Flint strip club at the forefront of federal lawsuit fighting for coronavirus small business bailout

By Jerilyn Jordan

Apr 13, 2020 at 1:58 pm

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Flint strip club at the forefront of federal lawsuit fighting for coronavirus small business bailout

Little Darlings Flint/Facebook

Last month, the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) was signed into law, which introduced the Paycheck Protection Program, a loan program fueled by $349 billion in funding to prevent job loss among small businesses, nonprofits, and other select organizations pertaining to veterans affairs and tribal businesses.

Among those businesses not protected? Sex workers and strip club employees. Per the disaster loan request form, applicants are required to “swear under penalty of perjury” that they do not “present live performances of a prurient sexual nature,” one of several exemptions enforced by the Small Business Adminisration relief effort.

A federal lawsuit filed April 8 claims the loan program's regulations “improperly and unconstitutionally limit benefits to businesses and workers unquestionably engaged in First Amendment protected expression.”

Jason Mohney, son of Harry Mohney — founder of Déjà Vu, AVN Lifetime Achievement Award recipient, head of Las Vegas' Erotic Heritage Museum, and self-proclaimed “porn king” — is spearheading the lawsuit.

“This is a nightmare,” Mohney told The Detroit News.

Mohney, who heads a national strip club company that includes Déjà Vu and Hustler chains throughout Michigan, Nevada, Louisiana, Illinois, Florida, Oklahoma, and California, filed the lawsuit, naming his Flint-based club Little Darlings as the suit's plaintiff, challenging defendants the U.S. Small Business Administration, SBA Administrator Jovita Carranza, and Treasury Secretary Steven Mnuchin.

According to the SBA, an eligible application “must be a business with less than 500 employees,” which would make Mohney's company eligible. Per the program, SBA will allow lenders to use the documentation provided by the borrower to determine that business's eligibility. Mohney applied for a loan last week, but he expects the request to get denied or delayed.

Gov. Gretchen Whitmer's three-week stay-at-home executive order forced nonessential businesses like strip clubs to close, while those deemed essential, like grocery stores, pharmacies, liquor stores, and marijuana dispensaries, were allowed to remain open as long as they complied with safety, social distancing, and sanitization conditions. Last week, Whitmer extended and expanded the original order, keeping Michiganders home and nonessential services closed through April 30.

Mohney told The News that “depression is setting in” among his employees, who are uncertain whether they'll be able to return to work after April 30, or if the business will have suffered an irreparable blow that could keep them from re-opening at all.

“People we work with are part of our team, our family, so you start off by telling your family members that they're out of a job and you're not sure when they will get their jobs back,” Mohney said. “You work all your life to build something up, and in the blink of an eye you're starting all over again.”