UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLUMBIA
FOLSOM STREET,
Plaintiff, Case No. 22-cv-926 (JMC)
v.
SMALL BUSINESS ADMINISTRATION,
et al.,
Defendants.
MEMORANDUM OPINION
During the COVID-19 pandemic, Folsom Street, a non-profit organization in San
Francisco, applied for a Shuttered Venue Operators Grant (SVOG) award from the Small Business
Administration (SBA).1 The SVOG program provided “emergency financial assistance to eligible
live entertainment businesses impacted by” the pandemic. ECF 1 ¶ 2. As part of its application,
Folsom Street submitted documentation indicating that the organization’s mission was to “create
world-class leather and fetish events that unite the adult alternative lifestyle communities with safe
venues for self expression and exciting entertainment.” ECF 52-2 at 22.
The SBA denied Folsom Street’s application for an SVOG award, citing, among other
grounds, a statutory prohibition banning the issuance of such awards to entities that “present[] live
performances of a prurient sexual nature” or derive material revenue from such performances.
15 U.S.C. § 9009a(a)(1)(B). Folsom Street filed this suit under the APA, challenging the denial of
the award as arbitrary and capricious, contrary to law, and unsupported by substantial evidence in
1
Folsom Street also named as a Defendant the then-Administrator of the SBA, Isabella Casillas Guzman. The Court will substitute the current Administrator Kelly Loeffler as a defendant pursuant to Federal Rule of Civil Procedure Rule 25(d) and collectively refer to both Defendants as the SBA throughout this opinion.
1
the record. ECF 21 ¶¶ 53–72. Because the SBA’s denial decision complied with the requirements
of § 9009a and the APA, the Court GRANTS the SBA’s cross-motion for summary judgment and
DENIES Folsom Street’s motion for summary judgment. ECF 33; ECF 31.2
I. BACKGROUND
Folsom Street is a San Francisco-based nonprofit whose mission is to “create world-class
leather and fetish events that unite the adult alternative lifestyle communities with safe venues for
self expression and exciting entertainment.” ECF 52-2 at 22. It hosts multiple in-person
“arts/entertainment and cultural events” that “support artists and performers [who] are often left
out of the mainstream.” Id. at 160–61. During the COVID-19 pandemic, Folsom Street was unable
to host these events, causing it to “los[e] nearly 83% of [its] gross revenue from 2019–2020.” Id.
at 160.
In April 2021, Folsom Street applied to the SBA for an SVOG award of over $500,000. Id.
at 1–2. In July 2021, Folsom Street allegedly learned (by viewing the SBA’s online portal) that its
application had been denied, with no explanation of the denial given. ECF 21 ¶ 24. So, in August
2021, Folsom Street submitted an administrative appeal of the denial. ECF 52-2 at 160–63. In its
appeal, Folsom Street argued that it met all the requirements to be eligible for an SVOG loan,
including the requirement that Folsom Street “not present live performances of a prurient sexual
nature.” Id. After the organization did not hear from the agency for eight months, Folsom Street
filed its initial complaint, asking the Court to compel the SBA to “issue a decision on Folsom
Street’s SVOG appeal as soon as possible.” ECF 1 at 7.
2
Unless otherwise indicated, the formatting of citations has been modified throughout this opinion, for example, by omitting internal quotation marks, emphases, citations, and alterations and by altering capitalization. All pincites to documents filed on the docket in this case are to the automatically generated ECF Page ID number that appears at the top of each page.
2
But the SBA ended up deciding the appeal before Court intervention. In June 2022, the
SBA issued a “final decision” once again denying the application. See ECF 52-2 at 19; ECF 10
¶ 3. The SBA allegedly communicated this denial to Folsom Street by providing it with a
“boilerplate form” which showed only that Folsom Street failed to satisfy the SBA’s “General
Eligibility Criterion 9” and “Promoter Eligibility Criteria 2 and 3.”3 ECF 21 ¶¶ 29–30. As relevant
here, “General Eligibility Criterion 9” is the prohibition on “live performances of a prurient sexual
nature,” which is derived from 15 U.S.C. § 9009a(a)(1)(B). See ECF 52-2 at 162.
Folsom Street then filed its first amended complaint, challenging the SBA’s denial as
arbitrary and capricious, contrary to law, and unsupported by substantial evidence. ECF 13.
