The Volokh Conspiracy

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Free Speech

Paycheck Protection Program Exclusion of Nude Dancing Establishments Upheld

The Second Circuit held that this was a permissible viewpoint-neutral restriction on a subsidy program.


The Paycheck Protection Program "authorize[s] the Small Business Administration … to
guarantee favorable loans to certain businesses affected by the COVID-19 pandemic," but the program excludes "businesses presenting 'live performances of a prurient sexual nature.'" Not a First Amendment violation, the Second Circuit held yesterday in Pharaohs GC, Inc. v. U.S. Small Business Administration (written by Judge Michael Park, joined by Judge Raymond Lohier and District Judge Jed Rakoff). Government subsidies, the court held, could include viewpoint-neutral restrictions on which First Amendment activities are subsidized, and the exclusion of "prurient" "live performances" is viewpoint-neutral:

The word "prurient" operates in the SBA's regulation to describe the subject matter—or content—of businesses excluded from SBA loans. Businesses that present live performances are excluded if the nature of those performances is prurient. The restriction does not describe a viewpoint; one could not have a prurient view of American policy in the Middle East or antitrust regulation, for example. Indeed, the Supreme Court has treated prurience as a content-based restriction, suggesting in dicta [in R.A.V. v. City of St. Paul (1992)] that "prurience and patent offensiveness are … permissible grounds on which to discriminate—and by implication, they do not constitute 'viewpoints.'"

Thanks to Prof. George Wright for the pointer.

UPDATE: Whoops; I erroneously wrote at first, "Government subsidies, the court held, could include viewpoint-based restrictions on which First Amendment activities are subsidized, and the exclusion of 'prurient' 'live performances' is viewpoint-neutral," which of course makes no sense; I meant to write, "could include viewpoint-neutral restrictions."  Thanks to Leo Marvin for pointing this out to me; I just fixed this.