans.
70

Case 2:21-cv-00447-LA Filed 04/07/21 Page 70 of 200 Document 1
320. Oasis reasonably believes, based on the information that it has received,

the information disclosed and presented in the previous proceedings that resulted in
the Regulation and SOP being enjoined and/or barred from enforcement (much of

which is detailed verbatim below), and the actions already taken by the SBA with

regard to its Second Draw PPP loan application and the applications of other similar

businesses as described both above and below (including the applications of the other
Plaintiffs here), that its Second Draw PPP application has been rejected and/or will

be rejected or fatally delayed by the SBA due to the Regulation, the SOP, the

Incorporating Statute, and/or the SBA’s application of the same.

321. In the event that Oasis is unable to obtain a Second Draw PPP, it may
lack the staff, funds, and necessary PPE and facility upgrades to be able to continue

to operate given the local Pandemic-related capacity restrictions, which may well

result in the permanent ruination of its business; its inability to engage in protected
First Amendment activities; and the inability of its staff, entertainers, and customers

to continue to engage in, associate for the purposes of engaging in, and/or view,

protected First Amendment activities.

Burch Management Company, Inc. (“BMC”)
322. BMC is a business services company that provides a range of services to

businesses including, inter alia: accounting, payroll, advertising services, consulting,

and bulk goods purchasing.

323. BMC provides services to a number of establishments that provide live
female performance dance entertainment, including several Plaintiffs in this action.

324. All of the entertainment presented at the businesses BMC services is

expression presumptively protected under the First Amendment to the United States
Constitution and appeals to normal, healthy, sexual desires. None of the businesses

BMC services has ever been charged, let alone convicted, of any crimes of obscenity.

Similarly, none of the entertainers who have performed at the businesses BMC
71

Case 2:21-cv-00447-LA Filed 04/07/21 Page 71 of 200 Document 1
services have ever been charged, let alone convicted, of any crimes of obscenity related

to their performances at the businesses BMC services.
325. A number of entities BMC services have been, pursuant to local and/or

State Pandemic orders, closed and then reopened in limited capacities as a result of

the Pandemic. As a direct and proximate result of such state-ordered closures, BMC

has suffered significant business losses, was forced to layoff some staff and reduce
hours on others. BMC plans to return to full operations when its clients are able to

do so.

326. In order to mitigate its business losses, to provide monetary relief to its

employees (since a controlling percentage of Second Draw PPP loans must be used
for employee wages and salaries), and to be able to purchase PPE and make

Pandemic-related repairs and/or upgrades to its facility (since the Second Draw PPP

expanded the loan’s eligible uses), BMC applied for a Second Draw PPP.
327. BMC has submitted an application for a Second Draw PPP through its

lender, which is an approved SBA lender.

328. Pursuant to 15 U.S.C. § 636(a)(36)(F)(ii)(I), 15 U.S.C. § 636(a)(37)(K),

and/or 15 U.S.C. § 636(a)(F)(iii), BMC’s lender has operated and will operate as a
delegate of the SBA in the processing and approval or disapproval of the Second Draw

PPP sought by BMC.

329. BMC is fully qualified—but for the Regulation, the SOP, the

Incorporating Statute, and/or the SBA’s application of all of the same—to receive a
Second Draw PPP loan under all other relevant statutes, regulations, and procedures.

330. BMC received a First Draw PPP loan under the CARES Act pursuant to

an injunction and ruling by the United States District Court for the Eastern District
of Michigan.

331. BMC’s Second Draw PPP application is inexplicably held or delayed and

BMC’s lender has informed it that its application is under review.
72

Case 2:21-cv-00447-LA Filed 04/07/21 Page 72 of 200 Document 1
332. BMC is, through its legal counsel, aware that other similar businesses

have received correspondence from the SBA in regard to Second Draw PPP loan
applications wherein the SBA has stated: “Strip clubs remain ineligible for PPP loans.

See 13 CFR § 120.110(p).”

333. BMC is also, through its legal counsel, aware that, irrespective of the

above, other similar “strip clubs” have nevertheless received Second Draw PPP loans.
334. BMC reasonably believes, based on the information that it has received,

the information disclosed and presented in the previous proceedings that resulted in

the Regulation and SOP being enjoined and/or barred from enforcement (much of

which is detailed verbatim below), and the actions already taken by the SBA with
regard to its Second Draw PPP loan application and the applications of other similar

businesses as described both above and below (including the applications of the other

Plaintiffs here), that its Second Draw PPP application will be rejected or fatally
delayed by the SBA due to the Regulation, the SOP, the Incorporating Statute, and/or

the SBA’s application of the same.

335. In the event that BMC is unable to obtain a Second Draw PPP, it may

lack the staff, funds, and necessary PPE and facility upgrades to be able to continue
to operate given the local Pandemic-related capacity restrictions, which may well

result in the permanent ruination of its business; its inability to engage in protected

First Amendment activities; and the inability of its staff, entertainers, and customers

to continue to engage in, associate for the purposes of engaging in, and/or view,
protected First Amendment activities.

BDS Restaurant Group, Inc. (“BDS”)

336. BDS is a food and alcohol-serving commercial establishment open to the
consenting adult public which has presented, presents, and desires to continue to

present in the future, live female performance dance entertainment which is, at

times, fully-clothed or topless. All of the entertainment presented at BDS is
73

Case 2:21-cv-00447-LA Filed 04/07/21 Page 73 of 200 Document 1
expression presumptively protected under the First Amendment to the United States

Constitution and appeals to normal, healthy, sexual desires.
337. BDS has never been charged, let alone convicted, of any crimes of

obscenity. Similarly, none of the entertainers who have performed on BDS’s premises

have ever been charged, let alone convicted, of any crimes of obscenity related to their

performances at BDS.
338. BDS is categorized as a NAICS code 72 entity.

339. BDS presents lawful, constitutionally protected entertainment in

conformity with its various licenses, permits, and/or government approvals, including

but not limited to:
a. A Sexually Oriented Business Permit issued by the City of Dallas;

b. A Mixed Beverage Permit issued by the Texas Alcohol Beverage

Commission;
c. A Late Hours Permit issued by the Texas Alcohol Beverage

Commission;

d. A Catering Permit issued by the Texas Alcohol Beverage

Commission;
e. A Cartage Permit issued by the Texas Alcohol Beverage

Commission;

f. A Food and Beverage Certificate issued by the Texas Alcohol

Beverage Commission;
g. An Alcohol Permit issued by the City of Dallas; and

h. An Alcohol Permit issued by Dallas County.

340. BDS is, as of the filing of this action, currently open for business;
however, in order to open, BDS changed its operations and obtained a Food and

Beverage Certificate from the Texas Alcohol Beverage Commission, which requires

alcohol sales to be less than 51% of total sales. As was required by local and/or state
74

Case 2:21-cv-00447-LA Filed 04/07/21 Page 74 of 200 Document 1
Public Health Orders, BDS closed for business on March 16, 2020; it reopened on May

22, 2020, but on June 26, 2020 closed again, and reopened again on July 20, 2020.As
a direct and proximate result of such municipal pandemic-related closures and

limitations, BDS has suffered significant business and financial losses.

341. In order to mitigate its business losses, to provide monetary relief to its

employees (since a controlling percentage of Second Draw PPP loans must be used
for employee wages and salaries), and to be able to purchase PPE and make

Pandemic-related repairs and/or upgrades to its facility (since the Second Draw PPP

expanded the loan’s eligible uses), BDS applied for a Second Draw PPP.

342. BDS has submitted an application for a Second Draw PPP through its
lender, which is an approved SBA lender.

343. Pursuant to 15 U.S.C. § 636(a)(36)(F)(ii)(I), 15 U.S.C. § 636(a)(37)(K),

and/or 15 U.S.C. § 636(a)(F)(iii), BDS’s lender has operated and will operate as a
delegate of the SBA in the processing and approval or disapproval of the Second Draw

PPP sought by BDS.

344. BDS is fully qualified—but for the Regulation, the SOP, the

Incorporating Statute, and/or the SBA’s application of all of the same—to receive a
Second Draw PPP loan under all other relevant statutes, regulations, and procedures.

345. BDS received a First Draw PPP loan under the CARES Act pursuant to

an injunction and ruling by the United States District Court for the Eastern District

of Michigan.
346. BDS’s lender has informed it that its Second Draw PPP application

requires “further research” for continued processing.

347. BDS is, through its legal counsel, aware that other similar businesses
have received correspondence from the SBA in regard to Second Draw PPP loan

applications wherein the SBA has stated: “Strip clubs remain ineligible for PPP loans.

See 13 CFR § 120.110(p).”
75

Case 2:21-cv-00447-LA Filed 04/07/21 Page 75 of 200 Document 1
348. BDS is also, through its legal counsel, aware that, irrespective of the

above, other similar “strip clubs” have nevertheless received Second Draw PPP loans.
349. BDS reasonably believes, based on the information that it has received,

the information disclosed and presented in the previous proceedings that resulted in

the Regulation and SOP being enjoined and/or barred from enforcement (much of

which is detailed verbatim below), and the actions already taken by the SBA with
regard to its Second Draw PPP loan application and the applications of other similar

businesses as described both above and below (including the applications of the other

Plaintiffs here), that its Second Draw PPP application will be rejected or fatally

delayed by the SBA due to the Regulation, the SOP, the Incorporating Statute, and/or
the SBA’s application of the same.

350. In the event that BDS is unable to obtain a Second Draw PPP, it may

lack the staff, funds, and necessary PPE and facility upgrades to be able to continue
to operate given the local Pandemic-related capacity restrictions, which may well

result in the permanent ruination of its business; its inability to engage in protected

First Amendment activities; and the inability of its staff, entertainers, and customers

to continue to engage in, associate for the purposes of engaging in, and/or view,
protected First Amendment activities.

DB Entertainment, Inc. (“DB”)

351. DB is a food and alcohol-serving commercial establishment open to the

consenting adult public which has presented, presents, and desires to continue to
present in the future, live female performance dance entertainment which is, at

times, fully-clothed or topless. All of the entertainment presented at DB is expression

presumptively protected under the First Amendment to the United States
Constitution and appeals to normal, healthy, sexual desires.

352. DB has never been charged, let alone convicted, of any crimes of

obscenity. Similarly, none of the entertainers who have performed on DB’s premises
76

Case 2:21-cv-00447-LA Filed 04/07/21 Page 76 of 200 Document 1
have ever been charged, let alone convicted, of any crimes of obscenity related to their

performances at DB.
353. DB is categorized as a NAICS code 72 entity.

354. DB presents lawful, constitutionally protected entertainment in

conformity with its various licenses, permits, and/or government approvals, including

but not limited to:
a. A Certificate of Occupancy Permit issued by the City of Fort

Worth;

b. A Mixed Beverage Permit issued by the Texas Alcohol Beverage

Commission;
c. A Late Hours Permit issued by the Texas Alcohol Beverage

Commission;

d. A Catering Permit issued by the Texas Alcohol Beverage
Commission;

e. A Cartage Permit issued by the Texas Alcohol Beverage

Commission;

f. A Food and Beverage Certificate issued by the Texas Alcohol
Beverage Commission;

g. An Alcohol Permit issued by the City of Fort Worth; and

h. An Alcohol Permit issued by Tarrant County.

355. DB is, as of the filing of this action, currently open for business. As was
required by local and/or state Public Health Orders, DB closed for business on March

18, 2020; it reopened on May 22, 2020, but on June 26, 2020 closed again, and has

not been permitted to reopen. As a direct and proximate result of such municipal
pandemic-related closures and limitations, DB has suffered significant business and

financial losses.

Case 2:21-cv-00447-LA Filed 04/07/21 Page 77 of 200 Document 1
356. In order to mitigate its business losses, to provide monetary relief to its

employees (since a controlling percentage of Second Draw PPP loans must be used
for employee wages and salaries), and to be able to purchase PPE and make

Pandemic-related repairs and/or upgrades to its facility (since the Second Draw PPP

expanded the loan’s eligible uses), DB applied for a Second Draw PPP.

357. DB has submitted an application for a Second Draw PPP through its
lender, which is an approved SBA lender.

358. Pursuant to 15 U.S.C. § 636(a)(36)(F)(ii)(I), 15 U.S.C. § 636(a)(37)(K),

and/or 15 U.S.C. § 636(a)(F)(iii), DB’s lender has operated and will operate as a

delegate of the SBA in the processing and approval or disapproval of the Second Draw
PPP sought by DB.

359. DB is fully qualified—but for the Regulation, the SOP, the Incorporating

Statute, and/or the SBA’s application of all of the same—to receive a Second Draw
PPP loan under all other relevant statutes, regulations, and procedures.

360. DB received a First Draw PPP loan under the CARES Act pursuant to

an injunction and ruling by the United States District Court for the Eastern District

of Michigan.
361. DB’s lender has informed it that its Second Draw PPP application

requires “further research” for continued processing.

362. DB is, through its legal counsel, aware that other similar businesses

have received correspondence from the SBA in regard to Second Draw PPP loan
applications wherein the SBA has stated: “Strip clubs remain ineligible for PPP loans.

See 13 CFR § 120.110(p).”

363. DB is also, through its legal counsel, aware that, irrespective of the
above, other similar “strip clubs” have nevertheless received Second Draw PPP loans.

364. DB reasonably believes, based on the information that it has received,

the information disclosed and presented in the previous proceedings that resulted in
78

Case 2:21-cv-00447-LA Filed 04/07/21 Page 78 of 200 Document 1
the Regulation and SOP being enjoined and/or barred from enforcement (much of

which is detailed verbatim below), and the actions already taken by the SBA with
regard to its Second Draw PPP loan application and the applications of other similar

businesses as described both above and below (including the applications of the other

Plaintiffs here), that its Second Draw PPP application will be rejected or fatally

delayed by the SBA due to the Regulation, the SOP, the Incorporating Statute, and/or
the SBA’s application of the same.

365. In the event that DB is unable to obtain a Second Draw PPP, it may lack

the staff, funds, and necessary PPE and facility upgrades to be able to continue to

operate given the local Pandemic-related capacity restrictions, which may well result
in the permanent ruination of its business; its inability to engage in protected First

Amendment activities; and the inability of its staff, entertainers, and customers to

continue to engage in, associate for the purposes of engaging in, and/or view,
protected First Amendment activities.

T and N Incorporated (“T and N”)

366. T and N is a food and alcohol-serving commercial establishment open to

the consenting adult public which has presented, presents, and desires to continue to
present in the future, live female performance dance entertainment which is, at

times, fully-clothed or topless. All of the entertainment presented at T and N is

expression presumptively protected under the First Amendment to the United States

Constitution and appeals to normal, healthy, sexual desires.
367. T and N has never been charged, let alone convicted, of any crimes of

obscenity. Similarly, none of the entertainers who have performed on T and N’s

premises have ever been charged, let alone convicted, of any crimes of obscenity
related to their performances at T and N.

368. T and N is categorized as a NAICS code 72 entity.

Case 2:21-cv-00447-LA Filed 04/07/21 Page 79 of 200 Document 1
369. T and N presents lawful, constitutionally protected entertainment in

conformity with its various licenses, permits, and/or government approvals, including
but not limited to:

a. A Certificate of Occupancy Permit issued by the City of Arlington;

b. A Mixed Beverage Permit issued by the Texas Alcohol Beverage

Commission;
c. A Late Hours Permit issued by the Texas Alcohol Beverage

Commission;

d. A Catering Permit issued by the Texas Alcohol Beverage

Commission;
e. A Cartage Permit issued by the Texas Alcohol Beverage

Commission;

f. A Food and Beverage Certificate issued by the Texas Alcohol
Beverage Commission;

g. An Alcohol Permit issued by the City of Arlington; and

h. An Alcohol Permit issued by Tarrant County.

370. T and N is, as of the filing of this action, currently open for business. As
was required by local and/or state Public Health Orders, T and N closed for business

on March 18, 2020. Pursuant to evolving local and/or state Public Health Orders, T

and N closed and reopened several times culminating with its most recent reopening

on July 18, 2020. As a direct and proximate result of such municipal pandemic-related
closures and limitations, T and N has suffered significant business and financial

losses.

371. In order to mitigate its business losses, to provide monetary relief to its
employees (since a controlling percentage of Second Draw PPP loans must be used

for employee wages and salaries), and to be able to purchase PPE and make

Case 2:21-cv-00447-LA Filed 04/07/21 Page 80 of 200 Document 1
Pandemic-related repairs and/or upgrades to its facility (since the Second Draw PPP

expanded the loan’s eligible uses), T and N applied for a Second Draw PPP.
372. T and N has submitted an application for a Second Draw PPP through

its lender, which is an approved SBA lender.

373. Pursuant to 15 U.S.C. § 636(a)(36)(F)(ii)(I), 15 U.S.C. § 636(a)(37)(K),

and/or 15 U.S.C. § 636(a)(F)(iii), T and N’s lender has operated and will operate as a
delegate of the SBA in the processing and approval or disapproval of the Second Draw

PPP sought by T and N.

374. T and N is fully qualified—but for the Regulation, the SOP, the

Incorporating Statute, and/or the SBA’s application of all of the same—to receive a
Second Draw PPP loan under all other relevant statutes, regulations, and procedures.

375. T and N received a First Draw PPP loan under the CARES Act pursuant

to an injunction and ruling by the United States District Court for the Eastern
District of Michigan.

376. T and N’s lender has informed it that its Second Draw PPP application

requires “further research” for continued processing.

377. T and N is, through its legal counsel, aware that other similar
businesses have received correspondence from the SBA in regard to Second Draw

PPP loan applications wherein the SBA has stated: “Strip clubs remain ineligible for

PPP loans. See 13 CFR § 120.110(p).”

378. T and N is also, through its legal counsel, aware that, irrespective of the
above, other similar “strip clubs” have nevertheless received Second Draw PPP loans.

379. T and N reasonably believes, based on the information that it has

received, the information disclosed and presented in the previous proceedings that
resulted in the Regulation and SOP being enjoined and/or barred from enforcement

(much of which is detailed verbatim below), and the actions already taken by the SBA

with regard to its Second Draw PPP loan application and the applications of other
81

Case 2:21-cv-00447-LA Filed 04/07/21 Page 81 of 200 Document 1
similar businesses as described both above and below (including the applications of

the other Plaintiffs here), that its Second Draw PPP application will be rejected or
fatally delayed by the SBA due to the Regulation, the SOP, the Incorporating Statute,

and/or the SBA’s application of the same.

380. In the event that T and N is unable to obtain a Second Draw PPP, it may

lack the staff, funds, and necessary PPE and facility upgrades to be able to continue
to operate given the local Pandemic-related capacity restrictions, which may well

result in the permanent ruination of its business; its inability to engage in protected

First Amendment activities; and the inability of its staff, entertainers, and customers

to continue to engage in, associate for the purposes of engaging in, and/or view,
protected First Amendment activities.

Millennium Restaurant Group, Inc. (“Millennium”)

381. Millennium is a food and alcohol-serving commercial establishment
open to the consenting adult public which has presented, presents, and desires to

continue to present in the future, live female performance dance entertainment which

is, at times, fully-clothed or topless. All of the entertainment presented at Millennium

is expression presumptively protected under the First Amendment to the United
States Constitution and appeals to normal, healthy, sexual desires.

382. Millennium has never been charged, let alone convicted, of any crimes

of obscenity. Similarly, none of the entertainers who have performed on Millennium’s

premises have ever been charged, let alone convicted, of any crimes of obscenity
related to their performances at Millennium.

383. Millennium is categorized as a NAICS code 72 entity.

384. Millennium presents lawful, constitutionally protected entertainment
in conformity with its various licenses, permits, and/or government approvals,

including but not limited to:

a. A Sexually Oriented Business Permit issued by the City of Dallas;
82

Case 2:21-cv-00447-LA Filed 04/07/21 Page 82 of 200 Document 1
b. A Mixed Beverage Permit issued by the Texas Alcohol Beverage

Commission;
c. A Late Hours Permit issued by the Texas Alcohol Beverage

Commission;

d. A Catering Permit issued by the Texas Alcohol Beverage

Commission;
e. A Cartage Permit issued by the Texas Alcohol Beverage

Commission;

f. A Food and Beverage Certificate issued by the Texas Alcohol

Beverage Commission;
g. An Alcohol Permit issued by the City of Dallas; and

h. An Alcohol Permit issued by Dallas County.

385. Millennium is, as of the filing of this action, currently open for business;
however, in order to open, Millennium changed its operations and obtained a Food

and Beverage Certificate from the Texas Alcohol Beverage Commission, which

requires alcohol sales to be less than 51% of total sales. As was required by local

and/or state Public Health Orders, Millennium closed for business on March 16, 2020;
it reopened on May 22, 2020, but on June 26, 2020 closed again, and reopened again

on July 18, 2020. As a direct and proximate result of such municipal pandemic-related

closures and limitations, Millennium has suffered significant business and financial

losses.
386. In order to mitigate its business losses, to provide monetary relief to its

employees (since a controlling percentage of Second Draw PPP loans must be used

for employee wages and salaries), and to be able to purchase PPE and make
Pandemic-related repairs and/or upgrades to its facility (since the Second Draw PPP

expanded the loan’s eligible uses), Millennium applied for a Second Draw PPP.

Case 2:21-cv-00447-LA Filed 04/07/21 Page 83 of 200 Document 1
387. Millennium has submitted an application for a Second Draw PPP

through its lender, which is an approved SBA lender.
388. Pursuant to 15 U.S.C. § 636(a)(36)(F)(ii)(I), 15 U.S.C. § 636(a)(37)(K),

and/or 15 U.S.C. § 636(a)(F)(iii), Millennium’s lender has operated and will operate

as a delegate of the SBA in the processing and approval or disapproval of the Second

Draw PPP sought by Millennium.
389. Millennium is fully qualified—but for the Regulation, the SOP, the

Incorporating Statute, and/or the SBA’s application of all of the same—to receive a

Second Draw PPP loan under all other relevant statutes, regulations, and procedures.

390. Millennium received a First Draw PPP loan under the CARES Act
pursuant to an injunction and ruling by the United States District Court for the

Eastern District of Michigan.

391. Millennium’s lender has informed it that its Second Draw PPP
application requires “further research” for continued processing.

392. Millennium is, through its legal counsel, aware that other similar

businesses have received correspondence from the SBA in regard to Second Draw

PPP loan applications wherein the SBA has stated: “Strip clubs remain ineligible for
PPP loans. See 13 CFR § 120.110(p).”

393. Millennium is also, through its legal counsel, aware that, irrespective of

the above, other similar “strip clubs” have nevertheless received Second Draw PPP

loans.
394. Millennium reasonably believes, based on the information that it has

received, the information disclosed and presented in the previous proceedings that

resulted in the Regulation and SOP being enjoined and/or barred from enforcement
(much of which is detailed verbatim below), and the actions already taken by the SBA

with regard to its Second Draw PPP loan application and the applications of other

similar businesses as described both above and below (including the applications of
84

Case 2:21-cv-00447-LA Filed 04/07/21 Page 84 of 200 Document 1
the other Plaintiffs here), that its Second Draw PPP application will be rejected or

fatally delayed by the SBA due to the Regulation, the SOP, the Incorporating Statute,
and/or the SBA’s application of the same.

395. In the event that Millennium is unable to obtain a Second Draw PPP, it

may lack the staff, funds, and necessary PPE and facility upgrades to be able to

continue to operate given the local Pandemic-related capacity restrictions, which may
well result in the permanent ruination of its business; its inability to engage in

protected First Amendment activities; and the inability of its staff, entertainers, and

customers to continue to engage in, associate for the purposes of engaging in, and/or

view, protected First Amendment activities.
Club Sinrock LLC (“Sinrock Alaska”)

396. Sinrock Alaska is a non-alcohol serving commercial establishment open

to the consenting adult public which has presented, presents, and desires to continue
to present in the future, live female performance dance entertainment which is, at

times, fully-clothed, topless, and/or fully nude. All of the entertainment presented at

Sinrock Alaska is expression presumptively protected under the First Amendment to

the United States Constitution and appeals to normal, healthy, sexual desires.
397. Sinrock Alaska has never been charged, let alone convicted, of any

crimes of obscenity. Similarly, none of the entertainers who have performed on

Sinrock Alaska’s premises have ever been charged, let alone convicted, of any crimes

of obscenity related to their performances at Sinrock Alaska.
398. Sinrock Alaska is categorized as a NAICS code 72 entity.

399. Sinrock Alaska presents lawful, constitutionally protected

entertainment in conformity with its various licenses, permits, and/or government
approvals, including but not limited to its Adult Oriented Establishment License

issued by the City of Anchorage.

Case 2:21-cv-00447-LA Filed 04/07/21 Page 85 of 200 Document 1
400. Sinrock Alaska is, as of the filing of this action, currently open for

business at 50% capacity. As was required by local and/or state Public Health Orders,
Sinrock Alaska closed for business on March 15, 2020. Pursuant to evolving local

and/or state Public Health Orders, Sinrock Alaska reopened on May 13, 2020; closed

again from August 1, 2020, through September 1, 2020; and closed again from

December 1, 2020, through December 31, 2020. As a direct and proximate result of
such municipal pandemic-related closures and limitations, Sinrock Alaska has

suffered significant business and financial losses.

401. In order to mitigate its business losses, to provide monetary relief to its

employees (since a controlling percentage of Second Draw PPP loans must be used
for employee wages and salaries), and to be able to purchase PPE and make

Pandemic-related repairs and/or upgrades to its facility (since the Second Draw PPP

expanded the loan’s eligible uses), Sinrock Alaska applied for a Second Draw PPP.
402. Sinrock Alaska has submitted an application for a Second Draw PPP

through its lender, which is an approved SBA lender.

403. Pursuant to 15 U.S.C. § 636(a)(36)(F)(ii)(I), 15 U.S.C. § 636(a)(37)(K),

and/or 15 U.S.C. § 636(a)(F)(iii), Sinrock Alaska’s lender has operated and will
operate as a delegate of the SBA in the processing and approval or disapproval of the

Second Draw PPP sought by Sinrock Alaska.

404. Sinrock Alaska is fully qualified—but for the Regulation, the SOP, the

Incorporating Statute, and/or the SBA’s application of all of the same—to receive a
Second Draw PPP loan under all other relevant statutes, regulations, and procedures.

405. Sinrock Alaska received a First Draw PPP loan under the CARES Act

without litigation.
406. Sinrock Alaska’s lender received an e-mail from an SBA representative

at the Seattle District Office who stated “Strip clubs remain ineligible for PPP loans.

See 13 CFR § 120.110(p)”; thereby, confirming that any denial and/or delay on
86

Case 2:21-cv-00447-LA Filed 04/07/21 Page 86 of 200 Document 1
Sinrock Alaska’s application is solely predicated on the Regulation, the SOP, the

Incorporating Statute, and/or the SBA’s interpretation and/or application thereof.
407. Sinrock Alaska is also, through its legal counsel, aware that,

irrespective of the above, other similar “strip clubs” have nevertheless received

Second Draw PPP loans.