Folsom Street alleged in part that the SBA’s denial was unlawful because the SBA failed to
“provide . . . reasoning for its decisions.” Id. ¶ 40; see also id. ¶¶ 40, 50 (alleging that the SBA
“provided only a form with conclusory statements” and that the SBA did not provide “[any]
evidence in the record” in support of the denial). The SBA quickly mooted that argument, however,
by issuing a letter which “further explain[ed] the rationale for [the] continued denial of Folsom
Street’s application.”4 ECF 52-2 at 175. The agency’s letter explained that, under the governing
statute, “SVOG awards cannot be issued to a person or entity that presents live performances of a
prurient sexual nature; or derives, directly or indirectly, more than de minimis gross revenue
through the sale of products or services, or the presentation of any depictions or displays, of a
prurient sexual nature.” Id. at 176 (quoting 15 U.S.C. § 9009a(a)(1)(B)). While the statute the
agency cited does not define “prurient,” see 15 U.S.C. § 9009a, the agency said that the statutory
definition of “prurient” is “characterized by arousing or appealing to sexual desires,” ECF 52-2 at
3
This denial is not included in the Parties’ Joint Appendix. See ECF 52-2.
4
See Concert Inv., LLC v. SBA, 100 F.4th 215, 220 (D.C. Cir. 2024) (“Where an agency’s prior explanation fails to fully explain its reasoning, the agency may offer a fuller explanation of its reasoning at the time of the agency action.”).
3
176. The agency also noted that it viewed the term “prurient interest” to “include nudity in specific
contexts,” particularly contexts where nudity is offered “to arouse or appeal to sexual desires.” Id.
The SBA reached this definition on two grounds. First, it said that its definition of
“prurient” is analogous to the dictionary definition of “prurient,” which is listed as “marked by or
arousing an immoderate or unwholesome interest or desire,” and “especially: marked by, arousing,
or appealing to sexual desire.” Id. (quoting Prurient, Merriam-Webster Dictionary,
https://www.merriam-webster.com/dictionary/prurient). And second, it said that the text of
§ 9009a is a mirror of the text from an SBA regulation, which suggests that Congress meant to
codify the SBA’s own definition of the word “prurient” (which, again, the SBA has “generally
viewed” to mean “characterized by arousing or appealing to sexual desires”). Id. (citing 13 C.F.R.
§ 120.110(p), and 60 Fed. Reg. 64356, 64360 (Dec. 15, 1995)).
The agency then applied its definition of “prurient” to Folsom Street’s activities to
determine whether Folsom Street “presents live performances of a prurient sexual nature.”
15 U.S.C. § 9009a(a)(1)(B)(i). The SBA determined that it did, and thus that it was ineligible for
an SVOG award. ECF 52-2 at 180. In reaching this conclusion, the SBA cited Folsom Street’s
representations that its primary activity is the operation of street fairs that aim to “create worldclass leather and fetish events that unite the adult alternative lifestyle communities with safe
venues for self expression and exciting entertainment.” Id. at 178. The SBA also looked at Folsom
Street’s mission as reported in its bylaws, which states that the organization is “committed to
cultivating a safe, open, and inclusive environment for the kink, leather, and alternative sexuality
communities.” Id. Further, the agency reviewed both Folsom Street’s marketing materials, which
“display several individuals in sexually suggestive clothing,” and event maps for Folsom Street
4
events, which included a “clothing and coat check” (such that the agency understood Folsom Street
events to “promote[,] or[] at least encourage, nudity”). Id.
The agency then looked at the Wikipedia page for the Folsom Street Fair (one of Folsom
Street’s flagship events). Id. That page described the festival as “the world’s largest leather event
and showcase for BDSM products and culture.”5 Id. It also showed photos of people at the event
in “suggestive clothing,” “fully naked,” and “simulat[ing] sexual acts.” Id. at 179. The agency also
saw similar images from social media, where patrons posted pictures or videos of “sex acts
occurring at the Folsom Street fair [with] onlookers watching.” Id.
The agency also looked at local news articles describing the event. Id. These public sources
reported that the fair featured attendees dressed in “latex, leather, rubber and other fetish clothing,”
as well as vendors selling goods ranging from “handmade leather whips to beautiful latex dresses.”
