Paycheck Protection Program Exclusion of Nude Dancing Establishments Likely Constitutional
From Camelot Banquet Rooms, Inc. v. U.S. SBA, decided Wednesday by the Seventh Circuit, in a per curiam opinion by Judges Michael Kanne, Ilana Rovner & David Hamilton:
Plaintiffs in this case are about fifty businesses all over the country that offer live adult entertainment in the form of nude or nearly nude dancing. They seek to obtain loans under the second round of the Paycheck Protection Program enacted by Congress to address economic disruption caused by the Covid-19 pandemic. By statute, Congress excluded plaintiffs and several other categories of businesses from the second round of the Program.
Plaintiffs assert that their exclusion from the Program violates their constitutional rights, primarily under the Free Speech Clause of the First Amendment.
For one brief shining moment, the district court agreed, and “issued a preliminary injunction that enjoins the United States Small Business Administration (SBA) from denying plaintiffs eligibility for the loan program based on the statutory exclusion.” But the Seventh Circuit stayed the injunction pending appeal; though the matter still awaits a final decision, the question whether to grant the stay required the court to take a peek at the merits, and here’s what it wrote (in an opinion that’s quite consistent with a similar Second Circuit decision from March):
The problem with plaintiffs’ First Amendment claim and the preliminary injunction here is that Congress is not trying to regulate or suppress plaintiffs’ adult entertainment. It has simply chosen not to subsidize it. Such selective, categorical exclusions from a government subsidy do not offend the First Amendment.
The Supreme Court has repeatedly drawn a line between government regulation of speech, on one hand, and government subsidy of speech on the other. Its decisions show that the government is not required to subsidize activity simply because the activity is protected by the First Amendment….
[A] selective subsidy program may violate the First Amendment if it is “aim[ed] at the suppression of dangerous ideas.” To take an easy example, even if Congress can exclude lobbyists entirely from the Program’s subsidies, it could not choose to subsidize Democratic lobbyists while excluding Republicans. Plaintiffs’ theory here is that Congress chose to exclude their businesses from the subsidy program because it deemed their “ideas” about sexuality to be dangerous.
This theory does not seem to distinguish between government suppression of protected activity and denial of a subsidy. Plaintiffs’ theory seems to be that the denial of a subsidy
Article from Latest – Reason.com