20-2170-cv Pharaohs GC, Inc. v. United States Small Business Administration 1 2 United States Court of Appeals 3 for the Second Circuit 4 5 August Term, 2020 6 7 (Argued: November 3, 2020 Decided: March 4, 2021) 8 9 Docket No. 20-2170-cv 10 _____________________________________ 11 12 PHARAOHS GC, INC., 13 Plaintiff-Appellant, 14 v. 15 16 UNITED STATES SMALL BUSINESS ADMINISTRATION, TAMI PERRIELLO, 17 in her Official Capacity as Acting Administrator of the Small Business 18 Administration, UNITED STATES OF AMERICA, JANET YELLEN, in her 19 Official Capacity as United States Secretary of Treasury, 20 Defendants-Appellees. * 21 _____________________________________ 22 Before: 23 24 LOHIER and PARK, Circuit Judges, and RAKOFF, District Judge. † 25 26 In March 2020, Congress created the Paycheck Protection Program (“PPP” 27 or “Program”), which authorized the Small Business Administration (“SBA”) to * Under Fed. R. App. P. 43(c)(2), Tami Perriello is automatically substituted for Jovita Carranza in her official capacity as Acting Administrator of the Small Business Administrator and Janet Yellen is automatically substituted for Steve Mnuchin in her official capacity as Secretary of the Treasury. The Clerk of Court is respectfully directed to amend the caption of this matter accordingly. † Judge Jed S. Rakoff, United States District Judge for the Southern District of New York, sitting by designation. 1 guarantee favorable loans to certain businesses affected by the COVID-19 2 pandemic. The SBA promulgated regulations imposing several longstanding 3 eligibility requirements on PPP loan applicants, including that no SBA guarantee 4 would be given to businesses presenting “live performances of a prurient sexual 5 nature.” Pharaohs GC, Inc. (“Pharaohs”), a business featuring nude dancing, 6 sought a preliminary injunction directing the SBA to give it a PPP loan guarantee. 7 The United States District Court for the Western District of New York (Vilardo, J.) 8 denied the motion. On appeal, Pharaohs argues that the regulation violates the 9 Administrative Procedure Act and the First and Fifth Amendments to the U.S. 10 Constitution. We hold that the district court did not abuse its discretion in finding 11 that Pharaohs has failed to show that it is substantially likely to succeed on its 12 claims that (1) the SBA exceeded its statutory authority to promulgate eligibility 13 restrictions, and (2) the exclusion of nude-dancing establishments from the 14 Program violates the First or Fifth Amendments. We thus AFFIRM. 15 16 STEVEN M. COHEN (William A. Lorenz, Jr., on 17 the brief), Hogan Willig, PLLC, Amherst, 18 New York for Plaintiff-Appellant. 19 20 COURTNEY L. DIXON (James P. Kennedy, Jr., 21 Michael S. Raab, on the brief), for Jeffrey 22 Bossert Clark, Acting Assistant Attorney 23 General for Defendants-Appellees. 24 25 PARK, Circuit Judge: 26 In March 2020, Congress created the Paycheck Protection Program (“PPP” 27 or “Program”), which authorized the Small Business Administration (“SBA”) to 28 guarantee favorable loans to certain businesses affected by the COVID-19 29 pandemic. The SBA Administrator promulgated regulations imposing several 30 longstanding eligibility requirements on PPP loan applicants, including that no …
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