Id. These articles also highlighted an “erotic artists’ stage” at the fair, where performers
demonstrated “the full range of expression inherent in leather and BDSM.” Id.; see also id. (Folsom
Street Fair described as featuring “ample live BDSM demonstrations” and “showcas[es] [of] kinky
wares”). Based on these various sources, the SBA concluded that “Folsom’s events fall within
SBA’s definition of displays of a prurient sexual nature, including nudity intending to arouse or
appeal to sexual desires, and are therefore ineligible for an SVOG grant.” Id. at 180.
The agency had previously granted SVOG awards to at least ten other entities that were
allegedly “similarly situated” to Folsom Street, in that they promoted “LGBTQ2S+ festivals and
cultural events.” Id. Folsom Street pointed to these ten entities in its first amended complaint as
5
“BDSM is an overarching abbreviation of bondage and discipline, dominance and submission, and sadism and masochism and refers to a physical, psychological, and sexual role-play involving power exchange between consensual participants.” McNeil v. Duncan, No. 19-cv-694, 2020 WL 1536252, at *2 n.3 (D.D.C. Mar. 31, 2020) (quoting Nele De Neef et al., Bondage-Discipline, Dominance-Submission and Sadomasochism (BDSM) From an Integrative Biopsychosocial Perspective: A Systematic Review, 7 Sexual Medicine 129, 129 (2019)).
5
evidence that it was being arbitrarily singled out for grant denial. See ECF 13 ¶¶ 33–34. The SBA’s
final decision letter (issued after the first amended complaint was filed) examined these ten
comparators but ultimately concluded that all of them were “sufficiently distinguishable from
Folsom Street.” ECF 52-2 at 182. In particular, the SBA noted that it had been unable to discover
any evidence that the ten entities promoted events that featured “nudity with the intent to sexually
arouse patrons.” Id. 180–82. In the instances where these entities did promote “displays of sexually
provocative clothing or dancing,” the agency determined that such displays were “minimal,” “not
sufficiently related to the [entities’] principal business activity,” and, importantly, did not feature
full nudity. See id. at 182. The agency found—based on the evidence described above—that the
same was not true for Folsom Street. See id. (Folsom Street events were “distinguishable” from
other events because Folsom Street events featured “nudity . . . that is designed to arouse
patrons”). Accordingly, the SBA’s review of these allegedly similarly-situated entities “did not
change the SBA’s final decision as to Folsom Street’s eligibility.” Id.
After the agency issued the letter explaining its denial, Folsom Street filed the operative
complaint now at issue in this case. ECF 21. The SBA answered, ECF 23, and the Parties filed
motions for summary judgment. ECF 31; ECF 33.
II. LEGAL STANDARD
The Court will grant a motion for summary judgment only “if the movant shows that there
is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of
law.” Fed. R. Civ. P. 56(a). In evaluating a motion for summary judgment, “the evidence is to be
viewed in the light most favorable to the nonmoving party,” and “the court must draw all
reasonable inferences” in that party’s favor. Talavera v. Shah, 638 F.3d 303, 308 (D.C. Cir. 2011).
“When a party seeks review of agency action under the APA, the district judge sits as an appellate
6
tribunal.” Am. Bioscience, Inc. v. Thompson, 269 F.3d 1077, 1083 (D.C. Cir. 2001). In other words,
in an APA case, summary judgment “serves as the mechanism for deciding, as a matter of law,
whether the agency action is supported by the administrative record.” Alston v. Lew,
950 F. Supp. 2d 140, 143 (D.D.C. 2013).
“Under the [APA], a court may set aside an agency’s final decision only if it is arbitrary,
capricious, an abuse of discretion, or otherwise not in accordance with law.” Ams. for Safe Access
v. DEA, 706 F.3d 438, 449 (D.C. Cir. 2013) (citing 5 U.S.C. § 706(2)(A)). A court “will not disturb
the decision of an agency that has examined the relevant data and articulated a satisfactory
explanation for its action[,] including a rational connection between the facts found and the choice
made.” Id. That explanation need not be comprehensive; an agency must provide only a “brief
statement” to explain “why it chose to do what it did.” Amerijet Int’l, Inc. v. Pistole, 753 F.3d
1343, 1350 (D.C. Cir. 2014). And courts afford the agency’s explanation considerable deference:
A court will “uphold a decision of less than ideal clarity if the agency’s path may reasonably be
discerned.” Id. at 1351–52.