408. Sinrock Alaska reasonably believes, based on the information that it has
received, the information disclosed and presented in the previous proceedings that

resulted in the Regulation and SOP being enjoined and/or barred from enforcement

(much of which is detailed verbatim below), and the actions already taken by the SBA

with regard to its Second Draw PPP loan application and the applications of other
similar businesses as described both above and below (including the applications of

the other Plaintiffs here), that its Second Draw PPP application will be rejected or

fatally delayed by the SBA due to the Regulation, the SOP, the Incorporating Statute,
and/or the SBA’s application of the same.

409. In the event that Sinrock Alaska is unable to obtain a Second Draw PPP,

it may lack the staff, funds, and necessary PPE and facility upgrades to be able to

continue to operate given the local Pandemic-related capacity restrictions, which may
well result in the permanent ruination of its business; its inability to engage in

protected First Amendment activities; and the inability of its staff, entertainers, and

customers to continue to engage in, associate for the purposes of engaging in, and/or

view, protected First Amendment activities.
Club Sinrock LLC (“Sinrock Washington”)

410. Sinrock Washington is a non-alcohol serving commercial establishment

open to the consenting adult public which has presented, presents, and desires to
continue to present in the future, live female performance dance entertainment which

is, at times, fully-clothed, topless, and/or fully nude. All of the entertainment

presented at Sinrock Washington is expression presumptively protected under the
87

Case 2:21-cv-00447-LA Filed 04/07/21 Page 87 of 200 Document 1
First Amendment to the United States Constitution and appeals to normal, healthy,

sexual desires.
411. Sinrock Washington has never been charged, let alone convicted, of any

crimes of obscenity. Similarly, none of the entertainers who have performed on

Sinrock Washington’s premises have ever been charged, let alone convicted, of any

crimes of obscenity related to their performances at Sinrock Washington.
412. Sinrock Washington is categorized as a NAICS code 71 entity.

413. Sinrock Washington presents lawful, constitutionally protected

entertainment in conformity with its various licenses, permits, and/or government

approvals, including but not limited to its Adult Oriented Establishment License
issued by the City of Renton.

414. Sinrock Washington is, as of the filing of this action, currently open for

business at 50% capacity. As was required by local and/or state Public Health Orders,
Sinrock Washington closed for business on March 15, 2020. Pursuant to evolving local

and/or state Public Health Orders, Sinrock Washington reopened on October 22, 2020

and closed again from November 15, 2020, through February 19, 2021. As a direct

and proximate result of such municipal pandemic-related closures and limitations,
Sinrock Washington has suffered significant business and financial losses.

415. In order to mitigate its business losses, to provide monetary relief to its

employees (since a controlling percentage of Second Draw PPP loans must be used

for employee wages and salaries), and to be able to purchase PPE and make
Pandemic-related repairs and/or upgrades to its facility (since the Second Draw PPP

expanded the loan’s eligible uses), Sinrock Washington applied for a Second Draw

PPP.
416. Sinrock Washington has submitted an application for a Second Draw

PPP through its lender, which is an approved SBA lender.

Case 2:21-cv-00447-LA Filed 04/07/21 Page 88 of 200 Document 1
417. Pursuant to 15 U.S.C. § 636(a)(36)(F)(ii)(I), 15 U.S.C. § 636(a)(37)(K),

and/or 15 U.S.C. § 636(a)(F)(iii), Sinrock Washington’s lender has operated and will
operate as a delegate of the SBA in the processing and approval or disapproval of the

Second Draw PPP sought by Sinrock Washington.

418. Sinrock Washington is fully qualified—but for the Regulation, the SOP,

the Incorporating Statute, and/or the SBA’s application of all of the same—to receive
a Second Draw PPP loan under all other relevant statutes, regulations, and

procedures.

419. Sinrock Washington received a First Draw PPP loan under the CARES

Act without litigation.
420. Sinrock Washington’s lender received an e-mail from an SBA

representative at the Seattle District Office who stated “Strip clubs remain ineligible

for PPP loans. See 13 CFR § 120.110(p)”; thereby, confirming that any denial and/or
delay on Sinrock Washington’s application is solely predicated on the Regulation, the

SOP, the Incorporating Statute, and/or the SBA’s interpretation and/or application

thereof.

421. Sinrock Washington is also, through its legal counsel, aware that,
irrespective of the above, other similar “strip clubs” have nevertheless received

Second Draw PPP loans.

422. Sinrock Washington reasonably believes, based on the information that

it has received, the information disclosed and presented in the previous proceedings
that resulted in the Regulation and SOP being enjoined and/or barred from

enforcement (much of which is detailed verbatim below), and the actions already

taken by the SBA with regard to its Second Draw PPP loan application and the
applications of other similar businesses as described both above and below (including

the applications of the other Plaintiffs here), that its Second Draw PPP application

Case 2:21-cv-00447-LA Filed 04/07/21 Page 89 of 200 Document 1
will be rejected or fatally delayed by the SBA due to the Regulation, the SOP, the

Incorporating Statute, and/or the SBA’s application of the same.
423. In the event that Sinrock Washington is unable to obtain a Second Draw

PPP, it may lack the staff, funds, and necessary PPE and facility upgrades to be able

to continue to operate given the local Pandemic-related capacity restrictions, which

may well result in the permanent ruination of its business; its inability to engage in
protected First Amendment activities; and the inability of its staff, entertainers, and

customers to continue to engage in, associate for the purposes of engaging in, and/or

view, protected First Amendment activities.

Club Sinrock LLC (“Sinrock Oregon”)
424. Sinrock Oregon is a food and alcohol-serving commercial establishment

open to the consenting adult public which has presented, presents, and desires to

continue to present in the future, live female performance dance entertainment which
is, at times, fully-clothed, topless, and/or fully nude. All of the entertainment

presented at Sinrock Oregon is expression presumptively protected under the First

Amendment to the United States Constitution and appeals to normal, healthy, sexual

desires.
425. Sinrock Oregon has never been charged, let alone convicted, of any

crimes of obscenity. Similarly, none of the entertainers who have performed on

Sinrock Oregon’s premises have ever been charged, let alone convicted, of any crimes

of obscenity related to their performances at Sinrock Oregon.
426. Sinrock Oregon is categorized as a NAICS code 72 entity.

427. Sinrock Oregon presents lawful, constitutionally protected

entertainment in conformity with its various licenses, permits, and/or government
approvals, including but not limited to:

a. A Full Retain Dispensary Liquor License issued by the Oregon

Liquor Control Commission;
90

Case 2:21-cv-00447-LA Filed 04/07/21 Page 90 of 200 Document 1
b. A Restaurant Food Service License Permit issued by the City of

Portland; and
c. A Gaming License/Lottery issued by the Oregon State Lottery.

428. Sinrock Oregon is, as of the filing of this action, currently open for

business at 50% capacity with limited operating hours. As was required by local

and/or state Public Health Orders, Sinrock Oregon closed for business on March 15,
2020. Pursuant to evolving local and/or state Public Health Orders, Sinrock Oregon

reopened on September 11, 2020 and closed again from November 15, 2020, through

February 19, 2021. As a direct and proximate result of such municipal pandemic-

related closures and limitations, Sinrock Oregon has suffered significant business
and financial losses.

429. In order to mitigate its business losses, to provide monetary relief to its

employees (since a controlling percentage of Second Draw PPP loans must be used
for employee wages and salaries), and to be able to purchase PPE and make

Pandemic-related repairs and/or upgrades to its facility (since the Second Draw PPP

expanded the loan’s eligible uses), Sinrock Oregon applied for a Second Draw PPP.

430. Sinrock Oregon has submitted an application for a Second Draw PPP
through its lender, which is an approved SBA lender.

431. Pursuant to 15 U.S.C. § 636(a)(36)(F)(ii)(I), 15 U.S.C. § 636(a)(37)(K),

and/or 15 U.S.C. § 636(a)(F)(iii), Sinrock Oregon’s lender has operated and will

operate as a delegate of the SBA in the processing and approval or disapproval of the
Second Draw PPP sought by Sinrock Oregon.

432. Sinrock Oregon is fully qualified—but for the Regulation, the SOP, the

Incorporating Statute, and/or the SBA’s application of all of the same—to receive a
Second Draw PPP loan under all other relevant statutes, regulations, and procedures.

433. Sinrock Oregon received a First Draw PPP loan under the CARES Act

without litigation.
91

Case 2:21-cv-00447-LA Filed 04/07/21 Page 91 of 200 Document 1
434. Sinrock Oregon’s lender received an e-mail from an SBA representative

at the Seattle District Office who stated “Strip clubs remain ineligible for PPP loans.
See 13 CFR § 120.110(p)”; thereby, confirming that any denial and/or delay on

Sinrock Oregon’s application is solely predicated on the Regulation, the SOP, the

Incorporating Statute, and/or the SBA’s interpretation and/or application thereof.

435. Sinrock Oregon is also, through its legal counsel, aware that,
irrespective of the above, other similar “strip clubs” have nevertheless received

Second Draw PPP loans.

436. Sinrock Oregon reasonably believes, based on the information that it

has received, the information disclosed and presented in the previous proceedings
that resulted in the Regulation and SOP being enjoined and/or barred from

enforcement (much of which is detailed verbatim below), and the actions already

taken by the SBA with regard to its Second Draw PPP loan application and the
applications of other similar businesses as described both above and below (including

the applications of the other Plaintiffs here), that its Second Draw PPP application

will be rejected or fatally delayed by the SBA due to the Regulation, the SOP, the

Incorporating Statute, and/or the SBA’s application of the same.
437. In the event that Sinrock Oregon is unable to obtain a Second Draw

PPP, it may lack the staff, funds, and necessary PPE and facility upgrades to be able

to continue to operate given the local Pandemic-related capacity restrictions, which

may well result in the permanent ruination of its business; its inability to engage in
protected First Amendment activities; and the inability of its staff, entertainers, and

customers to continue to engage in, associate for the purposes of engaging in, and/or

view, protected First Amendment activities.
Club Sinrock DT LLC (“Sinrock DT”)

438. Sinrock DT is a non-alcohol serving commercial establishment open to

the consenting adult public which has presented, presents, and desires to continue to
92

Case 2:21-cv-00447-LA Filed 04/07/21 Page 92 of 200 Document 1
present in the future, live female performance dance entertainment which is, at

times, fully-clothed, topless, and/or fully nude. All of the entertainment presented at
Sinrock DT is expression presumptively protected under the First Amendment to the

United States Constitution and appeals to normal, healthy, sexual desires.

439. Sinrock DT has never been charged, let alone convicted, of any crimes of

obscenity. Similarly, none of the entertainers who have performed on Sinrock DT’s
premises have ever been charged, let alone convicted, of any crimes of obscenity

related to their performances at Sinrock DT.

440. Sinrock DT is categorized as a NAICS code 72 entity.

441. Sinrock DT presents lawful, constitutionally protected entertainment in
conformity with its various licenses, permits, and/or government approvals, including

but not limited to:

a. A Full Retain Dispensary Liquor License issued by the DT Liquor
Control Commission; and

b. A Restaurant Food Service License Permit issued by the City of

Portland.

442. Sinrock DT is, as of the filing of this action, currently not open for
business as a result of the local Public Health Orders. As was required by local and/or

state Public Health Orders, Sinrock DT closed for business on March 15, 2020. Local

Public Health Orders have not permitted Sinrock DT to reopen. As a direct and

proximate result of such municipal pandemic-related closures and limitations,
Sinrock DT has suffered significant business and financial losses.

443. In order to mitigate its business losses, to provide monetary relief to its

employees (since a controlling percentage of Second Draw PPP loans must be used
for employee wages and salaries), and to be able to purchase PPE and make

Pandemic-related repairs and/or upgrades to its facility (since the Second Draw PPP

expanded the loan’s eligible uses), Sinrock DT applied for a Second Draw PPP.
93

Case 2:21-cv-00447-LA Filed 04/07/21 Page 93 of 200 Document 1
444. Sinrock DT has submitted an application for a Second Draw PPP

through its lender, which is an approved SBA lender.
445. Pursuant to 15 U.S.C. § 636(a)(36)(F)(ii)(I), 15 U.S.C. § 636(a)(37)(K),

and/or 15 U.S.C. § 636(a)(F)(iii), Sinrock DT’s lender has operated and will operate

as a delegate of the SBA in the processing and approval or disapproval of the Second

Draw PPP sought by Sinrock DT.
446. Sinrock DT is fully qualified—but for the Regulation, the SOP, the

Incorporating Statute, and/or the SBA’s application of all of the same—to receive a

Second Draw PPP loan under all other relevant statutes, regulations, and procedures.

447. Sinrock DT received a First Draw PPP loan under the CARES Act
without litigation.

448. Sinrock DT’s lender received an e-mail from an SBA representative at

the Seattle District Office who stated “Strip clubs remain ineligible for PPP loans.
See 13 CFR § 120.110(p)”; thereby, confirming that any denial and/or delay on

Sinrock DT’s application is solely predicated on the Regulation, the SOP, the

Incorporating Statute, and/or the SBA’s interpretation and/or application thereof.

449. Sinrock DT is also, through its legal counsel, aware that, irrespective of
the above, other similar “strip clubs” have nevertheless received Second Draw PPP

loans.

450. Sinrock DT reasonably believes, based on the information that it has

received, the information disclosed and presented in the previous proceedings that
resulted in the Regulation and SOP being enjoined and/or barred from enforcement

(much of which is detailed verbatim below), and the actions already taken by the SBA

with regard to its Second Draw PPP loan application and the applications of other
similar businesses as described both above and below (including the applications of

the other Plaintiffs here), that its Second Draw PPP application will be rejected or

Case 2:21-cv-00447-LA Filed 04/07/21 Page 94 of 200 Document 1
fatally delayed by the SBA due to the Regulation, the SOP, the Incorporating Statute,

and/or the SBA’s application of the same.
451. In the event that Sinrock DT is unable to obtain a Second Draw PPP, it

may lack the staff, funds, and necessary PPE and facility upgrades to be able to

reopen when given the local Pandemic-related capacity restrictions, which may well

result in the permanent ruination of its business; its inability to engage in protected
First Amendment activities; and the inability of its staff, entertainers, and customers

to continue to engage in, associate for the purposes of engaging in, and/or view,

protected First Amendment activities.

Kimmico, Inc. (“Kimmico”)
452. Kimmico is an alcohol-serving commercial establishment open to the

consenting adult public which has presented, presents, and desires to continue to

present in the future, live female performance dance entertainment which is, at
times, fully-clothed, topless, and/or fully nude. All of the entertainment presented at

Kimmico is expression presumptively protected under the First Amendment to the

United States Constitution and appeals to normal, healthy, sexual desires.

453. Kimmico has never been charged, let alone convicted, of any crimes of
obscenity. Similarly, none of the entertainers who have performed on Kimmico’s

premises have ever been charged, let alone convicted, of any crimes of obscenity

related to their performances at Kimmico.

454. Kimmico is categorized as a NAICS code 72 entity.
455. Kimmico presents lawful, constitutionally protected entertainment in

conformity with its various licenses, permits, and/or government approvals, including

but not limited to its liquor license issued by the State of Maryland.
456. Kimmico is, as of the filing of this action, currently open for business at

50% capacity. As was required by local and/or state Public Health Orders, Kimmico

closed for business on or about March 15, 2020. Pursuant to the evolving state and/or
95

Case 2:21-cv-00447-LA Filed 04/07/21 Page 95 of 200 Document 1
local Public Health Orders, Kimmico reopened and closed four times culminating

with its most recent reopening on or about March 15, 2021 after being closed since
December 11, 2020. As a direct and proximate result of such municipal pandemic-

related closures and limitations, Kimmico has suffered significant business and

financial losses.

457. In order to mitigate its business losses, to provide monetary relief to its
employees (since a controlling percentage of Second Draw PPP loans must be used

for employee wages and salaries), and to be able to purchase PPE and make

Pandemic-related repairs and/or upgrades to its facility (since the Second Draw PPP

expanded the loan’s eligible uses), Kimmico applied for a Second Draw PPP.
458. Kimmico has submitted an application for a Second Draw PPP through

its lender, which is an approved SBA lender.

459. Pursuant to 15 U.S.C. § 636(a)(36)(F)(ii)(I), 15 U.S.C. § 636(a)(37)(K),
and/or 15 U.S.C. § 636(a)(F)(iii), Kimmico’s lender has operated and will operate as a

delegate of the SBA in the processing and approval or disapproval of the Second Draw

PPP sought by Kimmico.

460. Kimmico is fully qualified—but for the Regulation, the SOP, the
Incorporating Statute, and/or the SBA’s application of all of the same—to receive a

Second Draw PPP loan under all other relevant statutes, regulations, and procedures.

461. Kimmico received a First Draw PPP loan under the CARES Act without

litigation.
462. Kimmico’s has not received any correspondence in regard to its Second

Draw PPP application.

463. Kimmico is, through its legal counsel, aware that other similar
businesses have received correspondence from the SBA in regard to Second Draw

PPP loan applications wherein the SBA has stated: “Strip clubs remain ineligible for

PPP loans. See 13 CFR § 120.110(p).”
96

Case 2:21-cv-00447-LA Filed 04/07/21 Page 96 of 200 Document 1
464. Kimmico is also, through its legal counsel, aware that, irrespective of

the above, other similar “strip clubs” have nevertheless received Second Draw PPP
loans.

465. Kimmico reasonably believes, based on the information that it has

received, the information disclosed and presented in the previous proceedings that

resulted in the Regulation and SOP being enjoined and/or barred from enforcement
(much of which is detailed verbatim below), and the actions already taken by the SBA

with regard to its Second Draw PPP loan application and the applications of other

similar businesses as described both above and below (including the applications of

the other Plaintiffs here), that its Second Draw PPP application will be rejected or
fatally delayed by the SBA due to the Regulation, the SOP, the Incorporating Statute,

and/or the SBA’s application of the same.

466. In the event that Kimmico is unable to obtain a Second Draw PPP, it
may lack the staff, funds, and necessary PPE and facility upgrades to be able to

continue to operate given the local Pandemic-related capacity restrictions, which may

well result in the permanent ruination of its business; its inability to engage in

protected First Amendment activities; and the inability of its staff, entertainers, and
customers to continue to engage in, associate for the purposes of engaging in, and/or

view, protected First Amendment activities.

Polmour, Inc. (“Polmour”)

467. Polmour is a food and alcohol-serving commercial establishment open to
the consenting adult public which has presented, presents, and desires to continue to

present in the future, live female performance dance entertainment which is, at

times, fully-clothed or topless. All of the entertainment presented at Polmour is
expression presumptively protected under the First Amendment to the United States

Constitution and appeals to normal, healthy, sexual desires.

Case 2:21-cv-00447-LA Filed 04/07/21 Page 97 of 200 Document 1
468. Polmour has never been charged, let alone convicted, of any crimes of

obscenity. Similarly, none of the entertainers who have performed on Polmour’s
premises have ever been charged, let alone convicted, of any crimes of obscenity

related to their performances at Polmour.

469. Polmour is categorized as a NAICS code 72 entity.

470. Polmour presents lawful, constitutionally protected entertainment in
conformity with its various licenses, permits, and/or government approvals, including

but not limited to a Liquor License issued by the State of Texas.

471. Polmour is, as of the filing of this action, currently open for business. As

was required by local and/or state Public Health Orders, Polmour closed for business
on March 17, 2020. Pursuant to the evolving state and local Public Health Orders,

Polmour closed and reopened several times culminating with its most recent

reopening on October 14, 2020. As a direct and proximate result of such municipal
pandemic-related closures and limitations, Polmour has suffered significant business

and financial losses.

472. In order to mitigate its business losses, to provide monetary relief to its

employees (since a controlling percentage of Second Draw PPP loans must be used
for employee wages and salaries), and to be able to purchase PPE and make

Pandemic-related repairs and/or upgrades to its facility (since the Second Draw PPP

expanded the loan’s eligible uses), Polmour applied for a Second Draw PPP.

473. Polmour has submitted an application for a Second Draw PPP through
its lender, which is an approved SBA lender.

474. Pursuant to 15 U.S.C. § 636(a)(36)(F)(ii)(I), 15 U.S.C. § 636(a)(37)(K),

and/or 15 U.S.C. § 636(a)(F)(iii), Polmour’s lender has operated and will operate as a
delegate of the SBA in the processing and approval or disapproval of the Second Draw

PPP sought by Polmour.

Case 2:21-cv-00447-LA Filed 04/07/21 Page 98 of 200 Document 1
475. Polmour is fully qualified—but for the Regulation, the SOP, the

Incorporating Statute, and/or the SBA’s application of all of the same—to receive a
Second Draw PPP loan under all other relevant statutes, regulations, and procedures.

476. Polmour received a First Draw PPP loan under the CARES Act pursuant

to an injunction and ruling by the United States District Court for the Eastern

District of Michigan.
477. Polmour’s lender has not provided Polmour an update on the status of

its Second Draw PPP application.

478. Polmour is, through its legal counsel, aware that other similar

businesses have received correspondence from the SBA in regard to Second Draw
PPP loan applications wherein the SBA has stated: “Strip clubs remain ineligible for

PPP loans. See 13 CFR § 120.110(p).”

479. Polmour is also, through its legal counsel, aware that, irrespective of the
above, other similar “strip clubs” have nevertheless received Second Draw PPP loans.

480. Polmour reasonably believes, based on the information that it has

received, the information disclosed and presented in the previous proceedings that

resulted in the Regulation and SOP being enjoined and/or barred from enforcement
(much of which is detailed verbatim below), and the actions already taken by the SBA

with regard to its Second Draw PPP loan application and the applications of other

similar businesses as described both above and below (including the applications of

the other Plaintiffs here), that its Second Draw PPP application will be rejected or
fatally delayed by the SBA due to the Regulation, the SOP, the Incorporating Statute,

and/or the SBA’s application of the same.

481. In the event that Polmour is unable to obtain a Second Draw PPP, it
may lack the staff, funds, and necessary PPE and facility upgrades to be able to

continue to operate given the local Pandemic-related capacity restrictions, which may

well result in the permanent ruination of its business; its inability to engage in
99

Case 2:21-cv-00447-LA Filed 04/07/21 Page 99 of 200 Document 1
protected First Amendment activities; and the inability of its staff, entertainers, and

customers to continue to engage in, associate for the purposes of engaging in, and/or
view, protected First Amendment activities.

Sisyphian, LLC (“Sisyphian”)

482. Sisyphian is a non-alcohol serving commercial establishment open to the

consenting adult public which has presented, presents, and desires to continue to
present in the future, live female performance dance entertainment which is, at

times, fully-clothed, topless, and/or fully nude. All of the entertainment presented at

Sisyphian is expression presumptively protected under the First Amendment to the

United States Constitution and appeals to normal, healthy, sexual desires.
483. Sisyphian has never been charged, let alone convicted, of any crimes of

obscenity. Similarly, none of the entertainers who have performed on Sisyphian’s

premises have ever been charged, let alone convicted, of any crimes of obscenity
related to their performances at Sisyphian.

484. Sisyphian is categorized as a NAICS code 72 entity.

485. Sisyphian presents lawful, constitutionally protected entertainment in

conformity with its various licenses, permits, and/or government approvals, including
but not limited to:

a. A Cafe Entertainment/Shows-Adult Permit issued by the City of

Las Angeles; and

b. A Retail Sales Certificate issued by the State of California.
486. Sisyphian is, as of the filing of this action, currently not open for

business. As was required by local and/or state Public Health Orders, Sisyphian

closed for business on or about March 16, 2020. State and/or local Public Health
Orders have not permitted Sisyphian to reopen. As a direct and proximate result of

such municipal pandemic-related closures and limitations, Sisyphian has suffered

significant business and financial losses.
100

Case 2:21-cv-00447-LA Filed 04/07/21 Page 100 of 200 Document 1
487. In order to mitigate its business losses, to provide monetary relief to its

employees (since a controlling percentage of Second Draw PPP loans must be used
for employee wages and salaries), and to be able to purchase PPE and make

Pandemic-related repairs and/or upgrades to its facility (since the Second Draw PPP

expanded the loan’s eligible uses), Sisyphian applied for a Second Draw PPP.

488. Sisyphian has submitted an application for a Second Draw PPP through
its lender, which is an approved SBA lender.

489. Pursuant to 15 U.S.C. § 636(a)(36)(F)(ii)(I), 15 U.S.C. § 636(a)(37)(K),

and/or 15 U.S.C. § 636(a)(F)(iii), Sisyphian’s lender has operated and will operate as

a delegate of the SBA in the processing and approval or disapproval of the Second
Draw PPP sought by Sisyphian.

490. Sisyphian is fully qualified—but for the Regulation, the SOP, the

Incorporating Statute, and/or the SBA’s application of all of the same—to receive a
Second Draw PPP loan under all other relevant statutes, regulations, and procedures.

491. Sisyphian received a First Draw PPP loan under the CARES Act without

litigation.

492. Sisyphian’s has not received any correspondence from its lender
regarding the status of its Second Draw PPP application.

493. Sisyphian is, through its legal counsel, aware that other similar

businesses have received correspondence from the SBA in regard to Second Draw

PPP loan applications wherein the SBA has stated: “Strip clubs remain ineligible for
PPP loans. See 13 CFR § 120.110(p).”

494. Sisyphian is also, through its legal counsel, aware that, irrespective of

the above, other similar “strip clubs” have nevertheless received Second Draw PPP
loans.

495. Sisyphian reasonably believes, based on the information that it has

received, the information disclosed and presented in the previous proceedings that
101

Case 2:21-cv-00447-LA Filed 04/07/21 Page 101 of 200 Document 1
resulted in the Regulation and SOP being enjoined and/or barred from enforcement

(much of which is detailed verbatim below), and the actions already taken by the SBA
with regard to its Second Draw PPP loan application and the applications of other

similar businesses as described both above and below (including the applications of

the other Plaintiffs here), that its Second Draw PPP application will be rejected or

fatally delayed by the SBA due to the Regulation, the SOP, the Incorporating Statute,
and/or the SBA’s application of the same.

496. In the event that Sisyphian is unable to obtain a Second Draw PPP, it

may lack the staff, funds, and necessary PPE and facility upgrades to be able to

reopen when given the local Pandemic-related capacity restrictions, which may well
result in the permanent ruination of its business; its inability to engage in protected

First Amendment activities; and the inability of its staff, entertainers, and customers

to continue to engage in, associate for the purposes of engaging in, and/or view,
protected First Amendment activities.

689 Eatery, LLC (“689 Eatery”)

497. 689 Eatery is an alcohol-serving commercial establishment open to the

consenting adult public which has presented, presents, and desires to continue to
present in the future, live female performance dance entertainment that is, at times,

fully-clothed or topless. All of the entertainment presented at 689 Eatery is

expression presumptively protected under the First Amendment to the United States

Constitution and appeals to normal, healthy, sexual desires.
498. 689 Eatery has never been charged, let alone convicted, of any crimes of

obscenity. Similarly, none of the entertainers who have performed on 689 Eatery’s

premises have ever been charged, let alone convicted, of any crimes of obscenity
related to their performances at 689 Eatery.

