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Preliminary Injunction

7th Circuit Court of Appeals

Case Name: Camelot Banquet Rooms, Inc., et al., v. United States Small Business Administration, et al.,

Case No.: 21-2589

Officials: KANNE, ROVNER, and HAMILTON, Circuit Judges.

Focus: Preliminary Injunction

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. See 15 U.S.C. § 636(a)(37)(A)(iv)(III)(aa), incorporating 13 C.F.R. § 120.110, with two exceptions.

Plaintiffs assert that their exclusion from the Program violates their constitutional rights, primarily under the Free Speech Clause of the First Amendment. The district court agreed. It 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 that incorporates 13 C.F.R. § 120.110. Camelot Banquet Rooms, Inc. v. U.S. Small Business Admin., — F. Supp. 3d —, 2021 WL 3680369 (E.D. Wis. Aug. 19, 2021). The SBA has appealed and seeks a stay of the injunction pending appeal. The district court denied a stay on August 31. Camelot Banquet Rooms, Inc. v. U.S. Small Business Admin., — F. Supp. 3d —, 2021 WL 3878977 (E.D. Wis. Aug. 31, 2021). Later that day we issued a temporary stay pending expedited briefing on the stay issue, which was completed on September 9.

We now grant the government’s stay of the preliminary injunction and expedite briefing on the merits of this appeal. The government’s merits brief shall be filed no later than September 29, 2021; plaintiffs shall file their brief no later than October 13, 2021; and the government shall file any reply brief no later than seven days after plaintiffs file their brief. The court will contact counsel to schedule oral argument promptly.

Injunction granted

Full Text

Derek A Hawkins is Corporate Counsel, at Salesforce.

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