III. ANALYSIS
Under the relevant statute, the SBA may only issue SVOG awards to an “eligible person
or entity.” 15 U.S.C. § 9009a(a)(1). Congress excluded from the definition of “eligible person or
entity” any entity that “presents live performances of a prurient sexual nature” or “derives, directly
or indirectly, more than de minimis gross revenue” from activities “of a prurient sexual nature.”
Id. § 9009a(a)(1)(B). The SBA argues that its conclusion that Folsom Street was precluded from
receiving an award under that provision was lawful. ECF 34 at 17–24. The Court agrees.6
6
The SBA also denied the award on the basis of a separate provision, which says that operators of live events can only qualify for awards if they earn at least 70% of their revenue from “ticket sales, production fees or product reimbursements, nonprofit educational initiatives, or the sale of event beverages, food, or merchandise.” 15 U.S.C.
7
A. The SBA’s Interpretation of “Prurient” Was Not Contrary to Law.
A Court must set aside an agency’s decision if the decision was contrary to law. See
5 U.S.C. § 706(2)(A). Folsom Street argues that the SBA’s denial was contrary to law because the
SBA incorrectly interpreted the meaning of the word “prurient” within § 9009a. ECF 31 at 18–19.
While the SBA defined “prurient” by referring to the Merriam-Webster dictionary, see ECF 52-2
at 176, Folsom Street says that the SBA should have instead looked to Supreme Court case law,
ECF 31 at 18. That matters, Folsom Street says, because under the Merriam-Webster definition
the SBA used, the word “prurient” means “marked by or arousing an immoderate or unwholesome
interest or desire,” and “especially: marked by, arousing, or appealing to sexual desire.” ECF 52-2
at 176 (quoting Prurient, Merriam-Webster Dictionary, https://www.merriam-webster.com/
dictionary/prurient). By contrast, the definition Folsom Street derives from Supreme Court case
law is something that appeals to a “shameful or morbid interest in sex.” ECF 31 at 18 (citing Roth
v. United States, 354 U.S. 476, 487 n.20 (1957)). Folsom Street argues that because the latter
definition only covers “activity that is negative in nature,” Folsom Street’s activities would not be
“prurient” under that meaning, because all of Folsom Street’s activities are “sex positive.” Id.
The Court does not defer to an agency’s interpretation of a statute. Loper Bright Enters. v.
Raimondo, 603 U.S. 369, 412 (2024). But all the same, the Court finds that the SBA’s
interpretation is closer to the correct one.
First, the SBA’s decision to interpret “prurient” by reference to a contemporaneous
dictionary definition is a method of statutory interpretation long recognized by courts. The
Supreme Court has directed courts to look to an undefined term’s “ordinary, contemporary,
§ 9009a(a)(3)(A)(i)(II). The parties dispute whether the SBA’s conclusion on that front was correct. See ECF 31 at 15–18; ECF 34 at 13–17. Regardless, the Court need not consider that issue, because the denial on prurience grounds is dispositive. See 15 U.S.C. § 9009a(a)(1)(B).