499. 689 Eatery is categorized as a NAICS code 72 entity.

102

Case 2:21-cv-00447-LA Filed 04/07/21 Page 102 of 200 Document 1
500. 689 Eatery presents lawful, constitutionally protected entertainment in

conformity with its various licenses, permits, and/or government approvals, including
but not limited to, a Liquor License issued by the State of New York.

501. 689 Eatery is, as of the filing of this action, currently not open for

business. As was required by state and/or local Public Health Orders, 689 Eatery

closed for business on March 15, 2020. State and/or local Public Health Orders have
not permitted 689 Eatery to reopen. As a direct and proximate result of such

municipal pandemic-related closures and limitations, 689 Eatery has suffered

significant business and financial losses.

502. In order to mitigate its business losses, to provide monetary relief to its
employees (since a controlling percentage of Second Draw PPP loans must be used

for employee wages and salaries), and to be able to purchase PPE and make

Pandemic-related repairs and/or upgrades to its facility (since the Second Draw PPP
expanded the loan’s eligible uses), 689 Eatery applied for a Second Draw PPP.

503. 689 Eatery has submitted an application for a Second Draw PPP

through its lender, which is an approved SBA lender.

504. Pursuant to 15 U.S.C. § 636(a)(36)(F)(ii)(I), 15 U.S.C. § 636(a)(37)(K),
and/or 15 U.S.C. § 636(a)(F)(iii), 689 Eatery’s lender has operated and will operate as

a delegate of the SBA in the processing and approval or disapproval of the Second

Draw PPP sought by 689 Eatery.

505. 689 Eatery is fully qualified—but for the Regulation, the SOP, the
Incorporating Statute, and/or the SBA’s application of all of the same—to receive a

Second Draw PPP loan under all other relevant statutes, regulations, and procedures.

506. 689 Eatery received a First Draw PPP loan under the CARES Act
pursuant to an injunction and ruling by the United States District Court for the

Eastern District of Michigan.

103

Case 2:21-cv-00447-LA Filed 04/07/21 Page 103 of 200 Document 1
507. 689 Eatery’s lender denied its Second Draw PPP application stating

“[i]nformation supplied by the SBA indicates that applicant is not eligible for a
Paycheck Protection Program loan.” Given that 689 Eatery received a First Draw

PPP loan, 689 Eatery believes this denial is solely predicated on the Regulation, the

SOP, the Incorporating Statute, and/or the SBA’s interpretation and/or application

thereof.
508. 689 Eatery is, through its legal counsel, aware that other similar

businesses have received correspondence from the SBA in regard to Second Draw

PPP loan applications wherein the SBA has stated: “Strip clubs remain ineligible for

PPP loans. See 13 CFR § 120.110(p).”
509. 689 Eatery is also, through its legal counsel, aware that, irrespective of

the above, other similar “strip clubs” have nevertheless received Second Draw PPP

loans.
510. 689 Eatery reasonably believes, based on the information that it has

received, the information disclosed and presented in the previous proceedings that

resulted in the Regulation and SOP being enjoined and/or barred from enforcement

(much of which is detailed verbatim below), and the actions already taken by the SBA
with regard to its Second Draw PPP loan application and the applications of other

similar businesses as described both above and below (including the applications of

the other Plaintiffs here), that its Second Draw PPP application has been rejected by

the SBA due to the Regulation, the SOP, the Incorporating Statute, and/or the SBA’s
application of the same.

511. In the event that 689 Eatery is unable to obtain a Second Draw PPP, it

may lack the staff, funds, and necessary PPE and facility upgrades to be able to
reopen given the local Pandemic-related capacity restrictions, which may well result

in the permanent ruination of its business; its inability to engage in protected First

Amendment activities; and the inability of its staff, entertainers, and customers to
104

Case 2:21-cv-00447-LA Filed 04/07/21 Page 104 of 200 Document 1
continue to engage in, associate for the purposes of engaging in, and/or view,

protected First Amendment activities.
Syzygy, LLC (“Syzygy”)

512. Syzygy is an alcohol-serving commercial establishment open to the

consenting adult public which has presented, presents, and desires to continue to

present in the future, fully-clothed (bikini) live female performance dance
entertainment. All of the entertainment presented at Syzygy is expression

presumptively protected under the First Amendment to the United States

Constitution and appeals to normal, healthy, sexual desires.

513. Syzygy has never been charged, let alone convicted, of any crimes of
obscenity. Similarly, none of the entertainers who have performed on Syzygy’s

premises have ever been charged, let alone convicted, of any crimes of obscenity

related to their performances at Syzygy.
514. Syzygy is categorized as a NAICS code 72 entity.

515. Syzygy presents lawful, constitutionally protected entertainment in

conformity with its various licenses, permits, and/or government approvals, including

but not limited to:
a. An On Sale General Public Premises Alcohol License issued by

the California Department of Alcohol Beverage Control;

b. A Tobacco Retailer Permit issued by the City of Los Angeles; and

c. A Cafe Entertainment/Shows – Adult Permit issued by the City
of Los Angeles.

516. Syzygy is, as of the filing of this action, currently not open for business.

As was required by local and/or state Public Health Orders, Syzygy closed for
business on March 16, 2020. Except for a four day period, state and/or local Public

Health Orders have not permitted Syzygy to reopen. As a direct and proximate result

105

Case 2:21-cv-00447-LA Filed 04/07/21 Page 105 of 200 Document 1
of such municipal pandemic-related closures and limitations, Syzygy has suffered

significant business and financial losses.
517. In order to mitigate its business losses, to provide monetary relief to its

employees (since a controlling percentage of Second Draw PPP loans must be used

for employee wages and salaries), and to be able to purchase PPE and make

Pandemic-related repairs and/or upgrades to its facility (since the Second Draw PPP
expanded the loan’s eligible uses), Syzygy applied for a Second Draw PPP.

518. Syzygy has submitted an application for a Second Draw PPP through its

lender, which is an approved SBA lender.

519. Pursuant to 15 U.S.C. § 636(a)(36)(F)(ii)(I), 15 U.S.C. § 636(a)(37)(K),
and/or 15 U.S.C. § 636(a)(F)(iii), Syzygy’s lender has operated and will operate as a

delegate of the SBA in the processing and approval or disapproval of the Second Draw

PPP sought by Syzygy.
520. Syzygy is fully qualified—but for the Regulation, the SOP, the

Incorporating Statute, and/or the SBA’s application of all of the same—to receive a

Second Draw PPP loan under all other relevant statutes, regulations, and procedures.

521. Syzygy received a First Draw PPP loan under the CARES Act without
litigation.

522. Syzygy’s has not received any correspondence from its lender regarding

the status of its Second Draw PPP application.

523. Syzygy is, through its legal counsel, aware that other similar businesses
have received correspondence from the SBA in regard to Second Draw PPP loan

applications wherein the SBA has stated: “Strip clubs remain ineligible for PPP loans.

See 13 CFR § 120.110(p).”
524. Syzygy is also, through its legal counsel, aware that, irrespective of the

above, other similar “strip clubs” have nevertheless received Second Draw PPP loans.

106

Case 2:21-cv-00447-LA Filed 04/07/21 Page 106 of 200 Document 1
525. Syzygy reasonably believes, based on the information that it has

received, the information disclosed and presented in the previous proceedings that
resulted in the Regulation and SOP being enjoined and/or barred from enforcement

(much of which is detailed verbatim below), and the actions already taken by the SBA

with regard to its Second Draw PPP loan application and the applications of other

similar businesses as described both above and below (including the applications of
the other Plaintiffs here), that its Second Draw PPP application will be rejected or

fatally delayed by the SBA due to the Regulation, the SOP, the Incorporating Statute,

and/or the SBA’s application of the same.

526. In the event that Syzygy is unable to obtain a Second Draw PPP, it may
lack the staff, funds, and necessary PPE and facility upgrades to be able to reopen

when given the local Pandemic-related capacity restrictions, which may well result

in the permanent ruination of its business; its inability to engage in protected First
Amendment activities; and the inability of its staff, entertainers, and customers to

continue to engage in, associate for the purposes of engaging in, and/or view,

protected First Amendment activities.

Brookhurst Venture, LLC (“Brookhurst”)
527. Brookhurst is an alcohol-serving commercial establishment open to the

consenting adult public which has presented, presents, and desires to continue to

present in the future, live female performance dance entertainment which is, at

times, fully-clothed or topless. All of the entertainment presented at Brookhurst is
expression presumptively protected under the First Amendment to the United States

Constitution and appeals to normal, healthy, sexual desires.

528. Brookhurst has never been charged, let alone convicted, of any crimes of
obscenity. Similarly, none of the entertainers who have performed on Brookhurst’s

premises have ever been charged, let alone convicted, of any crimes of obscenity

related to their performances at Brookhurst.
107

Case 2:21-cv-00447-LA Filed 04/07/21 Page 107 of 200 Document 1
529. Brookhurst is categorized as a NAICS code 72 entity.

530. Brookhurst presents lawful, constitutionally protected entertainment in
conformity with its various licenses, permits, and/or government approvals, including

but not limited to: an Alcohol License from the State of California and Restaurant

License issued by the County of Orange.

531. Brookhurst is, as of the filing of this action, open for business. As was
required by local and/or state Public Health Orders, Brookhurst closed for business

on March 17, 2020. Pursuant to the evolving local and/or state Public Health Orders,

Brookhurst reopened on October 1, 2020. As a direct and proximate result of such

municipal pandemic-related closures and limitations, Brookhurst has suffered
significant business and financial losses.

532. In order to mitigate its business losses, to provide monetary relief to its

employees (since a controlling percentage of Second Draw PPP loans must be used
for employee wages and salaries), and to be able to purchase PPE and make

Pandemic-related repairs and/or upgrades to its facility (since the Second Draw PPP

expanded the loan’s eligible uses), Brookhurst applied for a Second Draw PPP.

533. Brookhurst has submitted an application for a Second Draw PPP
through its lender, which is an approved SBA lender.

534. Pursuant to 15 U.S.C. § 636(a)(36)(F)(ii)(I), 15 U.S.C. § 636(a)(37)(K),

and/or 15 U.S.C. § 636(a)(F)(iii), Brookhurst’s lender has operated and will operate

as a delegate of the SBA in the processing and approval or disapproval of the Second
Draw PPP sought by Brookhurst.

535. Brookhurst is fully qualified—but for the Regulation, the SOP, the

Incorporating Statute, and/or the SBA’s application of all of the same—to receive a
Second Draw PPP loan under all other relevant statutes, regulations, and procedures.

108

Case 2:21-cv-00447-LA Filed 04/07/21 Page 108 of 200 Document 1
536. Brookhurst received a First Draw PPP loan under the CARES Act

pursuant to an injunction and ruling by the United States District Court for the
Eastern District of Michigan.

537. Brookhurst’s lender has informed it that its Second Draw PPP

application has been placed on an internal hold by the SBA.

538. Brookhurst is, through its legal counsel, aware that other similar
businesses have received correspondence from the SBA in regard to Second Draw

PPP loan applications wherein the SBA has stated: “Strip clubs remain ineligible for

PPP loans. See 13 CFR § 120.110(p).”

539. Brookhurst is also, through its legal counsel, aware that, irrespective of
the above, other similar “strip clubs” have nevertheless received Second Draw PPP

loans.

540. Brookhurst reasonably believes, based on the information that it has
received, the information disclosed and presented in the previous proceedings that

resulted in the Regulation and SOP being enjoined and/or barred from enforcement

(much of which is detailed verbatim below), and the actions already taken by the SBA

with regard to its Second Draw PPP loan application and the applications of other
similar businesses as described both above and below (including the applications of

the other Plaintiffs here), that its Second Draw PPP application will be rejected or

fatally delayed by the SBA due to the Regulation, the SOP, the Incorporating Statute,

and/or the SBA’s application of the same.
541. In the event that Brookhurst is unable to obtain a Second Draw PPP, it

may lack the staff, funds, and necessary PPE and facility upgrades to be able to

continue to operate given the local Pandemic-related capacity restrictions, which may
well result in the permanent ruination of its business; its inability to engage in

protected First Amendment activities; and the inability of its staff, entertainers, and

109

Case 2:21-cv-00447-LA Filed 04/07/21 Page 109 of 200 Document 1
customers to continue to engage in, associate for the purposes of engaging in, and/or

view, protected First Amendment activities.
City of Industry Hospitality Venture, Inc. (“Industry Venture”)

542. Industry Venture is a non-alcohol serving commercial establishment

open to the consenting adult public which has presented, presents, and desires to

continue to present in the future, live female performance dance entertainment which
is, at times, fully-clothed, topless and/or fully nude. All of the entertainment

presented at Industry Venture is expression presumptively protected under the First

Amendment to the United States Constitution and appeals to normal, healthy, sexual

desires.
543. Industry Venture has never been charged, let alone convicted, of any

crimes of obscenity. Similarly, none of the entertainers who have performed on

Industry Venture’s premises have ever been charged, let alone convicted, of any
crimes of obscenity related to their performances at Industry Venture.

544. Industry Venture is categorized as a NAICS code 72 entity.

545. Industry Venture presents lawful, constitutionally protected

entertainment in conformity with its various licenses, permits, and/or government
approvals, including but not limited to:

a. A Health Permit issued by the County of Los Angeles; and

b. A Restaurant License issued by the County of Los Angeles.

546. Industry Venture is, as of the filing of this action, closed for business. As
was required by local and/or state Public Health Orders, Industry Venture closed for

business on March 18, 2020. Pursuant to the evolving local and/or state Public Health

Orders, Industry Venture reopened on October 1, 2020, but on October 3, 2020 closed
again. Industry Venture reopened again on October 8, 2020, for two days, and

reopened again on October 15, 2020, for one day before closing again pursuant to local

and/or state Public Health Orders. As a direct and proximate result of such municipal
110

Case 2:21-cv-00447-LA Filed 04/07/21 Page 110 of 200 Document 1
pandemic-related closures and limitations, Industry Venture has suffered significant

business and financial losses.
547. In order to mitigate its business losses, to provide monetary relief to its

employees (since a controlling percentage of Second Draw PPP loans must be used

for employee wages and salaries), and to be able to purchase PPE and make

Pandemic-related repairs and/or upgrades to its facility (since the Second Draw PPP
expanded the loan’s eligible uses), Industry Venture applied for a Second Draw PPP.

548. Industry Venture has submitted an application for a Second Draw PPP

through its lender, which is an approved SBA lender.

549. Pursuant to 15 U.S.C. § 636(a)(36)(F)(ii)(I), 15 U.S.C. § 636(a)(37)(K),
and/or 15 U.S.C. § 636(a)(F)(iii), Industry Venture’s lender has operated and will

operate as a delegate of the SBA in the processing and approval or disapproval of the

Second Draw PPP sought by Industry Venture.
550. Industry Venture is fully qualified—but for the Regulation, the SOP, the

Incorporating Statute, and/or the SBA’s application of all of the same—to receive a

Second Draw PPP loan under all other relevant statutes, regulations, and procedures.

551. Industry Venture received a First Draw PPP loan under the CARES Act
pursuant to an injunction and ruling by the United States District Court for the

Eastern District of Michigan.

552. Industry Venture’s lender has informed it that its Second Draw PPP

application has been placed on an internal hold by the SBA.
553. Industry Venture is, through its legal counsel, aware that other similar

businesses have received correspondence from the SBA in regard to Second Draw

PPP loan applications wherein the SBA has stated: “Strip clubs remain ineligible for
PPP loans. See 13 CFR § 120.110(p).”

111

Case 2:21-cv-00447-LA Filed 04/07/21 Page 111 of 200 Document 1
554. Industry Venture is also, through its legal counsel, aware that,

irrespective of the above, other similar “strip clubs” have nevertheless received
Second Draw PPP loans.

555. Industry Venture reasonably believes, based on the information that it

has received, the information disclosed and presented in the previous proceedings

that resulted in the Regulation and SOP being enjoined and/or barred from
enforcement (much of which is detailed verbatim below), and the actions already

taken by the SBA with regard to its Second Draw PPP loan application and the

applications of other similar businesses as described both above and below (including

the applications of the other Plaintiffs here), that its Second Draw PPP application
will be rejected or fatally delayed by the SBA due to the Regulation, the SOP, the

Incorporating Statute, and/or the SBA’s application of the same.

556. In the event that Industry Venture is unable to obtain a Second Draw
PPP, it may lack the staff, funds, and necessary PPE and facility upgrades to be able

to reopen given the local Pandemic-related capacity restrictions, which may well

result in the permanent ruination of its business; its inability to engage in protected

First Amendment activities; and the inability of its staff, entertainers, and customers
to continue to engage in, associate for the purposes of engaging in, and/or view,

protected First Amendment activities.

Farmdale Hospitality Services, Inc. (“Farmdale”)

557. Farmdale is a non-alcohol serving commercial establishment open to the
consenting adult public which has presented, presents, and desires to continue to

present in the future, live female performance dance entertainment which is, at

times, fully-clothed, topless, and/or fully nude. All of the entertainment presented at
Farmdale is expression presumptively protected under the First Amendment to the

United States Constitution and appeals to normal, healthy, sexual desires.

112

Case 2:21-cv-00447-LA Filed 04/07/21 Page 112 of 200 Document 1
558. Farmdale has never been charged, let alone convicted, of any crimes of

obscenity. Similarly, none of the entertainers who have performed on Farmdale’s
premises have ever been charged, let alone convicted, of any crimes of obscenity

related to their performances at Farmdale.

559. Farmdale is categorized as a NAICS code 72 entity.

560. Farmdale presents lawful, constitutionally protected entertainment in
conformity with its various licenses, permits, and/or government approvals, including

but not limited to a Los Angeles Café Entertainment Permit and Restaurant License

by the County of Los Angeles.

561. Farmdale is, as of the filing of this action, currently closed for business.
As was required by local and/or state Public Health Orders, Farmdale closed for

business on March 16, 2020. Pursuant to the evolving local and/or state Public Health

Orders, Farmdale has not reopened. As a direct and proximate result of such
municipal pandemic-related closures and limitations, Farmdale has suffered

significant business and financial losses.

562. In order to mitigate its business losses, to provide monetary relief to its

employees (since a controlling percentage of Second Draw PPP loans must be used
for employee wages and salaries), and to be able to purchase PPE and make

Pandemic-related repairs and/or upgrades to its facility (since the Second Draw PPP

expanded the loan’s eligible uses), Farmdale applied for a Second Draw PPP.

563. Farmdale has submitted an application for a Second Draw PPP through
its lender, which is an approved SBA lender.

564. Pursuant to 15 U.S.C. § 636(a)(36)(F)(ii)(I), 15 U.S.C. § 636(a)(37)(K),

and/or 15 U.S.C. § 636(a)(F)(iii), Farmdale’s lender has operated and will operate as
a delegate of the SBA in the processing and approval or disapproval of the Second

Draw PPP sought by Farmdale.

113

Case 2:21-cv-00447-LA Filed 04/07/21 Page 113 of 200 Document 1
565. Farmdale is fully qualified—but for the Regulation, the SOP, the

Incorporating Statute, and/or the SBA’s application of all of the same—to receive a
Second Draw PPP loan under all other relevant statutes, regulations, and procedures.

566. Farmdale received a First Draw PPP loan under the CARES Act

pursuant to an injunction and ruling by the United States District Court for the

Eastern District of Michigan.
567. Farmdale’s lender has informed it that its Second Draw PPP application

has been placed on an internal hold by the SBA.

568. Farmdale is, through its legal counsel, aware that other similar

businesses have received correspondence from the SBA in regard to Second Draw
PPP loan applications wherein the SBA has stated: “Strip clubs remain ineligible for

PPP loans. See 13 CFR § 120.110(p).”

569. Farmdale is also, through its legal counsel, aware that, irrespective of
the above, other similar “strip clubs” have nevertheless received Second Draw PPP

loans.

570. Farmdale reasonably believes, based on the information that it has

received, the information disclosed and presented in the previous proceedings that
resulted in the Regulation and SOP being enjoined and/or barred from enforcement

(much of which is detailed verbatim below), and the actions already taken by the SBA

with regard to its Second Draw PPP loan application and the applications of other

similar businesses as described both above and below (including the applications of
the other Plaintiffs here), that its Second Draw PPP application will be rejected or

fatally delayed by the SBA due to the Regulation, the SOP, the Incorporating Statute,

and/or the SBA’s application of the same.
571. In the event that Farmdale is unable to obtain a Second Draw PPP, it

may lack the staff, funds, and necessary PPE and facility upgrades to be able to

reopen given the local Pandemic-related capacity restrictions, which may well result
114

Case 2:21-cv-00447-LA Filed 04/07/21 Page 114 of 200 Document 1
in the permanent ruination of its business; its inability to engage in protected First

Amendment activities; and the inability of its staff, entertainers, and customers to
continue to engage in, associate for the purposes of engaging in, and/or view,

protected First Amendment activities.

High Expectations Hospitality, LLC (“Expectations”)

572. Expectations is an alcohol-serving commercial establishment open to
the consenting adult public which has presented, presents, and desires to continue to

present in the future, live female performance dance entertainment which is, at

times, fully-clothed or topless. All of the entertainment presented at Expectations is

expression presumptively protected under the First Amendment to the United States
Constitution and appeals to normal, healthy, sexual desires.

573. Expectations has never been charged, let alone convicted, of any crimes

of obscenity. Similarly, none of the entertainers who have performed on
Expectations’s premises have ever been charged, let alone convicted, of any crimes of

obscenity related to their performances at Expectations.

574. Expectations is categorized as a NAICS code 72 entity.

575. Expectations presents lawful, constitutionally protected entertainment
in conformity with its various licenses, permits, and/or government approvals,

including but not limited to Liquor Licenses issued by the City and County of Dallas

and the State of Texas, Restaurant License issued by the City of Dallas and Sexually

Oriented Business License issued by the City of Dallas.
576. Expectations is, as of the filing of this action, currently open for

business. As was required by local and/or state Public Health Orders, Expectations

closed for business on March 17, 2020. Pursuant to the evolving local and/or state
Public Health Orders, Expectations reopened on May 22, 2020, but on June 25, 2020

closed again, and reopened again on October 1, 2020. As a direct and proximate result

115

Case 2:21-cv-00447-LA Filed 04/07/21 Page 115 of 200 Document 1
of such municipal pandemic-related closures and limitations, Expectations has

suffered significant business and financial losses.
577. In order to mitigate its business losses, to provide monetary relief to its

employees (since a controlling percentage of Second Draw PPP loans must be used

for employee wages and salaries), and to be able to purchase PPE and make

Pandemic-related repairs and/or upgrades to its facility (since the Second Draw PPP
expanded the loan’s eligible uses), Expectations applied for a Second Draw PPP.

578. Expectations has submitted an application for a Second Draw PPP

through its lender, which is an approved SBA lender.

579. Pursuant to 15 U.S.C. § 636(a)(36)(F)(ii)(I), 15 U.S.C. § 636(a)(37)(K),
and/or 15 U.S.C. § 636(a)(F)(iii), Expectations’s lender has operated and will operate

as a delegate of the SBA in the processing and approval or disapproval of the Second

Draw PPP sought by Expectations.
580. Expectations is fully qualified—but for the Regulation, the SOP, the

Incorporating Statute, and/or the SBA’s application of all of the same—to receive a

Second Draw PPP loan under all other relevant statutes, regulations, and procedures.

581. Expectations received a First Draw PPP loan under the CARES Act
pursuant to an injunction and ruling by the United States District Court for the

Eastern District of Michigan.

582. Expectations’s lender has informed it that its Second Draw PPP

application has been placed on an internal hold by the SBA.
583. Expectations is, through its legal counsel, aware that other similar

businesses have received correspondence from the SBA in regard to Second Draw

PPP loan applications wherein the SBA has stated: “Strip clubs remain ineligible for
PPP loans. See 13 CFR § 120.110(p).”

116

Case 2:21-cv-00447-LA Filed 04/07/21 Page 116 of 200 Document 1
584. Expectations is also, through its legal counsel, aware that, irrespective

of the above, other similar “strip clubs” have nevertheless received Second Draw PPP
loans.

585. Expectations reasonably believes, based on the information that it has

received, the information disclosed and presented in the previous proceedings that

resulted in the Regulation and SOP being enjoined and/or barred from enforcement
(much of which is detailed verbatim below), and the actions already taken by the SBA

with regard to its Second Draw PPP loan application and the applications of other

similar businesses as described both above and below (including the applications of

the other Plaintiffs here), that its Second Draw PPP application will be rejected or
fatally delayed by the SBA due to the Regulation, the SOP, the Incorporating Statute,

and/or the SBA’s application of the same.

586. In the event that Expectations is unable to obtain a Second Draw PPP,
it may lack the staff, funds, and necessary PPE and facility upgrades to be able to

continue to operate given the local Pandemic-related capacity restrictions, which may

well result in the permanent ruination of its business; its inability to engage in

protected First Amendment activities; and the inability of its staff, entertainers, and
customers to continue to engage in, associate for the purposes of engaging in, and/or

view, protected First Amendment activities.

Inland Restaurant Venture, Inc. (“Inland”)

587. Inland is a non-alcohol serving commercial establishment open to the
consenting adult public which has presented, presents, and desires to continue to

present in the future, live female performance dance entertainment which is, at

times, fully-clothed or topless. All of the entertainment presented at Inland is
expression presumptively protected under the First Amendment to the United States

Constitution and appeals to normal, healthy, sexual desires.

117

Case 2:21-cv-00447-LA Filed 04/07/21 Page 117 of 200 Document 1
588. Inland has never been charged, let alone convicted, of any crimes of

obscenity. Similarly, none of the entertainers who have performed on Inland’s
premises have ever been charged, let alone convicted, of any crimes of obscenity

related to their performances at Inland.

589. Inland is categorized as a NAICS code 72 entity.

590. Inland presents lawful, constitutionally protected entertainment in
conformity with its various licenses, permits, and/or government approvals, including

but not limited to a Los Angeles Café Entertainment Permit and Restaurant License

issued by the County of Los Angeles.

591. Inland is, as of the filing of this action, currently closed for business. As
was required by local and/or state Public Health Orders, Inland closed for business

on March 16, 2020. Pursuant to the evolving local and/or state Public Health Orders,

Inland has not reopened. As a direct and proximate result of such municipal
pandemic-related closures and limitations, Inland has suffered significant business

and financial losses.

592. In order to mitigate its business losses, to provide monetary relief to its

employees (since a controlling percentage of Second Draw PPP loans must be used
for employee wages and salaries), and to be able to purchase PPE and make

Pandemic-related repairs and/or upgrades to its facility (since the Second Draw PPP

expanded the loan’s eligible uses), Inland applied for a Second Draw PPP.

593. Inland has submitted an application for a Second Draw PPP through its
lender, which is an approved SBA lender.

594. Pursuant to 15 U.S.C. § 636(a)(36)(F)(ii)(I), 15 U.S.C. § 636(a)(37)(K),

and/or 15 U.S.C. § 636(a)(F)(iii), Inland’s lender has operated and will operate as a
delegate of the SBA in the processing and approval or disapproval of the Second Draw

PPP sought by Inland.

118

Case 2:21-cv-00447-LA Filed 04/07/21 Page 118 of 200 Document 1
595. Inland is fully qualified—but for the Regulation, the SOP, the

Incorporating Statute, and/or the SBA’s application of all of the same—to receive a
Second Draw PPP loan under all other relevant statutes, regulations, and procedures.

596. Inland received a First Draw PPP loan under the CARES Act pursuant

to an injunction and ruling by the United States District Court for the Eastern

District of Michigan.
597. Inland’s lender has informed it that its Second Draw PPP application

has been placed on an internal hold by the SBA.

598. Inland is, through its legal counsel, aware that other similar businesses

have received correspondence from the SBA in regard to Second Draw PPP loan
applications wherein the SBA has stated: “Strip clubs remain ineligible for PPP loans.

See 13 CFR § 120.110(p).”

599. Inland is also, through its legal counsel, aware that, irrespective of the
above, other similar “strip clubs” have nevertheless received Second Draw PPP loans.

600. Inland reasonably believes, based on the information that it has

received, the information disclosed and presented in the previous proceedings that

resulted in the Regulation and SOP being enjoined and/or barred from enforcement
(much of which is detailed verbatim below), and the actions already taken by the SBA

with regard to its Second Draw PPP loan application and the applications of other

similar businesses as described both above and below (including the applications of

the other Plaintiffs here), that its Second Draw PPP application will be rejected or
fatally delayed by the SBA due to the Regulation, the SOP, the Incorporating Statute,

and/or the SBA’s application of the same.

601. In the event that Inland is unable to obtain a Second Draw PPP, it may
lack the staff, funds, and necessary PPE and facility upgrades to be able to reopen

given the local Pandemic-related capacity restrictions, which may well result in the

permanent ruination of its business; its inability to engage in protected First
119

Case 2:21-cv-00447-LA Filed 04/07/21 Page 119 of 200 Document 1
Amendment activities; and the inability of its staff, entertainers, and customers to

continue to engage in, associate for the purposes of engaging in, and/or view,
protected First Amendment activities.

Kentucky Hospitality Restaurant Venture, LLC (“Kentucky Hospitality”)

602. Kentucky Hospitality is an alcohol-serving commercial establishment

open to the consenting adult public which has presented, presents, and desires to
continue to present in the future, live female performance dance entertainment which

is, at times, fully-clothed, topless and/or fully nude. All of the entertainment

presented at Kentucky Hospitality is expression presumptively protected under the

First Amendment to the United States Constitution and appeals to normal, healthy,
sexual desires.

603. Kentucky Hospitality has never been charged, let alone convicted, of any

crimes of obscenity. Similarly, none of the entertainers who have performed on
Kentucky Hospitality’s premises have ever been charged, let alone convicted, of any

crimes of obscenity related to their performances at Kentucky Hospitality.

604. Kentucky Hospitality is categorized as a NAICS code 72 entity.

605. Kentucky Hospitality presents lawful, constitutionally protected
entertainment in conformity with its various licenses, permits, and/or government

approvals, including but not limited to: an Alcohol License from the State of Kentucky

and Lexington-Fayette County an Adult Entertainment License from Lexington-

Fayette County and Restaurant License issued by the State of Kentucky.
606. Kentucky Hospitality is, as of the filing of this action, currently open for

business. As was required by local and/or state Public Health Orders, Kentucky

Hospitality closed for business on March 16, 2020. Pursuant to the evolving local
and/or state Public Health Orders, Kentucky Hospitality reopened on June 2, 2020,

but on July 31, 2020 closed again. Kentucky Hospitality reopened again on August

21, 2020. As a direct and proximate result of such municipal pandemic-related
120

Case 2:21-cv-00447-LA Filed 04/07/21 Page 120 of 200 Document 1
closures and limitations, Kentucky Hospitality has suffered significant business and

financial losses.
607. In order to mitigate its business losses, to provide monetary relief to its

employees (since a controlling percentage of Second Draw PPP loans must be used

for employee wages and salaries), and to be able to purchase PPE and make

Pandemic-related repairs and/or upgrades to its facility (since the Second Draw PPP
expanded the loan’s eligible uses), Kentucky Hospitality applied for a Second Draw

PPP.

608. Kentucky Hospitality has submitted an application for a Second Draw

PPP through its lender, which is an approved SBA lender.
609. Pursuant to 15 U.S.C. § 636(a)(36)(F)(ii)(I), 15 U.S.C. § 636(a)(37)(K),

and/or 15 U.S.C. § 636(a)(F)(iii), Kentucky Hospitality’s lender has operated and will

operate as a delegate of the SBA in the processing and approval or disapproval of the
Second Draw PPP sought by Kentucky Hospitality.

610. Kentucky Hospitality is fully qualified—but for the Regulation, the

SOP, the Incorporating Statute, and/or the SBA’s application of all of the same—to

receive a Second Draw PPP loan under all other relevant statutes, regulations, and
procedures.

611. Kentucky Hospitality received a First Draw PPP loan under the CARES

Act pursuant to an injunction and ruling by the United States District Court for the

Eastern District of Michigan.
612. Kentucky Hospitality’s lender has informed it that its Second Draw PPP

application has been placed on an internal hold by the SBA.

613. Kentucky Hospitality is, through its legal counsel, aware that other
similar businesses have received correspondence from the SBA in regard to Second

Draw PPP loan applications wherein the SBA has stated: “Strip clubs remain

ineligible for PPP loans. See 13 CFR § 120.110(p).”
121

Case 2:21-cv-00447-LA Filed 04/07/21 Page 121 of 200 Document 1
614. Kentucky Hospitality is also, through its legal counsel, aware that,

irrespective of the above, other similar “strip clubs” have nevertheless received
Second Draw PPP loans.

615. Kentucky Hospitality reasonably believes, based on the information that

it has received, the information disclosed and presented in the previous proceedings

that resulted in the Regulation and SOP being enjoined and/or barred from
enforcement (much of which is detailed verbatim below), and the actions already

taken by the SBA with regard to its Second Draw PPP loan application and the

applications of other similar businesses as described both above and below (including

the applications of the other Plaintiffs here), that its Second Draw PPP application
will be rejected or fatally delayed by the SBA due to the Regulation, the SOP, the

Incorporating Statute, and/or the SBA’s application of the same.

616. In the event that Kentucky Hospitality is unable to obtain a Second
Draw PPP, it may lack the staff, funds, and necessary PPE and facility upgrades to

be able to continue to operate given the local Pandemic-related capacity restrictions,

which may well result in the permanent ruination of its business; its inability to

engage in protected First Amendment activities; and the inability of its staff,
entertainers, and customers to continue to engage in, associate for the purposes of

engaging in, and/or view, protected First Amendment activities.

L.C.M., LLC (“LCM”)

617. LCM is an alcohol serving commercial establishment open to the
consenting adult public which has presented, presents, and desires to continue to

present in the future, fully-clothed (in the form of pasties) live female performance

dance entertainment which is. All of the entertainment presented at LCM is
expression presumptively protected under the First Amendment to the United States

Constitution and appeals to normal, healthy, sexual desires.

122

Case 2:21-cv-00447-LA Filed 04/07/21 Page 122 of 200 Document 1
618. LCM has never been charged, let alone convicted, of any crimes of

obscenity. Similarly, none of the entertainers who have performed on LCM’s premises
have ever been charged, let alone convicted, of any crimes of obscenity related to their

performances at LCM.

619. LCM is categorized as a NAICS code 72 entity.

620. LCM presents lawful, constitutionally protected entertainment in
conformity with its various licenses, permits, and/or government approvals, including

but not limited to Liquor Licenses issued by the City, County and State of Boise and

a Restaurant License issued by the County and City of Boise.

621. LCM is, as of the filing of this action, currently open for business. As
was required by local and/or state Public Health Orders, LCM closed for business on

March 19, 2020. Pursuant to the evolving local and/or state Public Health Orders,

LCM reopened on June 18, 2020, but on June 22, 2020 closed again, and reopened
again on July 23, 2020. As a direct and proximate result of such municipal pandemic-

related closures and limitations, LCM has suffered significant business and financial

losses.

622. In order to mitigate its business losses, to provide monetary relief to its
employees (since a controlling percentage of Second Draw PPP loans must be used

for employee wages and salaries), and to be able to purchase PPE and make

Pandemic-related repairs and/or upgrades to its facility (since the Second Draw PPP

expanded the loan’s eligible uses), LCM applied for a Second Draw PPP.
623. LCM has submitted an application for a Second Draw PPP through its

lender, which is an approved SBA lender.

624. Pursuant to 15 U.S.C. § 636(a)(36)(F)(ii)(I), 15 U.S.C. § 636(a)(37)(K),
and/or 15 U.S.C. § 636(a)(F)(iii), LCM’s lender has operated and will operate as a

delegate of the SBA in the processing and approval or disapproval of the Second Draw

PPP sought by LCM.
123

Case 2:21-cv-00447-LA Filed 04/07/21 Page 123 of 200 Document 1
625. LCM is fully qualified—but for the Regulation, the SOP, the

Incorporating Statute, and/or the SBA’s application of all of the same—to receive a
Second Draw PPP loan under all other relevant statutes, regulations, and procedures.

626. LCM received a First Draw PPP loan under the CARES Act pursuant to

an injunction and ruling by the United States District Court for the Eastern District

of Michigan.
627. LCM’s lender has informed it that its Second Draw PPP application has

been placed on an internal hold by the SBA.

628. LCM is, through its legal counsel, aware that other similar businesses

have received correspondence from the SBA in regard to Second Draw PPP loan
applications wherein the SBA has stated: “Strip clubs remain ineligible for PPP loans.

See 13 CFR § 120.110(p).”

629. LCM is also, through its legal counsel, aware that, irrespective of the
above, other similar “strip clubs” have nevertheless received Second Draw PPP loans.

630. LCM reasonably believes, based on the information that it has received,

the information disclosed and presented in the previous proceedings that resulted in

the Regulation and SOP being enjoined and/or barred from enforcement (much of
which is detailed verbatim below), and the actions already taken by the SBA with

regard to its Second Draw PPP loan application and the applications of other similar

businesses as described both above and below (including the applications of the other

Plaintiffs here), that its Second Draw PPP application will be rejected or fatally
delayed by the SBA due to the Regulation, the SOP, the Incorporating Statute, and/or

the SBA’s application of the same.

631. In the event that LCM is unable to obtain a Second Draw PPP, it may
lack the staff, funds, and necessary PPE and facility upgrades to be able to continue

to operate given the local Pandemic-related capacity restrictions, which may well

result in the permanent ruination of its business; its inability to engage in protected
124

Case 2:21-cv-00447-LA Filed 04/07/21 Page 124 of 200 Document 1
First Amendment activities; and the inability of its staff, entertainers, and customers

to continue to engage in, associate for the purposes of engaging in, and/or view,
protected First Amendment activities.

Midnight Sun Enterprises, Inc. (“Midnight”)

632. Midnight is an alcohol-serving commercial establishment open to the

consenting adult public which has presented, presents, and desires to continue to
present in the future, live female performance dance entertainment which is, at

times, fully-clothed or topless. All of the entertainment presented at Midnight is

expression presumptively protected under the First Amendment to the United States

Constitution and appeals to normal, healthy, sexual desires.
633. Midnight has never been charged, let alone convicted, of any crimes of

obscenity. Similarly, none of the entertainers who have performed on Midnight’s

premises have ever been charged, let alone convicted, of any crimes of obscenity
related to their performances at Midnight.

634. Midnight is categorized as a NAICS code 72 entity.

635. Midnight presents lawful, constitutionally protected entertainment in

conformity with its various licenses, permits, and/or government approvals, including
but not limited to: an Alcohol License from the State of California and a Restaurant

License issued by the County of Los Angeles, a Public Eating License issued by the

County of Los Angeles and an Adult Cabaret License issued by the County of Los

Angeles.
636. Midnight is, as of the filing of this action, currently closed for business.

As was required by local and/or state Public Health Orders, Midnight closed for

business on March 16, 2020. Pursuant to the evolving local and/or state Public Health
Orders, Midnight has not reopened. As a direct and proximate result of such

municipal pandemic-related closures and limitations, Midnight has suffered

significant business and financial losses.
125

Case 2:21-cv-00447-LA Filed 04/07/21 Page 125 of 200 Document 1
637. In order to mitigate its business losses, to provide monetary relief to its

employees (since a controlling percentage of Second Draw PPP loans must be used
for employee wages and salaries), and to be able to purchase PPE and make

Pandemic-related repairs and/or upgrades to its facility (since the Second Draw PPP

expanded the loan’s eligible uses), Midnight applied for a Second Draw PPP.

638. Midnight has submitted an application for a Second Draw PPP through
its lender, which is an approved SBA lender.

639. Pursuant to 15 U.S.C. § 636(a)(36)(F)(ii)(I), 15 U.S.C. § 636(a)(37)(K),

and/or 15 U.S.C. § 636(a)(F)(iii), Midnight’s lender has operated and will operate as

a delegate of the SBA in the processing and approval or disapproval of the Second
Draw PPP sought by Midnight.

640. Midnight is fully qualified—but for the Regulation, the SOP, the

Incorporating Statute, and/or the SBA’s application of all of the same—to receive a
Second Draw PPP loan under all other relevant statutes, regulations, and procedures.

641. Midnight received a First Draw PPP loan under the CARES Act

pursuant to an injunction and ruling by the United States District Court for the

Eastern District of Michigan.
642. Midnight’s lender has informed it that its Second Draw PPP application

has been placed on an internal hold by the SBA.

643. Midnight is, through its legal counsel, aware that other similar

businesses have received correspondence from the SBA in regard to Second Draw
PPP loan applications wherein the SBA has stated: “Strip clubs remain ineligible for

PPP loans. See 13 CFR § 120.110(p).”

644. Midnight is also, through its legal counsel, aware that, irrespective of
the above, other similar “strip clubs” have nevertheless received Second Draw PPP

loans.

126

Case 2:21-cv-00447-LA Filed 04/07/21 Page 126 of 200 Document 1
645. Midnight reasonably believes, based on the information that it has

received, the information disclosed and presented in the previous proceedings that
resulted in the Regulation and SOP being enjoined and/or barred from enforcement

(much of which is detailed verbatim below), and the actions already taken by the SBA

with regard to its Second Draw PPP loan application and the applications of other

similar businesses as described both above and below (including the applications of
the other Plaintiffs here), that its Second Draw PPP application will be rejected or

fatally delayed by the SBA due to the Regulation, the SOP, the Incorporating Statute,

and/or the SBA’s application of the same.

646. In the event that Midnight is unable to obtain a Second Draw PPP, it
may lack the staff, funds, and necessary PPE and facility upgrades to be able to

reopen given the local Pandemic-related capacity restrictions, which may well result

in the permanent ruination of its business; its inability to engage in protected First
Amendment activities; and the inability of its staff, entertainers, and customers to

continue to engage in, associate for the purposes of engaging in, and/or view,

protected First Amendment activities.

Nitelife, Inc. (“Nitelife”)
647. Nitelife is an alcohol-serving commercial establishment open to the

consenting adult public which has presented, presents, and desires to continue to

present in the future, live female performance dance entertainment which is, at

times, fully-clothed or topless. All of the entertainment presented at Nitelife is
expression presumptively protected under the First Amendment to the United States

Constitution and appeals to normal, healthy, sexual desires.

648. Nitelife has never been charged, let alone convicted, of any crimes of
obscenity. Similarly, none of the entertainers who have performed on Nitelife’s

premises have ever been charged, let alone convicted, of any crimes of obscenity

related to their performances at Nitelife.
127

Case 2:21-cv-00447-LA Filed 04/07/21 Page 127 of 200 Document 1
649. Nitelife is categorized as a NAICS code 72 entity.

650. Nitelife presents lawful, constitutionally protected entertainment in
conformity with its various licenses, permits, and/or government approvals, including

but not limited to: a Liquor Permit issued by the City of Minneapolis and State of

Minnesota, a Restaurant License issued by the City of Minneapolis and Adult

Entertainment License from the City of Minneapolis.
651. Nitelife is, as of the filing of this action, currently open for business. As

was required by local and/or state Public Health Orders, Nitelife closed for business

on March 17, 2020. Pursuant to the evolving local and/or state Public Health Orders,

Nitelife reopened on June 10, 2020, closed again on November 12, 2020, and recently
reopened again on March 3, 2021. As a direct and proximate result of such municipal

pandemic-related closures and limitations, Nitelife has suffered significant business

and financial losses.
652. In order to mitigate its business losses, to provide monetary relief to its

employees (since a controlling percentage of Second Draw PPP loans must be used

for employee wages and salaries), and to be able to purchase PPE and make

Pandemic-related repairs and/or upgrades to its facility (since the Second Draw PPP
expanded the loan’s eligible uses), Nitelife applied for a Second Draw PPP.

653. Nitelife has submitted an application for a Second Draw PPP through

its lender, which is an approved SBA lender.

654. Pursuant to 15 U.S.C. § 636(a)(36)(F)(ii)(I), 15 U.S.C. § 636(a)(37)(K),
and/or 15 U.S.C. § 636(a)(F)(iii), Nitelife’s lender has operated and will operate as a

delegate of the SBA in the processing and approval or disapproval of the Second Draw

PPP sought by Nitelife.
655. Nitelife is fully qualified—but for the Regulation, the SOP, the

Incorporating Statute, and/or the SBA’s application of all of the same—to receive a

Second Draw PPP loan under all other relevant statutes, regulations, and procedures.
128

Case 2:21-cv-00447-LA Filed 04/07/21 Page 128 of 200 Document 1
656. Nitelife received a First Draw PPP loan under the CARES Act pursuant

to an injunction and ruling by the United States District Court for the Eastern
District of Michigan.

657. Nitelife’s lender has informed it that its Second Draw PPP application

has been placed on an internal hold by the SBA.

658. Nitelife is, through its legal counsel, aware that other similar businesses
have received correspondence from the SBA in regard to Second Draw PPP loan

applications wherein the SBA has stated: “Strip clubs remain ineligible for PPP loans.

See 13 CFR § 120.110(p).”

659. Nitelife is also, through its legal counsel, aware that, irrespective of the
above, other similar “strip clubs” have nevertheless received Second Draw PPP loans.

660. Nitelife reasonably believes, based on the information that it has

received, the information disclosed and presented in the previous proceedings that
resulted in the Regulation and SOP being enjoined and/or barred from enforcement

(much of which is detailed verbatim below), and the actions already taken by the SBA

with regard to its Second Draw PPP loan application and the applications of other

similar businesses as described both above and below (including the applications of
the other Plaintiffs here), that its Second Draw PPP application will be rejected or

fatally delayed by the SBA due to the Regulation, the SOP, the Incorporating Statute,

and/or the SBA’s application of the same.

661. In the event that Nitelife is unable to obtain a Second Draw PPP, it may
lack the staff, funds, and necessary PPE and facility upgrades to be able to continue

to operate given the local Pandemic-related capacity restrictions, which may well

result in the permanent ruination of its business; its inability to engage in protected
First Amendment activities; and the inability of its staff, entertainers, and customers

to continue to engage in, associate for the purposes of engaging in, and/or view,

protected First Amendment activities.
129

Case 2:21-cv-00447-LA Filed 04/07/21 Page 129 of 200 Document 1
Olympic Avenue Venture, Inc. (“Olympic”)

662. Olympic is a non-alcohol serving commercial establishment open to the
consenting adult public which has presented, presents, and desires to continue to

present in the future, live female performance dance entertainment which is, at

times, fully-clothed, topless, and/or fully nude. All of the entertainment presented at

Olympic is expression presumptively protected under the First Amendment to the
United States Constitution and appeals to normal, healthy, sexual desires.

663. Olympic has never been charged, let alone convicted, of any crimes of

obscenity. Similarly, none of the entertainers who have performed on Olympic’s

premises have ever been charged, let alone convicted, of any crimes of obscenity
related to their performances at Olympic.

664. Olympic is categorized as a NAICS code 72 entity.

665. Olympic presents lawful, constitutionally protected entertainment in
conformity with its various licenses, permits, and/or government approvals, including

but not limited to a Restaurant License issued by the County of Los Angeles and Café

Entertainment License issued by the City of Los Angeles.

666. Olympic is, as of the filing of this action, currently closed for business.
As was required by local and/or state Public Health Orders, Olympic closed for

business on March 16, 2020. Pursuant to the evolving local and/or state Public Health

Orders, Olympic has not reopened. As a direct and proximate result of such municipal

pandemic-related closures and limitations, Olympic has suffered significant business
and financial losses.

667. In order to mitigate its business losses, to provide monetary relief to its

employees (since a controlling percentage of Second Draw PPP loans must be used
for employee wages and salaries), and to be able to purchase PPE and make

Pandemic-related repairs and/or upgrades to its facility (since the Second Draw PPP

expanded the loan’s eligible uses), Olympic applied for a Second Draw PPP.
130

Case 2:21-cv-00447-LA Filed 04/07/21 Page 130 of 200 Document 1
668. Olympic has submitted an application for a Second Draw PPP through

its lender, which is an approved SBA lender.
669. Pursuant to 15 U.S.C. § 636(a)(36)(F)(ii)(I), 15 U.S.C. § 636(a)(37)(K),

and/or 15 U.S.C. § 636(a)(F)(iii), Olympic’s lender has operated and will operate as a

delegate of the SBA in the processing and approval or disapproval of the Second Draw

PPP sought by Olympic.
670. Olympic is fully qualified—but for the Regulation, the SOP, the

Incorporating Statute, and/or the SBA’s application of all of the same—to receive a

Second Draw PPP loan under all other relevant statutes, regulations, and procedures.

671. Olympic received a First Draw PPP loan under the CARES Act pursuant
to an injunction and ruling by the United States District Court for the Eastern

District of Michigan.

672. Olympic’s lender has informed it that its Second Draw PPP application
has been placed on an internal hold by the SBA.

673. Olympic is, through its legal counsel, aware that other similar

businesses have received correspondence from the SBA in regard to Second Draw

PPP loan applications wherein the SBA has stated: “Strip clubs remain ineligible for
PPP loans. See 13 CFR § 120.110(p).”

674. Olympic is also, through its legal counsel, aware that, irrespective of the

above, other similar “strip clubs” have nevertheless received Second Draw PPP loans.

675. Olympic reasonably believes, based on the information that it has
received, the information disclosed and presented in the previous proceedings that

resulted in the Regulation and SOP being enjoined and/or barred from enforcement

(much of which is detailed verbatim below), and the actions already taken by the SBA
with regard to its Second Draw PPP loan application and the applications of other

similar businesses as described both above and below (including the applications of

the other Plaintiffs here), that its Second Draw PPP application will be rejected or
131

Case 2:21-cv-00447-LA Filed 04/07/21 Page 131 of 200 Document 1
fatally delayed by the SBA due to the Regulation, the SOP, the Incorporating Statute,

and/or the SBA’s application of the same.
676. In the event that Olympic is unable to obtain a Second Draw PPP, it

may lack the staff, funds, and necessary PPE and facility upgrades to be able to

reopen given the local Pandemic-related capacity restrictions, which may well result

in the permanent ruination of its business; its inability to engage in protected First
Amendment activities; and the inability of its staff, entertainers, and customers to

continue to engage in, associate for the purposes of engaging in, and/or view,

protected First Amendment activities.

The Oxnard Hospitality Services, Inc. (“Oxnard”)
677. Oxnard is a non-alcohol-serving commercial establishment open to the

consenting adult public which has presented, presents, and desires to continue to

present in the future, live female performance dance entertainment which is, at
times, fully-clothed, topless, and/or fully nude. All of the entertainment presented at

Oxnard is expression presumptively protected under the First Amendment to the

United States Constitution and appeals to normal, healthy, sexual desires.

678. Oxnard has never been charged, let alone convicted, of any crimes of
obscenity. Similarly, none of the entertainers who have performed on Oxnard’s

premises have ever been charged, let alone convicted, of any crimes of obscenity

related to their performances at Oxnard.

679. Oxnard is categorized as a NAICS code 72 entity.
680. Oxnard presents lawful, constitutionally protected entertainment in

conformity with its various licenses, permits, and/or government approvals, including

but not limited to a Restaurant License issued by the County of Oxnard and Adult
Business License issued by the City of Oxnard.

681. Oxnard is, as of the filing of this action, currently closed for business. As

was required by local and/or state Public Health Orders, Oxnard closed for business
132

Case 2:21-cv-00447-LA Filed 04/07/21 Page 132 of 200 Document 1
on March 16, 2020. Pursuant to the evolving local and/or state Public Health Orders,

Oxnard has not reopened. As a direct and proximate result of such municipal
pandemic-related closures and limitations, Oxnard has suffered significant business

and financial losses.

682. In order to mitigate its business losses, to provide monetary relief to its

employees (since a controlling percentage of Second Draw PPP loans must be used
for employee wages and salaries), and to be able to purchase PPE and make

Pandemic-related repairs and/or upgrades to its facility (since the Second Draw PPP

expanded the loan’s eligible uses), Oxnard applied for a Second Draw PPP.

683. Oxnard has submitted an application for a Second Draw PPP through
its lender, which is an approved SBA lender.

684. Pursuant to 15 U.S.C. § 636(a)(36)(F)(ii)(I), 15 U.S.C. § 636(a)(37)(K),

and/or 15 U.S.C. § 636(a)(F)(iii), Oxnard’s lender has operated and will operate as a
delegate of the SBA in the processing and approval or disapproval of the Second Draw

PPP sought by Oxnard.

685. Oxnard is fully qualified—but for the Regulation, the SOP, the

Incorporating Statute, and/or the SBA’s application of all of the same—to receive a
Second Draw PPP loan under all other relevant statutes, regulations, and procedures.

686. Oxnard received a First Draw PPP loan under the CARES Act pursuant

to an injunction and ruling by the United States District Court for the Eastern

District of Michigan.
687. Oxnard’s lender has informed it that its Second Draw PPP application

has been placed on an internal hold by the SBA.

688. Oxnard is, through its legal counsel, aware that other similar businesses
have received correspondence from the SBA in regard to Second Draw PPP loan

applications wherein the SBA has stated: “Strip clubs remain ineligible for PPP loans.