8
common meaning” at the time when Congress enacted the statute, and “contemporary dictionaries”
are a key way to get at that meaning. Food Mktg. Inst. v. Argus Leader Media, 588 U.S. 427,
433–34 (2019); see also Sandifer v. U.S. Steel Corp., 571 U.S. 220, 227–28 (2014). Here,
§ 9009a(a)(1)(B) was enacted in December 2020. Pub. L. No. 116-260, § 324, 134 Stat. 1182,
2025 (2020). The agency states that it consulted the definition of prurient in 2021 via a respected
dictionary. See ECF 50 at 8 (explaining that the SBA applied the “2021 Merriam Webster
dictionary definition of ‘prurient’”); ECF 52-2 at 176 (quoting Prurient, Merriam-Webster
Dictionary, https://www.merriam-webster.com/dictionary/prurient). That is a valid approach to
interpretation that all courts, including this Court, routinely use.7 Folsom Street has offered no
argument as to why it should not apply here.8
Second, the Court finds independently persuasive the argument that in enacting
§ 9009a(a)(1)(B), Congress sought to codify the SBA’s own understanding of “prurient.” See
ECF 34 at 19–20. At the time Congress enacted § 9009a(a)(1)(B), the SBA had, for more than two
decades, disallowed the issuance of certain loans to businesses that engaged in prurient sexual
activities. See Business Loan Programs, 60 Fed. Reg. 64356, 64359 (Dec. 15, 1995). And when
Congress enacted § 9009a(a)(1)(B), it used text that mirrors the language from that regulation. See
13 C.F.R. § 120.110(p). It is a canon of interpretation that when “Congress adopts a new law
7
See, e.g., Le v. U.S. Citizenship & Immigr. Servs., No. 21-cv-501, 2025 WL 1743942, at *8 (D.D.C. June 24, 2025). 8
Folsom Street argues in reply that the SBA relied on an “incomplete” definition from the Merriam-Webster dictionary. ECF 35 at 9. It suggests that because the dictionary describes prurient as “immoderate” or “unwholesome,” and the Merriam-Webster thesaurus separately describes immoderate as “going beyond a normal or acceptable limit in degree or amount” and unwholesome as “bad for the well-being of the body,” the SBA’s definition of “prurient” must necessarily incorporate those separate (more negative) meanings. Id. (citing thesaurus). But these cherry-picked definitions do not help. The dictionary definition of “immoderate,” for instance, is “exceeding just, usual, or suitable bounds.” See Immoderate, Merriam-Webster Dictionary, https://www.merriam-webster.com/dictionary/immoderate. The agency could certainly have properly decided that a street fair featuring significant nudity, fetish wear, and the simulation of sexual acts “exceed[ed]” the “usual bounds” of arousing sexual desire in a public performance. Additionally, Folsom Street cites no authority for the proposition that an agency or court is not only required to consider the definition of words in a statute, but also the definition of words within the definition, in order to properly interpret the law.
9
incorporating sections of a prior law, Congress normally can be presumed to have had knowledge
of the interpretation given to the incorporated law, at least insofar as it affects the new statute.”
Lorillard v. Pons, 434 U.S. 575, 580–81 (1978). Thus, there is a presumption that when Congress
enacted § 9009a(a)(1)(B) by using text from an SBA regulation, Congress intended the meaning
of “prurient” within the statute to have the same meaning that the SBA afforded “prurient” under
the regulation. See Sokol World Ent., Inc. v. SBA, No. 21-cv-2385, 2025 WL 870323, at *8 (D.D.C.
Mar. 20, 2025) (“Congress expressly incorporated the precise terms of SBA’s regulations
governing its other financial assistance programs when passing the SVOG statute.”). That matters
because the SBA has long interpreted “prurient” in the context of its § 120.110(p) regulation to be
something distinct from obscenity. See Business Loan Programs, 60 Fed. Reg. 64356, 64360 (Dec.
15, 1995) (proposed rule saying that SBA has authority to exclude from grants activities that are
“obscene, pornographic, or prurient” (emphasis added)). That contrasts with Folsom Street’s
preferred definition, which overlaps to some extent with “obscene.” See ECF 35 at 8–9; see also
Roth v. United States, 354 U.S. 476, 487 (1957). And in any case, the Court finds no basis in the
statutory history to conclude that “prurient” must equate with a “shameful or morbid interest in
sex.” Contra ECF 31 at 18. There is therefore no reason to not apply the dictionary definition in
this case.
And third, there is no reason that the SBA should have used a definition of “prurient” from
Roth, because that case concerned the interpretation of the phrase “obscene material” within the
context of a criminal statute. Roth, 354 U.S. at 487. The Court in that case gave dictionary
definitions of the word “prurient” in a footnote only after it had used the word “prurient” within
its definition of “obscene material.” Id. at 487 n.20. This Court does not believe that the inclusion
of that twentieth footnote suggests that the Supreme Court intended to put the legal meaning of
10
“prurient” in amber, such that the same definition would apply to a different statute enacted more
than half a century later.