See 13 CFR § 120.110(p).”
133

Case 2:21-cv-00447-LA Filed 04/07/21 Page 133 of 200 Document 1
689. Oxnard is also, through its legal counsel, aware that, irrespective of the

above, other similar “strip clubs” have nevertheless received Second Draw PPP loans.
690. Oxnard reasonably believes, based on the information that it has

received, the information disclosed and presented in the previous proceedings that

resulted in the Regulation and SOP being enjoined and/or barred from enforcement

(much of which is detailed verbatim below), and the actions already taken by the SBA
with regard to its Second Draw PPP loan application and the applications of other

similar businesses as described both above and below (including the applications of

the other Plaintiffs here), that its Second Draw PPP application will be rejected or

fatally delayed by the SBA due to the Regulation, the SOP, the Incorporating Statute,
and/or the SBA’s application of the same.

691. In the event that Oxnard is unable to obtain a Second Draw PPP, it may

lack the staff, funds, and necessary PPE and facility upgrades to be able to reopen
given the local Pandemic-related capacity restrictions, which may well result in the

permanent ruination of its business; its inability to engage in protected First

Amendment activities; and the inability of its staff, entertainers, and customers to

continue to engage in, associate for the purposes of engaging in, and/or view,
protected First Amendment activities.

Penn Ave Hospitality, LLC (“Penn Ave”)

692. Penn Ave is an alcohol-serving commercial establishment open to the

consenting adult public which has presented, presents, and desires to continue to
present in the future, live female performance dance entertainment which is, at

times, fully-clothed, topless, and/or fully nude. All of the entertainment presented at

Penn Ave is expression presumptively protected under the First Amendment to the
United States Constitution and appeals to normal, healthy, sexual desires.

693. Penn Ave has never been charged, let alone convicted, of any crimes of

obscenity. Similarly, none of the entertainers who have performed on Penn Ave’s
134

Case 2:21-cv-00447-LA Filed 04/07/21 Page 134 of 200 Document 1
premises have ever been charged, let alone convicted, of any crimes of obscenity

related to their performances at Penn Ave.
694. Penn Ave is categorized as a NAICS code 72 entity.

695. Penn Ave presents lawful, constitutionally protected entertainment in

conformity with its various licenses, permits, and/or government approvals, including

but not limited to: Alcohol and Liquor Licenses issued by the State of Pennsylvania
and Restaurant License issued by the County of Allegheny.

696. Penn Ave is, as of the filing of this action, currently closed for business.

As was required by local and/or state Public Health Orders, Penn Ave closed for

business on March 16, 2020. Pursuant to the evolving local and/or state Public Health
Orders, Penn Ave briefly reopened from June 5, 2020 to June 27, 2020 and again from

October 1, 2020 to December 25, 2020. Penn Ave has not been permitted to reopen

since December 25, 2020. As a direct and proximate result of such municipal
pandemic-related closures and limitations, Penn Ave has suffered significant

business and financial losses.

697. In order to mitigate its business losses, to provide monetary relief to its

employees (since a controlling percentage of Second Draw PPP loans must be used
for employee wages and salaries), and to be able to purchase PPE and make

Pandemic-related repairs and/or upgrades to its facility (since the Second Draw PPP

expanded the loan’s eligible uses), Penn Ave applied for a Second Draw PPP.

698. Penn Ave has submitted an application for a Second Draw PPP through
its lender, which is an approved SBA lender.

699. Pursuant to 15 U.S.C. § 636(a)(36)(F)(ii)(I), 15 U.S.C. § 636(a)(37)(K),

and/or 15 U.S.C. § 636(a)(F)(iii), Penn Ave’s lender has operated and will operate as
a delegate of the SBA in the processing and approval or disapproval of the Second

Draw PPP sought by Penn Ave.

135

Case 2:21-cv-00447-LA Filed 04/07/21 Page 135 of 200 Document 1
700. Penn Ave is fully qualified—but for the Regulation, the SOP, the

Incorporating Statute, and/or the SBA’s application of all of the same—to receive a
Second Draw PPP loan under all other relevant statutes, regulations, and procedures.

701. Penn Ave received a First Draw PPP loan under the CARES Act

pursuant to an injunction and ruling by the United States District Court for the

Eastern District of Michigan.
702. Penn Ave’s lender has informed it that its Second Draw PPP application

has been placed on an internal hold by the SBA.

703. Penn Ave is, through its legal counsel, aware that other similar

businesses have received correspondence from the SBA in regard to Second Draw
PPP loan applications wherein the SBA has stated: “Strip clubs remain ineligible for

PPP loans. See 13 CFR § 120.110(p).”

704. Penn Ave is also, through its legal counsel, aware that, irrespective of
the above, other similar “strip clubs” have nevertheless received Second Draw PPP

loans.

705. Penn Ave reasonably believes, based on the information that it has

received, the information disclosed and presented in the previous proceedings that
resulted in the Regulation and SOP being enjoined and/or barred from enforcement

(much of which is detailed verbatim below), and the actions already taken by the SBA

with regard to its Second Draw PPP loan application and the applications of other

similar businesses as described both above and below (including the applications of
the other Plaintiffs here), that its Second Draw PPP application will be rejected or

fatally delayed by the SBA due to the Regulation, the SOP, the Incorporating Statute,

and/or the SBA’s application of the same.
706. In the event that Penn Ave is unable to obtain a Second Draw PPP, it

may lack the staff, funds, and necessary PPE and facility upgrades to be able to

reopen given the local Pandemic-related capacity restrictions, which may well result
136

Case 2:21-cv-00447-LA Filed 04/07/21 Page 136 of 200 Document 1
in the permanent ruination of its business; its inability to engage in protected First

Amendment activities; and the inability of its staff, entertainers, and customers to
continue to engage in, associate for the purposes of engaging in, and/or view,

protected First Amendment activities.

Platinum SJ Enterprise (“SJ”)

707. SJ is an alcohol-serving commercial establishment open to the
consenting adult public which has presented, presents, and desires to continue to

present in the future, fully-clothed (in the form of pasties) live female performance

dance entertainment. All of the entertainment presented at SJ is expression

presumptively protected under the First Amendment to the United States
Constitution and appeals to normal, healthy, sexual desires.

708. SJ has never been charged, let alone convicted, of any crimes of

obscenity. Similarly, none of the entertainers who have performed on SJ’s premises
have ever been charged, let alone convicted, of any crimes of obscenity related to their

performances at SJ.

709. SJ is categorized as a NAICS code 72 entity.

710. SJ presents lawful, constitutionally protected entertainment in
conformity with its various licenses, permits, and/or government approvals, including

but not limited to: an Alcohol License from the State of California and a Restaurant

License issued by the County of Santa Clara and Public Entertainment License

issued by the City of San Jose.
711. SJ is, as of the filing of this action, currently closed for business. As was

required by local and/or state Public Health Orders, SJ closed for business on March

13, 2020. Pursuant to the evolving local and/or state Public Health Orders, SJ has
not reopened. As a direct and proximate result of such municipal pandemic-related

closures and limitations, SJ has suffered significant business and financial losses.

137

Case 2:21-cv-00447-LA Filed 04/07/21 Page 137 of 200 Document 1
712. In order to mitigate its business losses, to provide monetary relief to its

employees (since a controlling percentage of Second Draw PPP loans must be used
for employee wages and salaries), and to be able to purchase PPE and make

Pandemic-related repairs and/or upgrades to its facility (since the Second Draw PPP

expanded the loan’s eligible uses), SJ applied for a Second Draw PPP.

713. SJ has submitted an application for a Second Draw PPP through its
lender, which is an approved SBA lender.

714. Pursuant to 15 U.S.C. § 636(a)(36)(F)(ii)(I), 15 U.S.C. § 636(a)(37)(K),

and/or 15 U.S.C. § 636(a)(F)(iii), SJ’s lender has operated and will operate as a

delegate of the SBA in the processing and approval or disapproval of the Second Draw
PPP sought by SJ.

715. SJ is fully qualified—but for the Regulation, the SOP, the Incorporating

Statute, and/or the SBA’s application of all of the same—to receive a Second Draw
PPP loan under all other relevant statutes, regulations, and procedures.

716. SJ received a First Draw PPP loan under the CARES Act pursuant to

an injunction and ruling by the United States District Court for the Eastern District

of Michigan.
717. SJ’s lender has informed it that its Second Draw PPP application has

been placed on an internal hold by the SBA.

718. SJ is, through its legal counsel, aware that other similar businesses

have received correspondence from the SBA in regard to Second Draw PPP loan
applications wherein the SBA has stated: “Strip clubs remain ineligible for PPP loans.

See 13 CFR § 120.110(p).”

719. SJ is also, through its legal counsel, aware that, irrespective of the
above, other similar “strip clubs” have nevertheless received Second Draw PPP loans.

720. SJ reasonably believes, based on the information that it has received,

the information disclosed and presented in the previous proceedings that resulted in
138

Case 2:21-cv-00447-LA Filed 04/07/21 Page 138 of 200 Document 1
the Regulation and SOP being enjoined and/or barred from enforcement (much of

which is detailed verbatim below), and the actions already taken by the SBA with
regard to its Second Draw PPP loan application and the applications of other similar

businesses as described both above and below (including the applications of the other

Plaintiffs here), that its Second Draw PPP application will be rejected or fatally

delayed by the SBA due to the Regulation, the SOP, the Incorporating Statute, and/or
the SBA’s application of the same.

721. In the event that SJ is unable to obtain a Second Draw PPP, it may lack

the staff, funds, and necessary PPE and facility upgrades to be able to reopen given

the local Pandemic-related capacity restrictions, which may well result in the
permanent ruination of its business; its inability to engage in protected First

Amendment activities; and the inability of its staff, entertainers, and customers to

continue to engage in, associate for the purposes of engaging in, and/or view,
protected First Amendment activities.

PNM Enterprises, Inc. (“PNM”)

722. PNM is a non-alcohol serving commercial establishment open to the

consenting adult public which has presented, presents, and desires to continue to
present in the future, live female performance dance entertainment which is, at

times, fully-clothed, topless, and/or fully-nude. All of the entertainment presented at

PNM is expression presumptively protected under the First Amendment to the

United States Constitution and appeals to normal, healthy, sexual desires.
723. PNM has never been charged, let alone convicted, of any crimes of

obscenity. Similarly, none of the entertainers who have performed on PNM’s premises

have ever been charged, let alone convicted, of any crimes of obscenity related to their
performances at PNM.

724. PNM is categorized as a NAICS code 72 entity.

139

Case 2:21-cv-00447-LA Filed 04/07/21 Page 139 of 200 Document 1
725. PNM presents lawful, constitutionally protected entertainment in

conformity with its various licenses, permits, and/or government approvals, including
but not limited to a Restaurant License issued by the County of Orange.

726. PNM is, as of the filing of this action, currently open for business. As

was required by local and/or state Public Health Orders, PNM closed for business on

March 17, 2020. Pursuant to the evolving local and/or state Public Health Orders,
PNM reopened on October 1, 2020. As a direct and proximate result of such municipal

pandemic-related closures and limitations, PNM has suffered significant business

and financial losses.

727. In order to mitigate its business losses, to provide monetary relief to its
employees (since a controlling percentage of Second Draw PPP loans must be used

for employee wages and salaries), and to be able to purchase PPE and make

Pandemic-related repairs and/or upgrades to its facility (since the Second Draw PPP
expanded the loan’s eligible uses), PNM applied for a Second Draw PPP.

728. PNM has submitted an application for a Second Draw PPP through its

lender, which is an approved SBA lender.

729. Pursuant to 15 U.S.C. § 636(a)(36)(F)(ii)(I), 15 U.S.C. § 636(a)(37)(K),
and/or 15 U.S.C. § 636(a)(F)(iii), PNM’s lender has operated and will operate as a

delegate of the SBA in the processing and approval or disapproval of the Second Draw

PPP sought by PNM.

730. PNM is fully qualified—but for the Regulation, the SOP, the
Incorporating Statute, and/or the SBA’s application of all of the same—to receive a

Second Draw PPP loan under all other relevant statutes, regulations, and procedures.

731. PNM received a First Draw PPP loan under the CARES Act pursuant to
an injunction and ruling by the United States District Court for the Eastern District

of Michigan.

140

Case 2:21-cv-00447-LA Filed 04/07/21 Page 140 of 200 Document 1
732. PNM’s lender has informed it that its Second Draw PPP application has

been placed on an internal hold by the SBA.
733. PNM is, through its legal counsel, aware that other similar businesses

have received correspondence from the SBA in regard to Second Draw PPP loan

applications wherein the SBA has stated: “Strip clubs remain ineligible for PPP loans.

See 13 CFR § 120.110(p).”
734. PNM is also, through its legal counsel, aware that, irrespective of the

above, other similar “strip clubs” have nevertheless received Second Draw PPP loans.

735. PNM reasonably believes, based on the information that it has received,

the information disclosed and presented in the previous proceedings that resulted in
the Regulation and SOP being enjoined and/or barred from enforcement (much of

which is detailed verbatim below), and the actions already taken by the SBA with

regard to its Second Draw PPP loan application and the applications of other similar
businesses as described both above and below (including the applications of the other

Plaintiffs here), that its Second Draw PPP application will be rejected or fatally

delayed by the SBA due to the Regulation, the SOP, the Incorporating Statute, and/or

the SBA’s application of the same.
736. In the event that PNM is unable to obtain a Second Draw PPP, it may

lack the staff, funds, and necessary PPE and facility upgrades to be able to continue

to operate given the local Pandemic-related capacity restrictions, which may well

result in the permanent ruination of its business; its inability to engage in protected
First Amendment activities; and the inability of its staff, entertainers, and customers

to continue to engage in, associate for the purposes of engaging in, and/or view,

protected First Amendment activities.
Rialto Pockets, Inc. (“Rialto”)

737. Rialto is a non-alcohol serving commercial establishment open to the

consenting adult public which has presented, presents, and desires to continue to
141

Case 2:21-cv-00447-LA Filed 04/07/21 Page 141 of 200 Document 1
present in the future, live female performance dance entertainment which is, at

times, fully-clothed, topless, and/or fully nude. All of the entertainment presented at
Rialto is expression presumptively protected under the First Amendment to the

United States Constitution and appeals to normal, healthy, sexual desires.

738. Rialto has never been charged, let alone convicted, of any crimes of

obscenity. Similarly, none of the entertainers who have performed on Rialto’s
premises have ever been charged, let alone convicted, of any crimes of obscenity

related to their performances at Rialto.

739. Rialto is categorized as a NAICS code 72 entity.

740. Rialto presents lawful, constitutionally protected entertainment in
conformity with its various licenses, permits, and/or government approvals, including

but not limited to Restaurant License issued by the County of San Bernardino.

741. Rialto is, as of the filing of this action, currently closed for business. As
was required by local and/or state Public Health Orders, Rialto closed for business on

March 17, 2020. Pursuant to the evolving local and/or state Public Health Orders,

Rialto has not reopened. As a direct and proximate result of such municipal

pandemic-related closures and limitations, Rialto has suffered significant business
and financial losses.

742. In order to mitigate its business losses, to provide monetary relief to its

employees (since a controlling percentage of Second Draw PPP loans must be used

for employee wages and salaries), and to be able to purchase PPE and make
Pandemic-related repairs and/or upgrades to its facility (since the Second Draw PPP

expanded the loan’s eligible uses), Rialto applied for a Second Draw PPP.

743. Rialto has submitted an application for a Second Draw PPP through its
lender, which is an approved SBA lender.

744. Pursuant to 15 U.S.C. § 636(a)(36)(F)(ii)(I), 15 U.S.C. § 636(a)(37)(K),

and/or 15 U.S.C. § 636(a)(F)(iii), Rialto’s lender has operated and will operate as a
142

Case 2:21-cv-00447-LA Filed 04/07/21 Page 142 of 200 Document 1
delegate of the SBA in the processing and approval or disapproval of the Second Draw

PPP sought by Rialto.
745. Rialto is fully qualified—but for the Regulation, the SOP, the

Incorporating Statute, and/or the SBA’s application of all of the same—to receive a

Second Draw PPP loan under all other relevant statutes, regulations, and procedures.

746. Rialto received a First Draw PPP loan under the CARES Act pursuant
to an injunction and ruling by the United States District Court for the Eastern

District of Michigan.

747. Rialto’s lender has informed it that its Second Draw PPP application has

been placed on an internal hold by the SBA.
748. Rialto is, through its legal counsel, aware that other similar businesses

have received correspondence from the SBA in regard to Second Draw PPP loan

applications wherein the SBA has stated: “Strip clubs remain ineligible for PPP loans.
See 13 CFR § 120.110(p).”

749. Rialto is also, through its legal counsel, aware that, irrespective of the

above, other similar “strip clubs” have nevertheless received Second Draw PPP loans.

750. Rialto reasonably believes, based on the information that it has received,
the information disclosed and presented in the previous proceedings that resulted in

the Regulation and SOP being enjoined and/or barred from enforcement (much of

which is detailed verbatim below), and the actions already taken by the SBA with

regard to its Second Draw PPP loan application and the applications of other similar
businesses as described both above and below (including the applications of the other

Plaintiffs here), that its Second Draw PPP application will be rejected or fatally

delayed by the SBA due to the Regulation, the SOP, the Incorporating Statute, and/or
the SBA’s application of the same.

751. In the event that Rialto is unable to obtain a Second Draw PPP, it may

lack the staff, funds, and necessary PPE and facility upgrades to be able to reopen
143

Case 2:21-cv-00447-LA Filed 04/07/21 Page 143 of 200 Document 1
given the local Pandemic-related capacity restrictions, which may well result in the

permanent ruination of its business; its inability to engage in protected First
Amendment activities; and the inability of its staff, entertainers, and customers to

continue to engage in, associate for the purposes of engaging in, and/or view,

protected First Amendment activities.

Rouge Gentlemen’s Club, Inc. (“Rouge”)
752. Rouge is an alcohol-serving commercial establishment open to the

consenting adult public which has presented, presents, and desires to continue to

present in the future, live female performance dance entertainment which is, at

times, fully-clothed or topless. All of the entertainment presented at Rouge is
expression presumptively protected under the First Amendment to the United States

Constitution and appeals to normal, healthy, sexual desires.

753. Rouge has never been charged, let alone convicted, of any crimes of
obscenity. Similarly, none of the entertainers who have performed on Rouge’s

premises have ever been charged, let alone convicted, of any crimes of obscenity

related to their performances at Rouge.

754. Rouge is categorized as a NAICS code 72 entity.
755. Rouge presents lawful, constitutionally protected entertainment in

conformity with its various licenses, permits, and/or government approvals, including

but not limited to an Alcohol License from the State of California, Café Entertainment

License issued by the City of Los Angeles and a Restaurant License issued by the
County of Los Angeles.

756. Rouge is, as of the filing of this action, currently closed for business. As

was required by local and/or state Public Health Orders, Rouge closed for business on
March 16, 2020. Pursuant to the evolving local and/or state Public Health Orders,

Rouge has not reopened. As a direct and proximate result of such municipal

144

Case 2:21-cv-00447-LA Filed 04/07/21 Page 144 of 200 Document 1
pandemic-related closures and limitations, Rouge has suffered significant business

and financial losses.
757. In order to mitigate its business losses, to provide monetary relief to its

employees (since a controlling percentage of Second Draw PPP loans must be used

for employee wages and salaries), and to be able to purchase PPE and make

Pandemic-related repairs and/or upgrades to its facility (since the Second Draw PPP
expanded the loan’s eligible uses), Rouge applied for a Second Draw PPP.

758. Rouge has submitted an application for a Second Draw PPP through its

lender, which is an approved SBA lender.

759. Pursuant to 15 U.S.C. § 636(a)(36)(F)(ii)(I), 15 U.S.C. § 636(a)(37)(K),
and/or 15 U.S.C. § 636(a)(F)(iii), Rouge’s lender has operated and will operate as a

delegate of the SBA in the processing and approval or disapproval of the Second Draw

PPP sought by Rouge.
760. Rouge is fully qualified—but for the Regulation, the SOP, the

Incorporating Statute, and/or the SBA’s application of all of the same—to receive a

Second Draw PPP loan under all other relevant statutes, regulations, and procedures.

761. Rouge received a First Draw PPP loan under the CARES Act pursuant
to an injunction and ruling by the United States District Court for the Eastern

District of Michigan.

762. Rouge’s lender has informed it that its Second Draw PPP application

has been placed on an internal hold by the SBA.
763. Rouge is, through its legal counsel, aware that other similar businesses

have received correspondence from the SBA in regard to Second Draw PPP loan

applications wherein the SBA has stated: “Strip clubs remain ineligible for PPP loans.
See 13 CFR § 120.110(p).”

764. Rouge is also, through its legal counsel, aware that, irrespective of the

above, other similar “strip clubs” have nevertheless received Second Draw PPP loans.
145

Case 2:21-cv-00447-LA Filed 04/07/21 Page 145 of 200 Document 1
765. Rouge reasonably believes, based on the information that it has

received, the information disclosed and presented in the previous proceedings that
resulted in the Regulation and SOP being enjoined and/or barred from enforcement

(much of which is detailed verbatim below), and the actions already taken by the SBA

with regard to its Second Draw PPP loan application and the applications of other

similar businesses as described both above and below (including the applications of
the other Plaintiffs here), that its Second Draw PPP application will be rejected or

fatally delayed by the SBA due to the Regulation, the SOP, the Incorporating Statute,

and/or the SBA’s application of the same.

766. In the event that Rouge is unable to obtain a Second Draw PPP, it may
lack the staff, funds, and necessary PPE and facility upgrades to be able to reopen

given the local Pandemic-related capacity restrictions, which may well result in the

permanent ruination of its business; its inability to engage in protected First
Amendment activities; and the inability of its staff, entertainers, and customers to

continue to engage in, associate for the purposes of engaging in, and/or view,

protected First Amendment activities.

Santa Barbara Hospitality Services, Inc. (“Santa Barbara”)
767. Santa Barbara is a non-alcohol serving commercial establishment open

to the consenting adult public which has presented, presents, and desires to continue

to present in the future, live female performance dance entertainment which is, at

times, fully-clothed, topless, and/or fully nude. All of the entertainment presented at
Santa Barbara is expression presumptively protected under the First Amendment to

the United States Constitution and appeals to normal, healthy, sexual desires.

768. Santa Barbara has never been charged, let alone convicted, of any
crimes of obscenity. Similarly, none of the entertainers who have performed on Santa

Barbara’s premises have ever been charged, let alone convicted, of any crimes of

obscenity related to their performances at Santa Barbara.
146

Case 2:21-cv-00447-LA Filed 04/07/21 Page 146 of 200 Document 1
769. Santa Barbara is categorized as a NAICS code 72 entity.

770. Santa Barbara presents lawful, constitutionally protected
entertainment in conformity with its various licenses, permits, and/or government

approvals including but not limited to a Restaurant License issued by the County of

Santa Barbara.

771. Santa Barbara is, as of the filing of this action, currently closed for
business. As was required by local and/or state Public Health Orders, Santa Barbara

closed for business on March 15, 2020. Pursuant to the evolving local and/or state

Public Health Orders, Santa Barbara has not reopened .As a direct and proximate

result of such municipal pandemic-related closures and limitations, Santa Barbara
has suffered significant business and financial losses.

772. In order to mitigate its business losses, to provide monetary relief to its

employees (since a controlling percentage of Second Draw PPP loans must be used
for employee wages and salaries), and to be able to purchase PPE and make

Pandemic-related repairs and/or upgrades to its facility (since the Second Draw PPP

expanded the loan’s eligible uses), Santa Barbara applied for a Second Draw PPP.

773. Santa Barbara has submitted an application for a Second Draw PPP
through its lender, which is an approved SBA lender.

774. Pursuant to 15 U.S.C. § 636(a)(36)(F)(ii)(I), 15 U.S.C. § 636(a)(37)(K),

and/or 15 U.S.C. § 636(a)(F)(iii), Santa Barbara’s lender has operated and will operate

as a delegate of the SBA in the processing and approval or disapproval of the Second
Draw PPP sought by Santa Barbara.

775. Santa Barbara is fully qualified—but for the Regulation, the SOP, the

Incorporating Statute, and/or the SBA’s application of all of the same—to receive a
Second Draw PPP loan under all other relevant statutes, regulations, and procedures.

147

Case 2:21-cv-00447-LA Filed 04/07/21 Page 147 of 200 Document 1
776. Santa Barbara received a First Draw PPP loan under the CARES Act

pursuant to an injunction and ruling by the United States District Court for the
Eastern District of Michigan.

777. Santa Barbara’s lender has informed it that its Second Draw PPP

application has been placed on an internal hold by the SBA.

778. Santa Barbara is, through its legal counsel, aware that other similar
businesses have received correspondence from the SBA in regard to Second Draw

PPP loan applications wherein the SBA has stated: “Strip clubs remain ineligible for

PPP loans. See 13 CFR § 120.110(p).”

779. Santa Barbara is also, through its legal counsel, aware that, irrespective
of the above, other similar “strip clubs” have nevertheless received Second Draw PPP

loans.

780. Santa Barbara reasonably believes, based on the information that it has
received, the information disclosed and presented in the previous proceedings that

resulted in the Regulation and SOP being enjoined and/or barred from enforcement

(much of which is detailed verbatim below), and the actions already taken by the SBA

with regard to its Second Draw PPP loan application and the applications of other
similar businesses as described both above and below (including the applications of

the other Plaintiffs here), that its Second Draw PPP application will be rejected or

fatally delayed by the SBA due to the Regulation, the SOP, the Incorporating Statute,

and/or the SBA’s application of the same.
781. In the event that Santa Barbara is unable to obtain a Second Draw PPP,

it may lack the staff, funds, and necessary PPE and facility upgrades to be able to

reopen given the local Pandemic-related capacity restrictions, which may well result
in the permanent ruination of its business; its inability to engage in protected First

Amendment activities; and the inability of its staff, entertainers, and customers to

148

Case 2:21-cv-00447-LA Filed 04/07/21 Page 148 of 200 Document 1
continue to engage in, associate for the purposes of engaging in, and/or view,

protected First Amendment activities.
Santa Maria Restaurant Enterprises, Inc. (“Santa Maria”)

782. Santa Maria is a non-alcohol serving commercial establishment open to

the consenting adult public which has presented, presents, and desires to continue to

present in the future, live female performance dance entertainment which is, at
times, fully-clothed, topless, and/or fully nude. All of the entertainment presented at

Santa Maria is expression presumptively protected under the First Amendment to

the United States Constitution and appeals to normal, healthy, sexual desires.

783. Santa Maria has never been charged, let alone convicted, of any crimes
of obscenity. Similarly, none of the entertainers who have performed on Santa Maria’s

premises have ever been charged, let alone convicted, of any crimes of obscenity

related to their performances at Santa Maria.
784. Santa Maria is categorized as a NAICS code 72 entity.

785. Santa Maria presents lawful, constitutionally protected entertainment

in conformity with its various licenses, permits, and/or government approvals

including but not limited to a Restaurant License issued by the County of Santa
Barbara.

786. Santa Maria is, as of the filing of this action, currently closed for

business. As was required by local and/or state Public Health Orders, Santa Maria

closed for business on March 16, 2020. Pursuant to the evolving local and/or state
Public Health Orders, Santa Maria has not reopened. As a direct and proximate

result of such municipal pandemic-related closures and limitations, Santa Maria has

suffered significant business and financial losses.
787. In order to mitigate its business losses, to provide monetary relief to its

employees (since a controlling percentage of Second Draw PPP loans must be used

for employee wages and salaries), and to be able to purchase PPE and make
149

Case 2:21-cv-00447-LA Filed 04/07/21 Page 149 of 200 Document 1
Pandemic-related repairs and/or upgrades to its facility (since the Second Draw PPP

expanded the loan’s eligible uses), Santa Maria applied for a Second Draw PPP.
788. Santa Maria has submitted an application for a Second Draw PPP

through its lender, which is an approved SBA lender.

789. Pursuant to 15 U.S.C. § 636(a)(36)(F)(ii)(I), 15 U.S.C. § 636(a)(37)(K),

and/or 15 U.S.C. § 636(a)(F)(iii), Santa Maria’s lender has operated and will operate
as a delegate of the SBA in the processing and approval or disapproval of the Second

Draw PPP sought by Santa Maria.

790. Santa Maria is fully qualified—but for the Regulation, the SOP, the

Incorporating Statute, and/or the SBA’s application of all of the same—to receive a
Second Draw PPP loan under all other relevant statutes, regulations, and procedures.

791. Santa Maria received a First Draw PPP loan under the CARES Act

pursuant to an injunction and ruling by the United States District Court for the
Eastern District of Michigan.

792. Santa Maria’s lender has informed it that its Second Draw PPP

application has been placed on an internal hold by the SBA.

793. Santa Maria is, through its legal counsel, aware that other similar
businesses have received correspondence from the SBA in regard to Second Draw

PPP loan applications wherein the SBA has stated: “Strip clubs remain ineligible for

PPP loans. See 13 CFR § 120.110(p).”

794. Santa Maria is also, through its legal counsel, aware that, irrespective
of the above, other similar “strip clubs” have nevertheless received Second Draw PPP

loans.

795. Santa Maria reasonably believes, based on the information that it has
received, the information disclosed and presented in the previous proceedings that

resulted in the Regulation and SOP being enjoined and/or barred from enforcement

(much of which is detailed verbatim below), and the actions already taken by the SBA
150

Case 2:21-cv-00447-LA Filed 04/07/21 Page 150 of 200 Document 1
with regard to its Second Draw PPP loan application and the applications of other

similar businesses as described both above and below (including the applications of
the other Plaintiffs here), that its Second Draw PPP application will be rejected or

fatally delayed by the SBA due to the Regulation, the SOP, the Incorporating Statute,

and/or the SBA’s application of the same.

796. In the event that Santa Maria is unable to obtain a Second Draw PPP,
it may lack the staff, funds, and necessary PPE and facility upgrades to be able to

reopen given the local Pandemic-related capacity restrictions, which may well result

in the permanent ruination of its business; its inability to engage in protected First

Amendment activities; and the inability of its staff, entertainers, and customers to
continue to engage in, associate for the purposes of engaging in, and/or view,

protected First Amendment activities.

Saries Lounge, LLC (“Saries”)
797. Saries is an alcohol-serving commercial establishment open to the

consenting adult public which has presented, presents, and desires to continue to

present in the future, live female performance dance entertainment which is, at

times, fully-clothed or topless. All of the entertainment presented at Saries is
expression presumptively protected under the First Amendment to the United States

Constitution and appeals to normal, healthy, sexual desires.

798. Saries has never been charged, let alone convicted, of any crimes of

obscenity. Similarly, none of the entertainers who have performed on Saries’s
premises have ever been charged, let alone convicted, of any crimes of obscenity

related to their performances at Saries.

799. Saries is categorized as a NAICS code 72 entity.
800. Saries presents lawful, constitutionally protected entertainment in

conformity with its various licenses, permits, and/or government approvals including

151

Case 2:21-cv-00447-LA Filed 04/07/21 Page 151 of 200 Document 1
but not limited to an Alcohol License issued by the State of Iowa and a Restaurant

License issued by the State of Iowa.
801. Saries is, as of the filing of this action, currently open for business. As

was required by local and/or state Public Health Orders, Saries closed for business

on March 17, 2020. Pursuant to the evolving local and/or state Public Health Orders,

Saries reopened on May 28, 2020. As a direct and proximate result of such municipal
pandemic-related closures and limitations, Saries has suffered significant business

and financial losses.

802. In order to mitigate its business losses, to provide monetary relief to its

employees (since a controlling percentage of Second Draw PPP loans must be used
for employee wages and salaries), and to be able to purchase PPE and make

Pandemic-related repairs and/or upgrades to its facility (since the Second Draw PPP

expanded the loan’s eligible uses), Saries applied for a Second Draw PPP.
803. Saries has submitted an application for a Second Draw PPP through its

lender, which is an approved SBA lender.

804. Pursuant to 15 U.S.C. § 636(a)(36)(F)(ii)(I), 15 U.S.C. § 636(a)(37)(K),

and/or 15 U.S.C. § 636(a)(F)(iii), Saries’s lender has operated and will operate as a
delegate of the SBA in the processing and approval or disapproval of the Second Draw

PPP sought by Saries.

805. Saries is fully qualified—but for the Regulation, the SOP, the

Incorporating Statute, and/or the SBA’s application of all of the same—to receive a
Second Draw PPP loan under all other relevant statutes, regulations, and procedures.

806. Saries received a First Draw PPP loan under the CARES Act pursuant

to an injunction and ruling by the United States District Court for the Eastern
District of Michigan.

807. Saries’s lender has informed it that its Second Draw PPP application

has been placed on an internal hold by the SBA.
152

Case 2:21-cv-00447-LA Filed 04/07/21 Page 152 of 200 Document 1
808. Saries is, through its legal counsel, aware that other similar businesses

have received correspondence from the SBA in regard to Second Draw PPP loan
applications wherein the SBA has stated: “Strip clubs remain ineligible for PPP loans.

See 13 CFR § 120.110(p).”

809. Saries is also, through its legal counsel, aware that, irrespective of the

above, other similar “strip clubs” have nevertheless received Second Draw PPP loans.
810. Saries reasonably believes, based on the information that it has

received, the information disclosed and presented in the previous proceedings that

resulted in the Regulation and SOP being enjoined and/or barred from enforcement

(much of which is detailed verbatim below), and the actions already taken by the SBA
with regard to its Second Draw PPP loan application and the applications of other

similar businesses as described both above and below (including the applications of

the other Plaintiffs here), that its Second Draw PPP application will be rejected or
fatally delayed by the SBA due to the Regulation, the SOP, the Incorporating Statute,

and/or the SBA’s application of the same.

811. In the event that Saries is unable to obtain a Second Draw PPP, it may

lack the staff, funds, and necessary PPE and facility upgrades to be able to continue
to operate given the local Pandemic-related capacity restrictions, which may well

result in the permanent ruination of its business; its inability to engage in protected

First Amendment activities; and the inability of its staff, entertainers, and customers

to continue to engage in, associate for the purposes of engaging in, and/or view,
protected First Amendment activities.

Spearmint Rhino Companies Worldwide, Inc. (“Worldwide”)

812. Worldwide is an intellectual property licensing company that provides
intellectual property licenses.

813. Worldwide provides services to a number of establishments that provide

life female performance dance entertainment, including, all Spearmint Rhino
153

Case 2:21-cv-00447-LA Filed 04/07/21 Page 153 of 200 Document 1
Gentlemen’s Clubs, California Girls, Dames N’ Games, and Blue Zebra

establishments.
814. All of the entertainment presented at the businesses Worldwide services

is expression presumptively protected under the First Amendment to the United

States Constitution and appeals to normal, healthy, sexual desires. None of the

businesses Worldwide services has ever been charged, let alone convicted, of any
crimes of obscenity. Similarly, none of the entertainers who have performed at the

businesses Worldwide services have ever been charged, let alone convicted, of any

crimes of obscenity related to their performances at the businesses Worldwide

services
815. A number of entities Worldwide services have been, pursuant to local

and/or state Pandemic orders, closed and have not been permitted to reopen or closed

and then reopened in limited capacities as a result of the Pandemic. As was required
by local and/or state Public Health Orders, Worldwide closed on March 20, 2020, and

did not reopen permitted to do so on July 27, 2020, with heavily reduced staff. As a

direct and proximate result of such state-ordered closures, Worldwide has suffered

significant business losses and was forced to layoff significant numbers of its staff.
Worldwide plans to return to full operations when its clients are able to do so.

816. In order to mitigate its business losses, to provide monetary relief to its

employees (since a controlling percentage of Second Draw PPP loans must be used

for employee wages and salaries), and to be able to purchase PPE and make
Pandemic-related repairs and/or upgrades to its facility (since the Second Draw PPP

expanded the loan’s eligible uses), Worldwide applied for a Second Draw PPP.

817. Worldwide has submitted an application for a Second Draw PPP
through its lender, which is an approved SBA lender.

818. Pursuant to 15 U.S.C. § 636(a)(36)(F)(ii)(I), 15 U.S.C. § 636(a)(37)(K),

and/or 15 U.S.C. § 636(a)(F)(iii), Worldwide’s lender has operated and will operate as
154

Case 2:21-cv-00447-LA Filed 04/07/21 Page 154 of 200 Document 1
a delegate of the SBA in the processing and approval or disapproval of the Second

Draw PPP sought by Worldwide.
819. Worldwide is fully qualified—but for the Regulation, the SOP, the

Incorporating Statute, and/or the SBA’s application of all of the same—to receive a

Second Draw PPP loan under all other relevant statutes, regulations, and procedures.

820. Worldwide received a First Draw PPP loan under the CARES Act
pursuant to an injunction and ruling by the United States District Court for the

Eastern District of Michigan.

821. Worldwide’s lender has informed it that its Second Draw PPP

application has been placed on an internal hold by the SBA.
822. Worldwide is, through its legal counsel, aware that other similar

businesses have received correspondence from the SBA in regard to Second Draw

PPP loan applications wherein the SBA has stated: “Strip clubs remain ineligible for
PPP loans. See 13 CFR § 120.110(p).”

823. Worldwide is also, through its legal counsel, aware that, irrespective of

the above, other similar “strip clubs” have nevertheless received Second Draw PPP

loans.
824. Worldwide reasonably believes, based on the information that it has

received, the information disclosed and presented in the previous proceedings that

resulted in the Regulation and SOP being enjoined and/or barred from enforcement

(much of which is detailed verbatim below), and the actions already taken by the SBA
with regard to its Second Draw PPP loan application and the applications of other

similar businesses as described both above and below (including the applications of

the other Plaintiffs here), that its Second Draw PPP application will be rejected or
fatally delayed by the SBA due to the Regulation, the SOP, the Incorporating Statute,

and/or the SBA’s application of the same.

155

Case 2:21-cv-00447-LA Filed 04/07/21 Page 155 of 200 Document 1
825. In the event that Worldwide is unable to obtain a Second Draw PPP, it

may lack the staff, funds, and necessary PPE and facility upgrades to be able to
continue to operate given the local Pandemic-related capacity restrictions, which may

well result in the permanent ruination of its business; its inability to engage in

protected First Amendment activities; and the inability of its staff, entertainers, and

customers to continue to engage in, associate for the purposes of engaging in, and/or
view, protected First Amendment activities.

Spearmint Rhino Consulting Worldwide, Inc. (“Consulting”)

826. Consulting is a business services company that provides a range of

services to businesses including, inter alia: marketing and consulting.
827. Consulting provides services to a number of establishments that provide

life female performance dance entertainment, including, all Spearmint Rhino

Gentlemen’s Clubs, California Girls, Dames N’ Games, and Blue Zebra
establishments.

828. All of the entertainment presented at the businesses Consulting services

is expression presumptively protected under the First Amendment to the United

States Constitution and appeals to normal, healthy, sexual desires. None of the
businesses Consulting services has ever been charged, let alone convicted, of any

crimes of obscenity. Similarly, none of the entertainers who have performed at the

businesses Consulting services have ever been charged, let alone convicted, of any

crimes of obscenity related to their performances at the businesses Consulting
services

829. A number of entities Consulting services have been, pursuant to local

and/or state Pandemic orders, closed and have not been permitted to reopen or closed
and then reopened in limited capacities as a result of the Pandemic. As was required

by local and/or state Public Health Orders, Consulting closed on March 20, 2020, and

did not reopen permitted to do so on July 27, 2020, with heavily reduced staff. As a
156

Case 2:21-cv-00447-LA Filed 04/07/21 Page 156 of 200 Document 1
direct and proximate result of such state-ordered closures, Consulting has suffered

significant business losses and was forced to layoff significant numbers of its staff.
Consulting plans to return to full operations when its clients are able to do so.

830. In order to mitigate its business losses, to provide monetary relief to its

employees (since a controlling percentage of Second Draw PPP loans must be used

for employee wages and salaries), and to be able to purchase PPE and make
Pandemic-related repairs and/or upgrades to its facility (since the Second Draw PPP

expanded the loan’s eligible uses), Consulting applied for a Second Draw PPP.

831. Consulting has submitted an application for a Second Draw PPP

through its lender, which is an approved SBA lender.
832. Pursuant to 15 U.S.C. § 636(a)(36)(F)(ii)(I), 15 U.S.C. § 636(a)(37)(K),

and/or 15 U.S.C. § 636(a)(F)(iii), Consulting’s lender has operated and will operate as

a delegate of the SBA in the processing and approval or disapproval of the Second
Draw PPP sought by Consulting.

833. Consulting is fully qualified—but for the Regulation, the SOP, the

Incorporating Statute, and/or the SBA’s application of all of the same—to receive a

Second Draw PPP loan under all other relevant statutes, regulations, and procedures.
834. Consulting received a First Draw PPP loan under the CARES Act

pursuant to an injunction and ruling by the United States District Court for the

Eastern District of Michigan.

835. Consulting’s lender has informed it that its Second Draw PPP
application has been placed on an internal hold by the SBA.

836. Consulting is, through its legal counsel, aware that other similar

businesses have received correspondence from the SBA in regard to Second Draw
PPP loan applications wherein the SBA has stated: “Strip clubs remain ineligible for

PPP loans. See 13 CFR § 120.110(p).”

157

Case 2:21-cv-00447-LA Filed 04/07/21 Page 157 of 200 Document 1
837. Consulting is also, through its legal counsel, aware that, irrespective of

the above, other similar “strip clubs” have nevertheless received Second Draw PPP
loans.

838. Consulting reasonably believes, based on the information that it has

received, the information disclosed and presented in the previous proceedings that

resulted in the Regulation and SOP being enjoined and/or barred from enforcement
(much of which is detailed verbatim below), and the actions already taken by the SBA

with regard to its Second Draw PPP loan application and the applications of other

similar businesses as described both above and below (including the applications of

the other Plaintiffs here), that its Second Draw PPP application will be rejected or
fatally delayed by the SBA due to the Regulation, the SOP, the Incorporating Statute,

and/or the SBA’s application of the same.

839. In the event that Consulting is unable to obtain a Second Draw PPP, it
may lack the staff, funds, and necessary PPE and facility upgrades to be able to

continue to operate given the local Pandemic-related capacity restrictions, which may

well result in the permanent ruination of its business; its inability to engage in

protected First Amendment activities; and the inability of its staff, entertainers, and
customers to continue to engage in, associate for the purposes of engaging in, and/or

view, protected First Amendment activities.

Washington Management, LLC (“Washington Mgmt”)

840. Washington Mgmt is an alcohol-serving commercial establishment open
to the consenting adult public which has presented, presents, and desires to continue

to present in the future, live female performance dance entertainment which is, at

times, fully-clothed or topless. All of the entertainment presented at Washington
Mgmt is expression presumptively protected under the First Amendment to the

United States Constitution and appeals to normal, healthy, sexual desires.

158

Case 2:21-cv-00447-LA Filed 04/07/21 Page 158 of 200 Document 1
841. Washington Mgmt has never been charged, let alone convicted, of any

crimes of obscenity. Similarly, none of the entertainers who have performed on
Washington Mgmt’s premises have ever been charged, let alone convicted, of any

crimes of obscenity related to their performances at Washington Mgmt.

842. Washington Mgmt is categorized as a NAICS code 72 entity.

843. Washington Mgmt presents lawful, constitutionally protected
entertainment in conformity with its various licenses, permits, and/or government

approvals, including but not limited to an Alcohol License from the State of

California, Café Entertainment License issued by the City of Los Angeles and a

Restaurant License issued by the County of Los Angeles.
844. Washington Mgmt is, as of the filing of this action, currently closed for

business. As was required by local and/or state Public Health Orders, Washington

Mgmt closed for business on March 16, 2020. Pursuant to the evolving local and/or
state Public Health Orders, Washington Mgmt has not reopened. As a direct and

proximate result of such municipal pandemic-related closures and limitations,

Washington Mgmt has suffered significant business and financial losses.

845. In order to mitigate its business losses, to provide monetary relief to its
employees (since a controlling percentage of Second Draw PPP loans must be used

for employee wages and salaries), and to be able to purchase PPE and make

Pandemic-related repairs and/or upgrades to its facility (since the Second Draw PPP

expanded the loan’s eligible uses), Washington Mgmt applied for a Second Draw PPP.
846. Washington Mgmt has submitted an application for a Second Draw PPP

through its lender, which is an approved SBA lender.

847. Pursuant to 15 U.S.C. § 636(a)(36)(F)(ii)(I), 15 U.S.C. § 636(a)(37)(K),
and/or 15 U.S.C. § 636(a)(F)(iii), Washington Mgmt’s lender has operated and will

operate as a delegate of the SBA in the processing and approval or disapproval of the

Second Draw PPP sought by Washington Mgmt.
159

Case 2:21-cv-00447-LA Filed 04/07/21 Page 159 of 200 Document 1
848. Washington Mgmt is fully qualified—but for the Regulation, the SOP,

the Incorporating Statute, and/or the SBA’s application of all of the same—to receive
a Second Draw PPP loan under all other relevant statutes, regulations, and

procedures.

849. Washington Mgmt received a First Draw PPP loan under the CARES

Act pursuant to an injunction and ruling by the United States District Court for the
Eastern District of Michigan.

850. Washington Mgmt’s lender has informed it that its Second Draw PPP

application has been placed on an internal hold by the SBA.

851. Washington Mgmt is, through its legal counsel, aware that other similar
businesses have received correspondence from the SBA in regard to Second Draw

PPP loan applications wherein the SBA has stated: “Strip clubs remain ineligible for

PPP loans. See 13 CFR § 120.110(p).”
852. Washington Mgmt is also, through its legal counsel, aware that,

irrespective of the above, other similar “strip clubs” have nevertheless received

Second Draw PPP loans.

853. Washington Mgmt reasonably believes, based on the information that it
has received, the information disclosed and presented in the previous proceedings

that resulted in the Regulation and SOP being enjoined and/or barred from

enforcement (much of which is detailed verbatim below), and the actions already

taken by the SBA with regard to its Second Draw PPP loan application and the
applications of other similar businesses as described both above and below (including

the applications of the other Plaintiffs here), that its Second Draw PPP application

will be rejected or fatally delayed by the SBA due to the Regulation, the SOP, the
Incorporating Statute, and/or the SBA’s application of the same.

854. In the event that Washington Mgmt is unable to obtain a Second Draw

PPP, it may lack the staff, funds, and necessary PPE and facility upgrades to be able
160

Case 2:21-cv-00447-LA Filed 04/07/21 Page 160 of 200 Document 1
to reopen given the local Pandemic-related capacity restrictions, which may well

result in the permanent ruination of its business; its inability to engage in protected
First Amendment activities; and the inability of its staff, entertainers, and customers

to continue to engage in, associate for the purposes of engaging in, and/or view,

protected First Amendment activities.

W.P.B. Hospitality, LLC (“WPB”)
855. WPB is an alcohol-serving commercial establishment open to the

consenting adult public which has presented, presents, and desires to continue to

present in the future, live female performance dance entertainment which is, at

times, fully-clothed, topless, and/or fully nude. All of the entertainment presented at
WPB is expression presumptively protected under the First Amendment to the

United States Constitution and appeals to normal, healthy, sexual desires.

856. WPB has never been charged, let alone convicted, of any crimes of
obscenity. Similarly, none of the entertainers who have performed on WPB’s premises

have ever been charged, let alone convicted, of any crimes of obscenity related to their

performances at WPB.

857. WPB is categorized as a NAICS code 72 entity.
858. WPB presents lawful, constitutionally protected entertainment in

conformity with its various licenses, permits, and/or government approvals, including

but not limited to a Liquor License issued by the State of Florida, Adult Dancing

License issued by the State of Florida, Restaurant License issued by the State of
Florida and Live Entertainment License issued by the State of Florida.

859. WPB is, as of the filing of this action, currently open for business. As

was required by local and/or state Public Health Orders, WPB closed for business on
March 17, 2020. Pursuant to the evolving local and/or state Public Health Orders,

WPB reopened on June 4, 2020, but closed the same day and could not reopen again

until September 30, 2020. As a direct and proximate result of such municipal
161

Case 2:21-cv-00447-LA Filed 04/07/21 Page 161 of 200 Document 1
pandemic-related closures and limitations, WPB has suffered significant business

and financial losses.
860. In order to mitigate its business losses, to provide monetary relief to its

employees (since a controlling percentage of Second Draw PPP loans must be used

for employee wages and salaries), and to be able to purchase PPE and make

Pandemic-related repairs and/or upgrades to its facility (since the Second Draw PPP
expanded the loan’s eligible uses), WPB applied for a Second Draw PPP.

861. WPB has submitted an application for a Second Draw PPP through its

lender, which is an approved SBA lender.

862. Pursuant to 15 U.S.C. § 636(a)(36)(F)(ii)(I), 15 U.S.C. § 636(a)(37)(K),
and/or 15 U.S.C. § 636(a)(F)(iii), WPB’s lender has operated and will operate as a

delegate of the SBA in the processing and approval or disapproval of the Second Draw

PPP sought by WPB.
863. WPB is fully qualified—but for the Regulation, the SOP, the

Incorporating Statute, and/or the SBA’s application of all of the same—to receive a

Second Draw PPP loan under all other relevant statutes, regulations, and procedures.

864. WPB received a First Draw PPP loan under the CARES Act pursuant to
an injunction and ruling by the United States District Court for the Eastern District

of Michigan.

865. WPB’s lender has informed it that its Second Draw PPP application has

been placed on an internal hold by the SBA.
866. WPB is, through its legal counsel, aware that other similar businesses

have received correspondence from the SBA in regard to Second Draw PPP loan

applications wherein the SBA has stated: “Strip clubs remain ineligible for PPP loans.
See 13 CFR § 120.110(p).”

867. WPB is also, through its legal counsel, aware that, irrespective of the

above, other similar “strip clubs” have nevertheless received Second Draw PPP loans.
162

Case 2:21-cv-00447-LA Filed 04/07/21 Page 162 of 200 Document 1
868. WPB reasonably believes, based on the information that it has received,

the information disclosed and presented in the previous proceedings that resulted in
the Regulation and SOP being enjoined and/or barred from enforcement (much of

which is detailed verbatim below), and the actions already taken by the SBA with

regard to its Second Draw PPP loan application and the applications of other similar

businesses as described both above and below (including the applications of the other
Plaintiffs here), that its Second Draw PPP application will be rejected or fatally

delayed by the SBA due to the Regulation, the SOP, the Incorporating Statute, and/or

the SBA’s application of the same.

869. In the event that WPB is unable to obtain a Second Draw PPP, it may
lack the staff, funds, and necessary PPE and facility upgrades to be able to continue

to operate given the local Pandemic-related capacity restrictions, which may well

result in the permanent ruination of its business; its inability to engage in protected
First Amendment activities; and the inability of its staff, entertainers, and customers

to continue to engage in, associate for the purposes of engaging in, and/or view,

protected First Amendment activities.

K-Kel, Inc. (“K-Kel”)
870. K-Kel is an alcohol-serving commercial establishment open to the

consenting adult public which has presented, presents, and desires to continue to

present in the future, live female performance dance entertainment which is, at

times, fully-clothed or topless. All of the entertainment presented at K-Kel is
expression presumptively protected under the First Amendment to the United States

Constitution and appeals to normal, healthy, sexual desires.

871. K-Kel has never been charged, let alone convicted, of any crimes of
obscenity. Similarly, none of the entertainers who have performed on K-Kel’s

premises have ever been charged, let alone convicted, of any crimes of obscenity

related to their performances at K-Kel.
163

Case 2:21-cv-00447-LA Filed 04/07/21 Page 163 of 200 Document 1
872. K-Kel is categorized as a NAICS code 72 entity.

873. K-Kel presents lawful, constitutionally protected entertainment in
conformity with its various licenses, permits, and/or government approvals, including

but not limited to a Liquor License issued by the State of Nevada, Adult

Entertainment Cabaret License issued by Clark County and a Restaurant License

issued by the State of Nevada.
874. K-Kel is, as of the filing of this action, currently open for business. As

was required by local and/or state Public Health Orders, K-Kel closed for business on

March 17, 2020. Pursuant to the evolving local and/or state Public Health Orders, K-

Kel briefly reopened from November 13, 2020, through November 14, 2020, and again
from November 20, 2020, through November 21, 2020. K-Kel then, when permitted,

reopened on December 4, 2020. As a direct and proximate result of such municipal

pandemic-related closures and limitations, K-Kel has suffered significant business
and financial losses.

875. In order to mitigate its business losses, to provide monetary relief to its

employees (since a controlling percentage of Second Draw PPP loans must be used

for employee wages and salaries), and to be able to purchase PPE and make
Pandemic-related repairs and/or upgrades to its facility (since the Second Draw PPP

expanded the loan’s eligible uses), K-Kel applied for a Second Draw PPP.

876. K-Kel has submitted an application for a Second Draw PPP through its

lender, which is an approved SBA lender.
877. Pursuant to 15 U.S.C. § 636(a)(36)(F)(ii)(I), 15 U.S.C. § 636(a)(37)(K),

and/or 15 U.S.C. § 636(a)(F)(iii), K-Kel’s lender has operated and will operate as a

delegate of the SBA in the processing and approval or disapproval of the Second Draw
PPP sought by K-Kel.

164

Case 2:21-cv-00447-LA Filed 04/07/21 Page 164 of 200 Document 1
878. K-Kel is fully qualified—but for the Regulation, the SOP, the

Incorporating Statute, and/or the SBA’s application of all of the same—to receive a
Second Draw PPP loan under all other relevant statutes, regulations, and procedures.

879. K-Kel received a First Draw PPP loan under the CARES Act pursuant

to an injunction and ruling by the United States District Court for the Eastern

District of Michigan.
880. K-Kel’s lender has informed it that its Second Draw PPP application has

been placed on an internal hold by the SBA.