In any case, the SBA could reasonably have decided that Folsom Street’s activities fall
under the Supreme Court’s definition of “prurient” from Roth, such that the agency’s non-use of
the Supreme Court definition would be harmless error at most. The definition of prurient that
Folsom Street derives from the Roth footnote is “appeal[ing] to a shameful or morbid interest in
sex.” ECF 31 at 18 (citing Roth, 354 U.S. at 487 n.20). But that particular language comes not
from the Roth court’s definition of “prurient,” but from the Model Penal Code’s definition of
“obscene,” a definition which the Supreme Court referenced only obliquely. See Roth, 354 U.S. at
487 n.20. Indeed, if Folsom Street wanted to use the definition of “prurient” that the Supreme
Court actually incorporated into its opinion, it could have used the dictionary definitions included
in footnote twenty. Id. Those definitions describe “prurient” as:
Itching; longing; uneasy with desire or longing; of persons, having
itching, morbid, or lascivious longings; of desire, curiosity, or
propensity, lewd;
And “pruriency” as:
[The] [q]uality of being prurient; lascivious desire or thought.
Id. (quoting Webster’s New International Dictionary (Unabridged, 2d ed., 1949)). Folsom Street’s
fairs, which feature (among other things) “erotic” BDSM performances, certainly could spark
“desire or longing,” or cause patrons to feel “lewd” “curiosit[ies].” See id. Folsom Street thus has
offered no authority that “sex positive” events cannot also be “prurient.”
Folsom Street argues against this conclusion by pointing to Camelot Banquet Rooms, Inc.
v. SBA, 458 F. Supp. 3d 1044, 1055 (E.D. Wis. 2020). According to Folsom Street, that case “cited
to the Roth definition of prurient in a decision challenging the SBA’s denial” of an award, and
therefore “recogniz[ed] that the [Roth] definition is applicable to civil litigation generally and to
11
the SBA’s regulations governing . . . pandemic relief program[s].” ECF 35 at 10. But the Camelot
Banquet court recognized no such thing. Instead, that court merely found that the government had
failed to “respond to the plaintiffs’ contention that, to be prurient, a work or performance must
appeal to a shameful, morbid, and unhealthy interest in sex.” 458 F. Supp. 3d at 1055 (emphasis
added). The court did not endorse that “conten[ded]” definition of “prurient”; instead, it found that
the plaintiffs were likely to succeed on the merits of their claims only because “the government
ha[d] not developed an [opposing] argument” in its briefing. Id. Indeed, when that same court later
considered the issue after it had been fully briefed, it endorsed the Merriam-Webster definition of
“prurient” and specifically rejected the argument that Folsom Street raises here. See Camelot
Banquet Rooms, Inc. v. SBA, 555 F. Supp. 3d 598, 606, 606 n.4 (E.D. Wis. 2021), vacated and
remanded on other grounds, 24 F.4th 640 (7th Cir. 2022).
The Court thus ultimately agrees with the SBA that for an activity to be “prurient” under
the statute, the activity need not relate to a “shameful or morbid and unhealthy interest in sex.”
Instead, the agency can “understand[] prurient in a colloquial sense akin to lascivious, lustful, or
erotic.” ECF 34 at 21. Even looking to the case law that Folsom Street cites, the Court finds no
support for its overly narrow interpretation of the word. The SBA’s denial of the Folsom Street
award was thus not contrary to law.
B. The SBA’s Finding that Folsom Street Engaged in “Prurient” Activities Was Not
Arbitrary and Capricious, and Was Supported by Substantial Evidence.
A court must also set aside an agency decision if the decision is “arbitrary” or “capricious,”
or “unsupported by substantial evidence.” 5 U.S.C. § 706(2)(A), (E). “Whether a court is viewing
an agency decision through the lens of arbitrary-and-capricious action or evaluating it per the
substantial-evidence test, a great deal of deference is afforded to the agency’s findings and
conclusions.” Pac. Ranger, LLC v. Pritzker, 211 F. Supp. 3d 196, 211 (D.D.C. 2016).
12
Folsom Street contends that the SBA’s denial was arbitrary, capricious, or unsupported by
substantial evidence because the SBA “base[d] [its] conclusion on isolated instances of activity
that are not sanctioned by Folsom Street and that are contrary to Folsom Street’s stated policies
and practices.” ECF 31 at 20–21. For instance, while the SBA concluded that Folsom Street fairs
were based around “public displays of sexual nature,” “widespread nudity,” and actual live sexual
acts, ECF 31 at 21 (quoting ECF 52-2 at 180), Folsom Street says that the opposite is true, because
it actually ejects patrons for engaging in lewd activity, id. Folsom Street thus asserts that the SBA’s
decision was based not on information relating to Folsom Street itself, but on “reports of
unsanctioned activity, [including] simulated sexual acts” that were undertaken by a few out-ofline attendees. Id.