881. K-Kel is, through its legal counsel, aware that other similar businesses

have received correspondence from the SBA in regard to Second Draw PPP loan
applications wherein the SBA has stated: “Strip clubs remain ineligible for PPP loans.

See 13 CFR § 120.110(p).”

882. K-Kel is also, through its legal counsel, aware that, irrespective of the
above, other similar “strip clubs” have nevertheless received Second Draw PPP loans.

883. K-Kel reasonably believes, based on the information that it has received,

the information disclosed and presented in the previous proceedings that resulted in

the Regulation and SOP being enjoined and/or barred from enforcement (much of
which is detailed verbatim below), and the actions already taken by the SBA with

regard to its Second Draw PPP loan application and the applications of other similar

businesses as described both above and below (including the applications of the other

Plaintiffs here), that its Second Draw PPP application will be rejected or fatally
delayed by the SBA due to the Regulation, the SOP, the Incorporating Statute, and/or

the SBA’s application of the same.

884. In the event that K-Kel is unable to obtain a Second Draw PPP, it may
lack the staff, funds, and necessary PPE and facility upgrades to be able to continue

to operate given the local Pandemic-related capacity restrictions, which may well

result in the permanent ruination of its business; its inability to engage in protected
165

Case 2:21-cv-00447-LA Filed 04/07/21 Page 165 of 200 Document 1
First Amendment activities; and the inability of its staff, entertainers, and customers

to continue to engage in, associate for the purposes of engaging in, and/or view,
protected First Amendment activities.

All Plaintiffs

885. Camelot Banquet, Juneau, Midrad, PPH, Heritage, Vonch, East Coast,

Benelux, Filosadelfia, MAG Pitt, MAG Enterprises, 2740 Corporation, MAG
Entertainment, Oasis, BMC, BDS, DB, T and N, Millennium, Sinrock Alaska, Sinrock

Washington, Sinrock Oregon, Sinrock DT, Kimmico, Polmour, Sisyphian, 689 Eatery,

Syzygy, Brookhurst, Industry Venture, Farmdale, Expectations, Inland, Kentucky

Hospitality, LCM, Midnight, Nitelife, Olympic, Oxnard, Penn Ave, SJ, PNM, Rialto,
Rouge, Santa Barbara, Santa Maria, Saries, Worldwide, Consulting, Washington

Mgmt, WPB, and K-Kel are collectively referred to herein as “Plaintiffs.”

886. As more specifically alleged above, a number of the Plaintiffs, which
were otherwise eligible for Second Draw PPP loans but for the provisions of the

Regulation, the SOP, and the Incorporating Statute, had their Second Draw PPP

applications specifically denied by the SBA. Because of this, and for the other reasons

discussed above, the remaining Plaintiffs reasonably believe that their Second Draw
PPP applications will also be denied for the same reasons and/or delayed.

887. This is not the first time the SBA has been brought to court by entities

that present live constitutionally protected female performance dance entertainment

presented to the consenting adult public, for denying, delaying, or equivocating on
such entities’ PPP loan applications and/or the ability of such businesses to obtain

loan forgiveness as a result of the Regulation in the SOP.

888. In three of these such lawsuits, one taking place in the Eastern District
of Michigan in an action captioned as DV Diamond Club of Flint, LLC v. United

States Small Business Administration, another in this Court captioned as Camelot

Banquet Rooms, Inc. v. United States Small Business Administration, and the other
166

Case 2:21-cv-00447-LA Filed 04/07/21 Page 166 of 200 Document 1
in the Southern District of Texas in an action captioned as D. Houston Inc. v. United

States Small Bus. Admin., the plaintiffs in those actions (including, as referenced
above, a number of the Plaintiffs here) were successful in obtaining injunctions and/or

rulings prohibiting the SBA from utilizing the Regulation and SOP as eligibility

criteria for PPP loans. Specifically,

a. The Eastern District of Michigan’s injunction stated: “By 12:00
p.m. Eastern time on Thursday, May 14, 2020, the SBA shall notify the

identified lender representatives in writing that (a) the applications by

Plaintiffs and Intervenors for PPP loans shall not be denied based on the

‘prurient sexual nature’ provisions of the Original SBA Ineligibility Rule, the
2019 SOP, and/or the PPP Ineligibility Rule[.]” DV Diamond Club, 459 F. Supp.

3d 943, 965 (E.D. Mich. 2020). The court defined the phrase “Original SBA

Ineligibility Rule” as being “codified at 13 C.F.R. § 120.110,” id., at 947, and
defined the phrase “PPP Ineligibility Rule” as the SBA’s “rule excluding from

PPP loan guarantee eligibility a wide range of businesses . . . and sexually

oriented businesses that present entertainment or sell products of a ‘prurient’

(but not unlawful) nature[.]” Id. at 946. The SBA’s motion in the Sixth Circuit
to stay that injunction was denied. DV Diamond Club of Flint, LLC v. Small

Bus. Admin. (“DV Diamond”), 960 F.3d 743 (6th Cir. 2020);

b. This Court’s order stated:

The Administrator of the U.S. Small Business Administration and the
Secretary of the Treasury, as well as their employees, agents and
representatives, including the SBA’s lending banks, are preliminarily
enjoined from using 13 C.F.R. § 120.110(p) and the associated SBA
Standard Operating Procedure (SOP 50 10 5(K) § III.A.15) in making
eligibility determinations for loans under 15 U.S.C. § 636(a)(36).
By Monday, May 4, 2020, at 12:00 p.m., the Administrator of the U.S.
Small Business Administration and the Secretary of the Treasury shall
transmit guarantee authority to the plaintiffs’ lenders so that those
lenders may finish processing the plaintiffs’ applications for PPP loans
and immediately fund the loans.

167

Case 2:21-cv-00447-LA Filed 04/07/21 Page 167 of 200 Document 1
Camelot Banquet Rooms, Inc. v. U.S. Small Business Admin. (sometimes, “Camelot

Banquet Case”), 458 F. Supp. 3d 1044, 1065 (E.D. Wis. 2020) (emphasis in original);
and

c. In the Southern District of Texas, “exotic dance clubs” similar to

those of the Plaintiffs here, sought “loans under the Paycheck Protection

Program[.]” D. Houston Inc. v. United States Small Bus. Admin., No. CV H-
20-2308, 2020 WL 6268528, at *1 (S.D. Tex. Oct. 20, 2020). The D. Houston

court, similar to the DV Diamond court and this court, prohibited the SBA from

enforcing the Regulation against those plaintiffs as eligibility criteria for PPP

loans. Specifically, that court’s ruling stated:

The Court further ORDERS that Defendants notify approved lenders
participating in the Paycheck Protection Program to whom Plaintiffs
submitted loan applications on or before the August 8, 2020, deadline
they are to reevaluate D. Houston, Inc., A.H.D. Houston, Inc., D. WG
FM, Inc., D. Cam, LLC, W.L. York, Inc., and Westwood, Inc.'s
applications for loans without regard to 13 C.F.R. § 120.110 (p).
Notification to the lenders should be made within seven days of the
signing of this Order to avoid any delay in processing these loan
applications.

D. Houston Inc., 2020 WL 6268528, at *8.

889. Despite the three court orders referenced in the paragraphs

immediately above, the SBA is taking the position that those rulings do not apply to

the loan applications at issue in this action, irrespective of the fact that many of the

Plaintiffs here were also plaintiffs in the DV Diamond and Camelot Banquet Case
and are subject to the protections afforded by those courts, saying that those orders

applied only to First Draw PPP loans which are enabled by in Paragraph 36 of 15

U.S.C. § 636(a), whereas Second Draw PPP loans are enabled by Paragraph 37 of 15

U.S.C. § 636(a).
890. The rulings of the courts in DV Diamond, Camelot Banquet Case, and

D. Houston, make no reference as to which chapter or chapters of the SBA enabling

168

Case 2:21-cv-00447-LA Filed 04/07/21 Page 168 of 200 Document 1
act they apply. Rather, those orders prohibit the Regulation and the SOP being used

by the SBA as a basis to deny PPP loans.
891. Nowhere in the Regulation, the SOP, or any other documentation

promulgated by the SBA, is there any definition as to what the phrase “prurient

sexual nature,” as used in the Regulation and SOP, means.

892. In response to the three suits referenced above, the SBA and its
Administrator have attempted, when challenged by the various courts, to articulate

the meaning of the phrases “prurient sexual nature” or “live performances of a

prurient sexual nature” as found in the Regulation and the SOP.

893. In DV Diamond, at an April 30, 2020, hearing, the SBA took the position
that “prurient” meant “tending to arouse a ‘lustful’ or, you know ‘lascivious’ interest

in sex.” “The SBA’s interpretation of ‘prurient,’ simply refers to, you know, invoking

an avert [sic] strong sexual interest.” Transcript of Motion for TRO and/or
Preliminary Injunction, DV Diamond, 20-cv-10899 (E.D. Mich. Apr. 30, 2020), ECF

54, at 8:18-19; 58:5-6 (excerpt are attached hereto as Exhibit S and are hereby

incorporated by reference as though fully set forth herein).

894. Also in DV Diamond, at a later hearing, on May 5, 2020, the DV
Diamond court noted the SBA had changed its position as it had argued before this

Court that the term “prurient” meant “erotic.” Transcript of Continued Hearing for

Motion for TRO and/or Preliminary Injunction, DV Diamond, 20-cv-10899 (E.D. Mich.

May 12, 2020), ECF 55, at 41:18-25 - 42:1-13 (excerpts are attached hereto as Exhibit
T and are hereby incorporated by reference as though fully set forth herein). In

response to the court pointing out this inconsistency and also noting that such

operationalization would render the Regulation and SOP unconstitutionally
overbroad, the SBA retreated to its previous position that “prurient” means

“lascivious or lustful.” Id. at 42:14-25 – 43:1-7.

895. In the Camelot Banquet Case, the SBA took the position that:
169

Case 2:21-cv-00447-LA Filed 04/07/21 Page 169 of 200 Document 1
Businesses that feature live dancing explicitly intended to be “erotic”
undoubtedly falls within the plain language of the regulation.

* * *
The SBA has restricted government-backed small-business loans to
businesses engaged in live erotic performances for nearly twenty-five
years.

Government Motion for Emergency Stay, Camelot Banquet, 2:20-cv-00601 (E.D. Wis.
May 4, 2020), ECF 30, at pp. 4, 8 (excerpts are attached hereto as Exhibit U and are

hereby incorporated by reference as though fully set forth herein).

896. The SBA maintained, in its pleadings on appeal from the Camelot
Banquet Case to the Seventh Circuit, its position that the term “prurient” as it

appears in the Regulation and SOP means “erotic.” For example, the SBA stated:

The SBA’s restriction on providing Section 7(a) loans to businesses that
present live erotic performances dates back to 1996. See 61 Fed. Reg.
3226, 3240 (Jan. 31, 1996) (final rule); 60 Fed. Reg. 64356, 64360 (Dec.
15, 1995) (proposed rule).

* * *

Businesses that feature live dancing explicitly intended to be “erotic”
undoubtedly fall within the plain language of the regulation.
* * *

The SBA has restricted government-backed small-business loans to
businesses engaged in live erotic performances for nearly twenty-five
years.

Government’s Emergency Motion for Stay Pending Appeal, Camelot Banquet Rooms,
Inc. v. U.S. Small Business Admin., 20-1729 (7th Cir. May 4, 2020), ECF 4, at p. 4,

13, 17 (excerpts are attached as Exhibit V and are hereby incorporated by reference

as though fully set forth herein).
897. In its reply brief in the Seventh Circuit, the SBA took the following

position with regard to the meaning of the term “prurient” as used in the Regulation

and the SOP:
170

Case 2:21-cv-00447-LA Filed 04/07/21 Page 170 of 200 Document 1
Plaintiffs’ businesses— “Gentlemen’s Clubs” which present live nude
and semi-nude dance performances that are explicitly intended to be
erotic—thus fall within the heart of the regulation’s scope.
* * *

And although Congress explicitly lifted some of those restrictions in
creating the Paycheck Protection Program, Congress did not lift or alter
the SBA’s longstanding restriction on loans to businesses that present
live erotic performances.
* * *

The SBA could reasonably determine that, since Congress has expressly
barred it from providing financial assistance to businesses that provide
“obscene” products and services, the agency’s limited resources are best
directed to subsidizing businesses other than those that, although not
“obscene” in the legal sense, are nonetheless “sexually oriented” and
explicitly intended to be erotic.

Government’s Reply In Support of Its Motion for Stay Pending Appeal, Camelot

Banquet Rooms, Inc. v. U.S. Small Business Admin., 20-1729 (7th Cir. May 11, 2020),

ECF 14, at pp. 5, 7, 8 (excerpts are attached as Exhibit W and are hereby
incorporated by reference as though fully set forth herein).

898. In D. Houston, at the September 11, 2020, Preliminary Injunction

Hearing, the SBA specifically acknowledged, for the first time in these lawsuits, that
the term “prurient” is in fact vague:

THE COURT: Who's to determine what's a prurient interest? You know,
there's the famous, what is it, Potter Stewart opinion, you know, the
pornography opinion that came out, what, in the '50s? I think Stewart
was on the Court at that time. He said he can't define it but he knows it
when he sees it? Are we in an area like that?
MR. KINCHELOE [Assistant United States Attorney; Attorney for the
SBA]: It's vague, your Honor.

Transcript of Preliminary Injunction Hearing, D. Houston, 4:20-cv-02308 (S.D. Tex.

Sept. 11, 2020), ECF 27, at pp. 29:23-25 – 30:1-4 (clarification added) (excerpts are
attached as Exhibit X and are hereby incorporated by reference as though fully set

forth herein).

171

Case 2:21-cv-00447-LA Filed 04/07/21 Page 171 of 200 Document 1
899. The SBA is arbitrarily applying the Regulation, the SOP, and/or the

Incorporating Statute to prohibit some adult entertainment establishments from
receiving Second Draw PPP loans, when those same establishments received First

Draw PPP loans.

900. Placing some Plaintiffs’ Second Draw PPP applications on “hold” or

other similar status, or denying other Plaintiffs’ Second Draw PPP applications,
constitutes a final agency action for which there is no other adequate remedy in court.

901. Plaintiffs do not here identify, respectfully, the identities of the lending

banks at issue because of legitimate concerns that if they do so their relationships

with such financial institutions (which they use, and which are needed for, critical
banking requirements of the businesses, such as maintaining depository accounts,

acting as merchant accounts for debit and credit card transactions, issuing checks for

the payment of payroll and other business expenses, etc.) may be irrevocably severed.
Part of these concerns involve pressure that the SBA may place on such lending banks

as a result of their relationship with these Plaintiffs. For example, and only by way

of illustration, the Department of Justice (“DOJ”) and the Treasury Department have

a long-established antipathy towards businesses of Plaintiffs’ kind exemplified by
their adoption and application of a program known as “Operation Chokepoint” to

many “adult” businesses. Through Operation Chokepoint, which purportedly was

created as a way to address money laundering in “cash” businesses, the DOJ and the

Treasury Department have intentionally pressured banks to terminate, with little to
no notice, all of their accounts with “adult” businesses just because they are of an

“adult” nature, even though such accounts may have existed for years and even

decades without any evidence whatsoever, or even allegations, of any forms of money
laundering having occurred. The termination of such accounts (including payroll

accounts) as a result of Operation Chokepoint, again with little to no warning, has

occurred to many of the Plaintiffs here, leaving them unable to operate their
172

Case 2:21-cv-00447-LA Filed 04/07/21 Page 172 of 200 Document 1
businesses and requiring them to scurry to find alternative banking sources (which,

as a result of the pressure brought by the DOJ and the Treasury Department, are
becoming extremely scarce to “adult” businesses such as these Plaintiffs). If required

to do so by this Court, Plaintiffs will disclose the identities of the banks where they

applied for Second Draw PPP loans for in camera review.

902. Pursuant to the CARES Act and the 2021 Appropriations Act, if loan
proceeds are used for specific purposes, the loan can ultimately be forgiven by the

SBA. The purpose of such loan forgiveness is to assist small businesses in being able

to financially weather the significant drop in trade and income that is presumed to

result from the lasting impact of the Pandemic, even when the economy more fully
“reopens,” and to provide necessary funding for PPE and COVID-related repairs

and/or upgrades to keep employees, other workers, and patrons safe from the effects

of Covid-19.
903. As a result of the experiences of many of the Plaintiffs in the earlier

First Draw PPP lawsuits referenced above, the Plaintiffs understand that the SBA

has, in some instances where “adult” businesses have received PPP loans, indicated

that it would later apply the Regulation and the SOP as grounds to decline loan
forgiveness. Like all other affected businesses, the Plaintiffs need loan forgiveness in

order to be able to financially survive the continuing impact of the Pandemic even as

the economy begins to “reopen,” albeit in a limited capacity. As a result, Plaintiffs

require relief from this Honorable Court prohibiting the SBA from applying the
Regulation, the SOP, and the Incorporating Statute to Second Draw PPP loan

forgiveness.

904. By denying Plaintiffs access to the Second Draw PPP benefits, the SBA
is preventing Plaintiffs from receiving monies that can be used to, among other

things: Pay wages and other benefits to their employees; a rent to landlord’s; pay

interest to mortgage holders; pay utility bills; purchase PPE; facilitate the adaption
173

Case 2:21-cv-00447-LA Filed 04/07/21 Page 173 of 200 Document 1
of their businesses to comply with local, state, and federal Pandemic-related health

orders; upgrade their facilities’ filtration systems; and install physical barriers to
reduce COVID transmission—thus, placing Plaintiffs, their employees, the

entertainers who perform on their premises, and their patrons at greater risk to

COVID-19 than those entities which the SBA is not denying benefits under the

Second draw PPP.
905. Upon information and belief, the SBA has determined Plaintiffs’

businesses present live performances of a prurient sexual nature without having ever

visited Plaintiffs’ establishments or viewed the live performances at Plaintiffs’

establishments. Plaintiffs do not present live performances of a prurient sexual
nature on their premises. All of the performances on Plaintiffs’ premises appeal to

normal, healthy, sexual desires.

906. A national Preliminary and Permanent Injunction enjoining the
Defendants from utilizing the Regulation, the SOP, and/or the Incorporating Statute

as eligibility criteria for PPP, Second Draw PPP, and any future form of the Paycheck

Protection Program because it remains unknown how much longer this Pandemic will

last and if Congress will refund the PPP, the Second Draw PPP, or some type of future
PPP. Given their purposes, Plaintiffs should not have to continue to litigate to have

access to these Pandemic-related benefit programs; especially, considering NAICS 72

businesses have been some of the most hard-hit businesses in the nation by the

Pandemic and in the absence of a national injunction, Plaintiffs may lack the funds
to continue to litigate to receive the benefits available to them under these programs.

907. As set forth more fully below, the Regulation, the SOP, and the

Incorporating Statute are invalid and unenforceable for numerous and various
reasons under administrative law and the First and Fifth Amendments to the United

States Constitution. The Defendants’ position that the Regulation, the SOP, and the

Incorporating Statute are valid and may be enforced against these Plaintiffs here for
174

Case 2:21-cv-00447-LA Filed 04/07/21 Page 174 of 200 Document 1
Second Draw PPP loans is not substantially justified; thereby entitling the Plaintiffs

to an award of attorney fees pursuant to 28 USC § 2412.

COUNT I

THE REGULATION, SOP, AND INCORPORATING STATUTE VIOLATE
THE FIRST AMENDMENT

908. In raising their First Amendment challenges to the Regulation, the SOP,
and the Incorporating Statute here, Plaintiffs assert not only their own rights but

also the rights of their owners and employees, the entertainers who perform on their

premises, and the customers who have in the past frequented, and intend in the

future to frequent, Plaintiffs’ premises in order to be able to observe First Amendment
protected entertainment and otherwise engage in First Amendment-protected

activities.

909. The Regulation, the SOP, and the Incorporating Statute violate, and are
contrary to, the First Amendment to the United States Constitution, both on their

face and as applied by the SBA to Plaintiffs, for numerous and various reasons

including but not limited to the fact that:

a. They are impermissible viewpoint-based restrictions on speech
and expression that are not necessary to any compelling governmental interest

and are not sufficiently narrowly tailored;

b. They are impermissible content-based restrictions on speech and

expression that are not necessary to any compelling governmental interest and
are not sufficiently narrowly tailored;

c. They invidiously and impermissibly discriminate against

disfavored speech and expression;
d. They violate, as applied to the First Amendment, the doctrine of

unconstitutional conditions by conditioning the receipt of Second Draw PPP

loans upon the discontinuance of entertainment that the SBA opines,
175

Case 2:21-cv-00447-LA Filed 04/07/21 Page 175 of 200 Document 1
determines, or assumes without any analysis whatsoever, to be of a “prurient

sexual nature” (whatever that may mean);
e. They effectuate, in order to obtain second draw PPP loans, an

impermissible prior restraint on speech and expression;

f. Even if deemed to be content-neutral (which they cannot under

any existing precedent), they do not further any permissible and important
governmental interest;

g. They fail to conform to the constitutional standards regarding

obscenity;

h. They impermissibly single out, and are being applied to single
out, First Amendment-protected businesses for denial of Second Draw PPP

benefits without justification;

i. They are unconstitutionally vague on their face and as applied,
under the enhanced vagueness standards applied to laws that impact upon

speech and expression; and

j. They are impermissibly and substantially overbroad in relation

to their plain legitimate sweep.
910. As a direct and proximate result of the unconstitutional aspects of the

Regulation, the SOP, and the Incorporating Statute, as well as the Defendants’, and

their delegates’, application of them against Plaintiffs and Plaintiffs’ interests, all as

referenced above, Plaintiffs, as well as their owners and employees, the entertainers
who perform on Plaintiffs’ premises and the customers who frequent their

establishments, have suffered and will continue to suffer irreparable injuries,

including but not limited to financial ruin, business ruination, and the inability to
present, view, and/or engage in First Amendment-protected speech, expression, and

entertainment.

176

Case 2:21-cv-00447-LA Filed 04/07/21 Page 176 of 200 Document 1
911. Because of the First Amendment rights being infringed upon by

Defendants’ application of the Regulation, the SOP, and the Incorporating Statute,
all as referenced above, this Court has the authority to declare the rights and the

legality of actions of the various parties and should do so here.

912. Plaintiffs do not have adequate remedies at law because, among other

reasons, they cannot recover damages against the Defendants as a result of
governmental immunity. In addition, Plaintiffs have a reasonable likelihood of

success on the merits in regard to their claims asserted herein. Consequently, and

because of the irreparable harm that is being suffered by these Plaintiffs, and which

will continue to be suffered by these Plaintiffs if this Court does not grant preliminary
relief, Plaintiffs are entitled to a preliminary injunction in order to protect their

fundamental rights at issue here.

913. For the reasons set forth above, Plaintiffs are entitled to judicial review
with regard to the actions and inactions of the Defendants pursuant to 5 U.S.C. § 702.

COUNT II

THE REGULATION, SOP, AND INCORPORATING STATUTE VIOLATE
THE FIFTH AMENDMENT

914. Plaintiffs incorporate herein by reference each and every paragraph

above as though fully set forth herein.

915. The Regulation, the SOP, and the Incorporating Statute violate, and are

contrary to, the Fifth Amendment to the United States Constitution, both on their
face and as applied by the SBA to Plaintiffs, for numerous and various reasons

including but not limited to the fact that:

a. They treat establishments presenting certain forms of live
performance dance entertainment, such as Plaintiffs, differently from

establishments presenting other forms of entertainment or no entertainment

at all, for no compelling, important, or rational reason;
177

Case 2:21-cv-00447-LA Filed 04/07/21 Page 177 of 200 Document 1
b. They treat workers at establishments presenting certain forms of

live performance dance entertainment, such as Plaintiffs, unequally and
differently from workers at establishments presenting other forms of

entertainment or no entertainment at all, for no compelling, important, or

rational reason;

c. They violate the occupational liberty rights of the Plaintiffs, their
employees, and the entertainers who perform on their premises;

d. They violate the substantive and procedural Due Process rights

of the Plaintiffs, their employees, and the entertainers who perform on their

premises;
e. They treat, have been used to treat, and could continue to treat

in the future, similarly situated persons and businesses differently without

justification;
f. They treat First Amendment-protected businesses differently by,

for example, waiving the exclusion from eligibility to the Second Draw PPP for

faith-based organizations and certain lobbying organizations, while denying

Plaintiffs access to the Second Draw PPP benefits;
g. There being arbitrarily applied by the Defendants; and

h. They are impermissibly vague on their face and as applied to

these Plaintiffs.

916. As a direct and proximate result of the unconstitutional aspects of the
Regulation, the SOP, and the Incorporating Statute, as well as the Defendants’, and

their delegates’, application of them against Plaintiffs and Plaintiffs’ interests, all as

referenced above, Plaintiffs, as well as their owners and employees, the entertainers
who perform on Plaintiffs’ premises and the customers who frequent their

establishments, have suffered and will continue to suffer irreparable injuries,

including but not limited to financial ruin, business ruination, and the inability to
178

Case 2:21-cv-00447-LA Filed 04/07/21 Page 178 of 200 Document 1
present, view, and/or engage in First Amendment-protected speech, expression, and

entertainment.
917. Because of the Fifth Amendment rights being infringed upon by

Defendants’ application of the Regulation, the SOP, and the Incorporating Statute,

all as referenced above, this Court has the authority to declare the rights and the

legality of actions of the various parties and should do so here.
918. Plaintiffs do not have adequate remedies at law because, among other

reasons, they cannot recover damages against the Defendants as a result of

governmental immunity. In addition, Plaintiffs have a reasonable likelihood of

success on the merits in regard to their claims asserted herein. Consequently, and
because of the irreparable harm that is being suffered by these Plaintiffs, and which

will continue to be suffered by these Plaintiffs if this Court does not grant preliminary

relief, Plaintiffs are entitled to a preliminary injunction in order to protect their
fundamental rights at issue here.

919. For the reasons set forth above, Plaintiffs are entitled to judicial review

with regard to the actions and inactions of the Defendants pursuant to 5 U.S.C. § 702.

COUNT III
THE SBA’S INTERPRETATION(S) OF THE REGULATION, THE SOP, AND
THE INCORPORATING STATUTE ARE INVALID

920. Plaintiffs incorporate herein by reference each and every paragraph

above as though fully set forth herein.
921. The SBA or its Administrator’s defining of “prurient” as “lustful,”

“lascivious,” and/or “erotic” is not a legitimate or lawful exercise of the SBA’s or its

Administrator’s authority, and is otherwise invalid under the Administrative
Procedures Act, 5 U.S.C. § 551 et seq. and applicable law because, among other

reasons:

179

Case 2:21-cv-00447-LA Filed 04/07/21 Page 179 of 200 Document 1
a. As applied, the SBA’s construction of the term “prurient” is

inconsistent with its enabling act and the legal definition of “prurient” as
articulated by the United States Supreme Court;

b. As applied, the SBA’s construction of the term “prurient” is not a

reasonable interpretation of the term;

c. As applied, the SBA’s construction of the term “prurient” is
arbitrary, capricious, an abuse of discretion in light of, and is directly contrary

to, the SBA’s enabling act, and in particular 15 U.S.C. § 633(e);

d. As applied, the SBA’s construction of the term “prurient” would

render 15 U.S.C. § 633(e) of the SBA’s enabling act meaningless and of no
effect;

e. As applied, the SBA’s construction of the term “prurient” is not

supported by the Regulation’s findings because in promulgating the Regulation
the SBA specifically acknowledged the Miller v. California, 413 U.S. 15 (1983)

test of obscenity, with which the Regulation does not comply;

f. As applied, the SBA’s construction of the term “prurient” is not

supported by current constitutional standards of obscenity which, as
articulated by the United States Supreme Court, defines and operationalizes

“prurient” as a “shameful or morbid” and “unhealthy” interest in sex, as

opposed to “normal, healthy sexual desires”;

g. As applied, the SBA’s construction of the term “prurient” is not
supported by current constitutional standards of obscenity which, as

articulated by the United States Supreme Court, rejects “lustful” as satisfying

the constitutional standard for prurient appeal; and
h. The SBA’s construction of the term “prurient” is inconsistent with

Congress’s goals under the CARES Act and the 2021 Appropriations Act.

180

Case 2:21-cv-00447-LA Filed 04/07/21 Page 180 of 200 Document 1
922. Because the Regulation, the SOP, and the Incorporating Statute, are

inconsistent with the SBA enabling act, as well as the broad form of relief provided
by the CARES Act and the 2021 Appropriations Act, all as referenced above, this

Court has the authority to declare the rights and the legality of actions of the various

parties and should do so here.

923. Plaintiffs do not have adequate remedies at law because, among other
reasons, they cannot recover damages against the Defendants as a result of

governmental immunity. In addition, Plaintiffs have a reasonable likelihood of

success on the merits in regard to their claims asserted herein. Consequently, and

because of the irreparable harm that is being suffered by these Plaintiffs, and which
will continue to be suffered by these Plaintiffs if this Court does not grant preliminary

relief, Plaintiffs are entitled to a preliminary injunction in order to protect their

fundamental rights at issue here and enjoin the improper and unlawful actions of the
Defendants here.

924. For the reasons set forth above, Plaintiffs are entitled to judicial review

with regard to the actions and inactions of the Defendants pursuant to 5 U.S.C. § 702.

COUNT IV
OTHER INVALIDITY OF THE REGULATION

925. Plaintiffs incorporate herein by reference each and every paragraph

above as though fully set forth herein.
926. The Regulation is not a legitimate or lawful exercise of the SBA’s or its

Administrator’s rulemaking authority as applied to the Second Draw PPP, and is

otherwise invalid under the Administrative Procedure, 5 U.S.C. § 551 et seq. and

applicable law because, among other reasons:
a. It fails to serve any lawful or legitimate regulatory purpose for

the SBA or its Administrator as to the Second Draw PPP or otherwise;

181

Case 2:21-cv-00447-LA Filed 04/07/21 Page 181 of 200 Document 1
b. The SBA and/or its Administrator failed to make a sufficient

record or to otherwise articulate a satisfactory explanation as to why the
Regulation is a rational or reasonable response to a problem that the agency

was charged with solving under the CARES Act, the 2021 Appropriations Act,

and in particular the Second Draw PPP; and

c. The SBA and/or its Administrator failed to make a sufficient
record or otherwise examine relevant data to establish that the Regulation is

a rational or reasonable response to a problem that the agency was charged

with solving.

927. Because the Regulation, the SOP, and the Incorporating Statute, are
inconsistent with the SBA enabling act, as well as the broad form of relief provided

by the CARES Act and the 2021 Appropriations Act, all as referenced above, and

because they do not represent a rational and reasonable response to a problem that
the agency was charged with solving, this Court has the authority to declare the

rights and the legality of actions of the various parties and should do so here.

928. Plaintiffs do not have adequate remedies at law because, among other

reasons, they cannot recover damages against the Defendants as a result of
governmental immunity. In addition, Plaintiffs have a reasonable likelihood of

success on the merits in regard to their claims asserted herein. Consequently, and

because of the irreparable harm that is being suffered by these Plaintiffs, and which

will continue to be suffered by these Plaintiffs if this Court does not grant preliminary
relief, Plaintiffs are entitled to a preliminary injunction in order to protect their

fundamental rights at issue here.

929. For the reasons set forth above, Plaintiffs are entitled to judicial review
with regard to the actions and inactions of the Defendants pursuant to 5 U.S.C. § 702.

PRAYER FOR RELIEF

182

Case 2:21-cv-00447-LA Filed 04/07/21 Page 182 of 200 Document 1
A. Issue orders granting a national Preliminary and Permanent Injunction

enjoining the Defendants, as well as their employees, agents, and representatives,
including the SBA’s lending banks, from enforcing or utilizing in any fashion or

manner whatsoever, 13 C.F.R. § 120.110(p), SBA SOP 50 10 5(K), Ch. 2 (III)(15), and

15 U.S.C. § 636(37)(A)(iv)(III)(aa), in regard to loan applications and/or applications

for loan forgiveness made pursuant to the Paycheck Protection Program Second Draw
Loan program of the Consolidated Appropriations Act, 2021. As part of these orders,

Plaintiffs further request this Honorable Court to:

1) Order Defendants, as well as their employees, agents, and

representatives, to notify, as expeditiously as possible, all SBA lending
banks to immediately discontinue utilizing 13 C.F.R. § 120.110(p), SBA

SOP 50 10 5(K), Ch. 2(III)(A)(15), and/or 15 U.S.C. §

636(37)(A)(iv)(III)(aa) in their Second Draw Paycheck Protection
Program loan applications and in applications for loan forgiveness, and

as criteria for determining Second Draw Paycheck Protection Program

loan application eligibility and loan forgiveness, and to fully process all

Second Draw Paycheck Protection Program loan applications and loan
forgiveness applications without reference to such regulations,

procedures and statutes; and

2) Order the Defendants, as well as their employees, agents, and

representatives, including their lending banks, to grant Plaintiffs’
Second Draw Paycheck Protection Program loan applications and loan

forgiveness applications if they otherwise qualify for such loans and loan

forgiveness but for the provisions of 13 C.F.R. § 120.110(p), SBA SOP 50
10 5(K), Ch. 2(III)(A)(15), and/or 15 U.S.C. § 636(37)(A)(iv)(III)(aa);

B. Enter an award of attorneys’ fees and costs against the Defendants and

in favor of the Plaintiffs pursuant to 28 U.S.C. § 2412 and otherwise; and
183

Case 2:21-cv-00447-LA Filed 04/07/21 Page 183 of 200 Document 1
C. Enter such other and further relief as this Court may find to be just and

proper in these circumstances.

184

Case 2:21-cv-00447-LA Filed 04/07/21 Page 184 of 200 Document 1
Dated: April 7, 2021 Respectfully submitted,

/s/ Jeff Scott Olson /s/ Bradley J. Shafer
Jeff Scott Olson (WI 1016284) BRADLEY J. SHAFER (MI P36604)*
THE JEFF SCOTT OLSON Brad@BradShaferLaw.com
LAW FIRM, S.C. ZACHARY M. YOUNGSMA (MI
131 West Wilson St., Ste. 1200 P84148)*
Madison, WI 53703 Zack@BradShaferLaw.com
T: 608-283-6001 SHAFER & ASSOCIATES, P.C.
F: 608-283-0945 3800 Capital City Boulevard, Suite 2
Lansing, Michigan 48906
T: 517-886-6560
F: 517-886-6565

Local Counsel for All Plaintiffs Attorneys for All Plaintiffs

/s/ Jennifer M. Kinsley
Jennifer M. Kinsley (OH 71629)*
KINSLEY LAW OFFICE
P.O. Box 19478
Cincinnati, OH 45219
T: 513-708-2595
kinsleylawoffice@gmail.com

Co-Counsel for 689 Eatery Corp.

Peter E. Garrell (CA 155177)*
FORTIS, LLP
650 Town Ctr. Dr., Ste. 1530
Costa Mesa, CA 92626
T: 714-839-3800
F: 714-795-2995
pgarrell@fortislaw.com

Co-Counsel for Brookhurst Venture, LLC; City of Industry Hospitality Venture, Inc.;
Farmdale Hospitality Services, Inc.; High Expectations Hospitality, LLC; Inland
Restaurant Venture I, Inc.; Kentucky Hospitality Venture, LLC; L.C.M., LLC;
Midnight Sun Enterprises, Inc.; Nitelife, Inc.; Olympic Ave Venture, Inc.; The Oxnard
Hospitality Services, Inc.; Penn Ave Hospitality, LLC; Platinum SJ Enterprise; PNM
Enterprises, Inc.; Rialto Pockets, Inc.; Rouge Gentlemen’s Club, Inc.; Santa Barbra
Hospitality Services, Inc.; Santa Maria Restaurant Enterprises, Inc.; Saries Lounge,
LLC; Spearmint Rhino Companies Worldwide, Inc.; Spearmint Rhino Consulting
Worldwide, Inc.; Washington Management, LLC; W.P.B. Hospitality, LLC; and K-Kel,
Inc.

*Admission Request Forthcoming

185
Case 2:21-cv-00447-LA Filed 04/07/21 Page 185 of 200 Document 1
VERIFICATION OF COMPLAINT AS TO:
Camelot Banquet Rooms, Inc.; Downtown Juneau Investments, LLC;
Midrad, LLC; and PPH Properties I, LLC

1. I, Joe Modl, am an officer of Camelot Banquet Rooms, Inc. I am a

Managing Member of Downtown Juneau Investments, LLC; Midrad, LLC; and PPH

Properties I, LLC.

2. I make this verification upon my personal knowledge, unless specifically
stated to the contrary.

3. I have reviewed the foregoing PLAINTIFFS’ VERIFIED COMPLAINT

FOR INJUNCTIVE AND DECLARATORY RELIEF (the “Complaint”) in its entirety.

4. The factual statements in the Complaint, as they pertain to Camelot
Banquet Rooms, Inc.; Downtown Juneau Investments, LLC; Midrad, LLC; and PPH

Properties I, LLC, are true and accurate to the best of my information, knowledge

and belief.
5. Except, any matters stated to be upon “information and belief,” I verily

believe to be true.

I VERIFY UNDER PENALTY OF PERJURY THAT THE FOREGOING IS
TRUE AND CORRECT.
Executed on: Apr. 2, 2021 /s/ Joe Modl
By: Joe Modl

186
Case 2:21-cv-00447-LA Filed 04/07/21 Page 186 of 200 Document 1
VERIFICATION OF COMPLAINT AS TO:
Heritage Management Services, Inc.

1. I, David Sovey, am the Director of Operations of Heritage Management
Services, Inc.

2. I make this verification upon my personal knowledge, unless specifically

stated to the contrary.
3. I have reviewed the foregoing PLAINTIFFS’ VERIFIED COMPLAINT

FOR INJUNCTIVE AND DECLARATORY RELIEF (the “Complaint”) in its entirety.

4. The factual statements in the Complaint, as they pertain to Heritage

Management Services, Inc., are true and accurate to the best of my information,
knowledge and belief.

5. Except, any matters stated to be upon “information and belief,” I verily

believe to be true.

I VERIFY UNDER PENALTY OF PERJURY THAT THE FOREGOING IS
TRUE AND CORRECT.

Executed on: April 2, 2021 /s/ David Sovey
By: David Sovey

187
Case 2:21-cv-00447-LA Filed 04/07/21 Page 187 of 200 Document 1
VERIFICATION OF COMPLAINT AS TO:
Vonch, LLC

1. I, Stephen H. Dabrowski, am the Managing Member of Vonch, LLC.
2. I make this verification upon my personal knowledge, unless specifically

stated to the contrary.

3. I have reviewed the foregoing PLAINTIFFS’ VERIFIED COMPLAINT
FOR INJUNCTIVE AND DECLARATORY RELIEF (the “Complaint”) in its entirety.

4. The factual statements in the Complaint, as they pertain to Vonch LLC,

are true and accurate to the best of my information, knowledge and belief.

5. Except, any matters stated to be upon “information and belief,” I verily
believe to be true.

6. To be clear, I note that Vonch, LLC is the holder of the liquor license and

sole member of Polekatz Gentlemen’s Club, LLC, which directly operates the club.

Because Vonch, LLC applied for both the PPP and Second Draw PPP, it is believed
that Vonch, LLC is the proper Plaintiff in this suit.

I VERIFY UNDER PENALTY OF PERJURY THAT THE FOREGOING IS
TRUE AND CORRECT.

Executed on: Apr. 5, 2021 /s/ Stephen H. Dabrowski
By: Stephen H. Dabrowski

188
Case 2:21-cv-00447-LA Filed 04/07/21 Page 188 of 200 Document 1
VERIFICATION OF COMPLAINT AS TO:
East Coast Restaurant & Nightclubs, LLC

1. I, Matthew Rose, am an authorized member of East Coast Restaurant
& Nightclubs, LLC.

2. I make this verification upon my personal knowledge, unless specifically

stated to the contrary.
3. I have reviewed the foregoing PLAINTIFFS’ VERIFIED COMPLAINT

FOR INJUNCTIVE AND DECLARATORY RELIEF (the “Complaint”) in its entirety.

4. The factual statements in the Complaint, as they pertain to East Coast

Restaurant & Nightclubs, LLC, are true and accurate to the best of my information,
knowledge and belief.

5. Except, any matters stated to be upon “information and belief,” I verily

believe to be true.

I VERIFY UNDER PENALTY OF PERJURY THAT THE FOREGOING IS
TRUE AND CORRECT.

Executed on: Apr. 5, 2021 /s/ Matthew Rose
By: Matthew Rose

189
Case 2:21-cv-00447-LA Filed 04/07/21 Page 189 of 200 Document 1
VERIFICATION OF COMPLAINT AS TO:
Benelux Corporation

1. I, Athanases Stamatopoulos, am the President of Benelux Corporation.
2. I make this verification upon my personal knowledge, unless specifically

stated to the contrary.

3. I have reviewed the foregoing PLAINTIFFS’ VERIFIED COMPLAINT
FOR INJUNCTIVE AND DECLARATORY RELIEF (the “Complaint”) in its entirety.

4. The factual statements in the Complaint, as they pertain to Benelux

Corporation, are true and accurate to the best of my information, knowledge and

belief.
5. Except, any matters stated to be upon “information and belief,” I verily

believe to be true.

I VERIFY UNDER PENALTY OF PERJURY THAT THE FOREGOING IS
TRUE AND CORRECT.

Executed on: April 2, 2021 /s/ Anthanases Stamatopoulos
By: Anthanases Stamatopoulos

190
Case 2:21-cv-00447-LA Filed 04/07/21 Page 190 of 200 Document 1
VERIFICATION OF COMPLAINT AS TO:
Filosadelfia, LLC

1. I, Konstantine Drakopoulos, am an authorized member of Filosadelfia,
LLC.

2. I make this verification upon my personal knowledge, unless specifically

stated to the contrary.
3. I have reviewed the foregoing PLAINTIFFS’ VERIFIED COMPLAINT

FOR INJUNCTIVE AND DECLARATORY RELIEF (the “Complaint”) in its entirety.

4. The factual statements in the Complaint, as they pertain to Filosadelfia,

LLC, are true and accurate to the best of my information, knowledge and belief.
5. Except, any matters stated to be upon “information and belief,” I verily

believe to be true.

I VERIFY UNDER PENALTY OF PERJURY THAT THE FOREGOING IS
TRUE AND CORRECT.

Executed on: April 2, 2021 /s/ Konstantine Drakopoulos
By: Konstantine Drakopoulos

191
Case 2:21-cv-00447-LA Filed 04/07/21 Page 191 of 200 Document 1
VERIFICATION OF COMPLAINT AS TO:
MAG Pitt LP; MAG Enterprises Inc.; 2740 Corporation; MAG
Entertainment LLC; and Oasis On Essington LLC
1. I, John Meehan, am the President, Manager, or authorized Partner, as
appropriate, of MAG Pitt LP; MAG Enterprises Inc.; 2740 Corporation; MAG

Entertainment LLC; and Oasis On Essington LLC.

2. I make this verification upon my personal knowledge, unless specifically
stated to the contrary.

3. I have reviewed the foregoing PLAINTIFFS’ VERIFIED COMPLAINT

FOR INJUNCTIVE AND DECLARATORY RELIEF (the “Complaint”) in its entirety.

4. The factual statements in the Complaint, as they pertain to MAG Pitt
LP; MAG Enterprises Inc.; 2740 Corporation; MAG Entertainment LLC; and Oasis

On Essington LLC, are true and accurate to the best of my information, knowledge

and belief.

5. Except, any matters stated to be upon “information and belief,” I verily
believe to be true.

I VERIFY UNDER PENALTY OF PERJURY THAT THE FOREGOING IS
TRUE AND CORRECT.

Executed on: Apr. 2, 2021 /s/ John Meehan
By: John Meehan

192
Case 2:21-cv-00447-LA Filed 04/07/21 Page 192 of 200 Document 1
VERIFICATION OF COMPLAINT AS TO:
Burch Management Company, Inc.; BDS Restaurant, Inc.; DB
Entertainment, Inc.; T and N Inc.; and Millennium Restaurants Group, Inc.
1. I, Steve Craft, am the President of Burch Management Company, Inc.;
BDS Restaurant, Inc.; DB Entertainment, Inc.; T and N Inc.; and Millennium

Restaurants Group, Inc.

2. I make this verification upon my personal knowledge, unless specifically
stated to the contrary.

3. I have reviewed the foregoing PLAINTIFFS’ VERIFIED COMPLAINT

FOR INJUNCTIVE AND DECLARATORY RELIEF (the “Complaint”) in its entirety.

4. The factual statements in the Complaint, as they pertain to Burch
Management Company, Inc.; BDS Restaurant, Inc.; DB Entertainment, Inc.; T and

N Inc.; and Millennium Restaurants Group, Inc., are true and accurate to the best of

my information, knowledge and belief.

5. Except, any matters stated to be upon “information and belief,” I verily
believe to be true.

I VERIFY UNDER PENALTY OF PERJURY THAT THE FOREGOING IS
TRUE AND CORRECT.

Executed on: Apr. 4, 2021 /s/ Steve Craft
By: Steve Craft

193
Case 2:21-cv-00447-LA Filed 04/07/21 Page 193 of 200 Document 1
VERIFICATION OF COMPLAINT AS TO:
Club Sinrock, LLC (Alaska); Club Sinrock, LLC (Washington); Club
Sinrock, LLC (Oregon); and Club Sinrock DT, LLC

1. I, Tim Lyons, am the Managing Member of Club Sinrock, LLC (Alaska);

Club Sinrock, LLC (Washington); Club Sinrock, LLC (Oregon); and Club Sinrock DT,

LLC.

2. I make this verification upon my personal knowledge, unless specifically
stated to the contrary.

3. I have reviewed the foregoing PLAINTIFFS’ VERIFIED COMPLAINT

FOR INJUNCTIVE AND DECLARATORY RELIEF (the “Complaint”) in its entirety.

4. The factual statements in the Complaint, as they pertain to Club
Sinrock, LLC (Alaska); Club Sinrock, LLC (Washington); Club Sinrock, LLC

(Oregon); and Club Sinrock DT, LLC, are true and accurate to the best of my

information, knowledge and belief.
5. Except, any matters stated to be upon “information and belief,” I verily

believe to be true.

I VERIFY UNDER PENALTY OF PERJURY THAT THE FOREGOING IS
TRUE AND CORRECT.

Executed on: Apr. 3, 2021 /s/ Tim Lyons
By: Tim Lyons

194
Case 2:21-cv-00447-LA Filed 04/07/21 Page 194 of 200 Document 1
VERIFICATION OF COMPLAINT AS TO:
Kimmico, Inc.

1. I, Calvin Brockdorff, am the President of Kimmico, Inc.
2. I make this verification upon my personal knowledge, unless specifically

stated to the contrary.

3. I have reviewed the foregoing PLAINTIFFS’ VERIFIED COMPLAINT
FOR INJUNCTIVE AND DECLARATORY RELIEF (the “Complaint”) in its entirety.

4. The factual statements in the Complaint, as they pertain to Kimmico,

Inc., are true and accurate to the best of my information, knowledge and belief.

5. Except, any matters stated to be upon “information and belief,” I verily
believe to be true.

I VERIFY UNDER PENALTY OF PERJURY THAT THE FOREGOING IS
TRUE AND CORRECT.

Executed on: Apr. 4, 2021 /s/ Calvin Brockdorff
By: Calvin Brockdorff

195
Case 2:21-cv-00447-LA Filed 04/07/21 Page 195 of 200 Document 1
VERIFICATION OF COMPLAINT AS TO:
Polmour, Inc.

1. I, Lampros Moumouris, am the President of Polmour, Inc.
2. I make this verification upon my personal knowledge, unless specifically

stated to the contrary.

3. I have reviewed the foregoing PLAINTIFFS’ VERIFIED COMPLAINT
FOR INJUNCTIVE AND DECLARATORY RELIEF (the “Complaint”) in its entirety.

4. The factual statements in the Complaint, as they pertain to Polmour,

Inc., are true and accurate to the best of my information, knowledge and belief.

5. Except, any matters stated to be upon “information and belief,” I verily
believe to be true.

I VERIFY UNDER PENALTY OF PERJURY THAT THE FOREGOING IS
TRUE AND CORRECT.

Executed on: Apr. 6, 2021 /s/ Lampros Moumouris
By: Lampros Moumouris

196
Case 2:21-cv-00447-LA Filed 04/07/21 Page 196 of 200 Document 1
VERIFICATION OF COMPLAINT AS TO:
Sisyphian, LLC and Syzygy, LLC

1. I, Bradley Barnes, am the Managing Member of Sisyphian, LLC and
Syzygy, LLC.

2. I make this verification upon my personal knowledge, unless specifically

stated to the contrary.
3. I have reviewed the foregoing PLAINTIFFS’ VERIFIED COMPLAINT

FOR INJUNCTIVE AND DECLARATORY RELIEF (the “Complaint”) in its entirety.

4. The factual statements in the Complaint, as they pertain to Sisyphian,

LLC and Syzygy, LLC, are true and accurate to the best of my information, knowledge
and belief.

5. Except, any matters stated to be upon “information and belief,” I verily

believe to be true.

I VERIFY UNDER PENALTY OF PERJURY THAT THE FOREGOING IS
TRUE AND CORRECT.

Executed on: Apr. 3, 2021 /s/ Bradley Barnes
By: Bradley Barnes

197
Case 2:21-cv-00447-LA Filed 04/07/21 Page 197 of 200 Document 1
VERIFICATION OF COMPLAINT AS TO:
Brookhurst Venture, LLC; City of Industry Hospitality Venture, Inc.;
Farmdale Hospitality Services, Inc.; High Expectations Hospitality, LLC;
Inland Restaurant Venture I, Inc.; Kentucky Hospitality Venture, LLC;
L.C.M., LLC; Midnight Sun Enterprises, Inc.; Nitelife, Inc.; Olympic Ave
Venture, Inc.; The Oxnard Hospitality Services, Inc.; Penn Ave Hospitality,
LLC; Platinum SJ Enterprise; PNM Enterprises, Inc.; Rialto Pockets, Inc.;
Rouge Gentlemen’s Club, Inc.; Santa Barbra Hospitality Services, Inc.;
Santa Maria Restaurant Enterprises, Inc.; Saries Lounge, LLC; Spearmint
Rhino Companies Worldwide, Inc.; Spearmint Rhino Consulting Worldwide,
Inc.; Washington Management, LLC; and W.P.B. Hospitality, LLC
1. I, Kathy Vercher, am the President or Manager, as appropriate, of

Brookhurst Venture, LLC; City of Industry Hospitality Venture, Inc.; Farmdale

Hospitality Services, Inc.; High Expectations Hospitality, LLC; Inland Restaurant

Venture I, Inc.; Kentucky Hospitality Venture, LLC; L.C.M., LLC; Midnight Sun
Enterprises, Inc.; Nitelife, Inc.; Olympic Ave Venture, Inc.; The Oxnard Hospitality

Services, Inc.; Penn Ave Hospitality, LLC; Platinum SJ Enterprise; PNM

Enterprises, Inc.; Rialto Pockets, Inc.; Rouge Gentlemen’s Club, Inc.; Santa Barbra

Hospitality Services, Inc.; Santa Maria Restaurant Enterprises, Inc.; Saries Lounge,
LLC; Spearmint Rhino Companies Worldwide, Inc.; Spearmint Rhino Consulting

Worldwide, Inc.; Washington Management, LLC; and W.P.B. Hospitality, LLC

(collectively, the “Listed Entities”).
2. I make this verification upon my personal knowledge, unless specifically

stated to the contrary.

3. I have reviewed the foregoing PLAINTIFFS’ VERIFIED COMPLAINT

FOR INJUNCTIVE AND DECLARATORY RELIEF (the “Complaint”) in its entirety.
4. The factual statements in the Complaint, as they pertain to the Listed

Entities, are true and accurate to the best of my information, knowledge and belief.

\\
\\

198
Case 2:21-cv-00447-LA Filed 04/07/21 Page 198 of 200 Document 1
5. Except, any matters stated to be upon “information and belief,” I verily

believe to be true.

I VERIFY UNDER PENALTY OF PERJURY THAT THE FOREGOING IS
TRUE AND CORRECT.

Executed on: Apr. 5, 2021 /s/ Kathy Vercher
By: Kathy Vercher

199
Case 2:21-cv-00447-LA Filed 04/07/21 Page 199 of 200 Document 1
VERIFICATION OF COMPLAINT AS TO:
K-Kel, Inc.

1. I, Kevin M. Kelly, am the President of K-Kel, Inc.
2. I make this verification upon my personal knowledge, unless specifically

stated to the contrary.

3. I have reviewed the foregoing PLAINTIFFS’ VERIFIED COMPLAINT
FOR INJUNCTIVE AND DECLARATORY RELIEF (the “Complaint”) in its entirety.

4. The factual statements in the Complaint, as they pertain to K-Kel, Inc.,

are true and accurate to the best of my information, knowledge and belief.

5. Except, any matters stated to be upon “information and belief,” I verily
believe to be true.

I VERIFY UNDER PENALTY OF PERJURY THAT THE FOREGOING IS
TRUE AND CORRECT.

Executed on: Apr. 5, 2021 /s/ Kevin M. Kelly
By: Kevin M. Kelly

200
Case 2:21-cv-00447-LA Filed 04/07/21 Page 200 of 200 Document 1

File and source

File: 1-complaint.pdf
Size: 1,585,442 bytes
SHA-256: a14fd102ffd1a3f9fc3c84a5c18bfaecef78cadcf4f52054ec57bc664fab8575
Our copy: 1-complaint.pdf
Original: archive.org