The Court finds, however, that the SBA based its decision on substantial evidence related
to Folsom Street’s own activities, not just the potentially unsanctioned activity of its attendees.
First, the SBA’s decision letter cited Folsom Street’s mission, as listed on its tax return, of
“creat[ing] world-class leather and fetish events that unite the adult alternative lifestyle
communities with safe venues for self expression and exciting entertainment.” ECF 52-2 at 178.
The SBA then considered Folsom Street’s bylaws, which state that it is “committed to cultivating
a safe, open, and inclusive environment for the kink, leather, and alternative sexuality
communities” and is “dedicated to sexual liberation and the right to pleasure as a crucial part of
the whole liberation movement.” Id.
The SBA also looked at the official posters and flyers Folsom Street created to promote its
events, including materials featuring performers in “sexually suggestive clothing” and event maps
featuring a “clothing and coat check” section. Id. In the Court’s view, these promotional materials
certainly aimed to attract interest for Folsom Street events through depictions of sexually prurient
13
content. For example, a flyer for the Folsom Street Fair that was included in the administrative
record contains images of (1) a female comedian topless with someone else’s hands covering her
breasts, (2) performers dressed in bondage, leather, and other fetish wear, and (3) performers
posing in sexually suggestive positions. ECF 52-2 at 168. One male performer’s photo is of his
nude torso and body with a large “X” over his crotch, while other images appear to feature gag
balls or the simulation of oral sex. See id. To reiterate, these are not images of random attendees
at the events; they are images chosen by Folsom Street and its performers to represent the
organization itself. That record evidence suffices to uphold the agency’s denial. See Sokol World,
2025 WL 870323, at *4 (where business’s social media pages “contain[ed] numerous suggestive
images depicting male go-go dancers in seemingly sexualized poses typically wearing only
revealing thong underwear or jockey shorts,” the SBA’s decision to deny an SVOG award “was
not arbitrary and capricious” and was “support[ed]” by “record evidence”). Despite Folsom
Street’s arguments to the contrary, there is more than enough on this record for the Court to find
that the SBA’s finding of prurience is well-explained and based on substantial evidence.9
C. The SBA Did Not Arbitrarily Treat Folsom Street Differently from Similarly Situated
Entities.
Lastly, a court should set aside an agency’s decision as arbitrary and capricious if the
agency treats the subject of the decision differently from how it treats other regulated entities. See
Kreis v. Sec’y of Air Force, 406 F.3d 684, 687 (D.C. Cir. 2005); MomoCon, LLC v. SBA, No.
21-cv-2386, 2022 WL 22940750, at *6 (D.D.C. Feb. 10, 2022). Folsom Street argues that because
the SBA awarded SVOG funds to other “organizations that put on LGBTQ+ oriented live
9
Because the Court concludes that the agency’s decision was supported by evidence that was itself created by Folsom Street, the Court need not weigh in on whether it was proper for the agency to consider evidence that originated from third parties, such as news articles or social media posts depicting “unsanctioned activity.” Contra ECF 31 at 18.
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performances, festivals, and cultural events,” the SBA’s different decision in this case should be
set aside. ECF 31 at 19. The Court again disagrees.
Folsom Street is correct that the SBA has previously awarded SVOG grants to certain
organizations that promote festivals, including some festivals that “celebrate and embrace sexually
progressive lifestyles” and cater to “leather and kink” communities. ECF 31 at 19. Indeed, the
SBA identified these previous awardees in its denial letter. ECF 52-2 at 180–82. The SBA further
acknowledged in that letter that at least some of those previous awardees had events that featured
“adult retail, fetish demonstrations, and exotic dancers,” or similar programming. Id. at 180.
The problem for Folsom Street, however, is that the SBA went on to distinguish each of
those ten organizations on the grounds that none of them promoted events featuring “nudity with
the intent to sexually arouse patrons,” at least according to the evidence the agency was able to
discover. Id. at 180–82. The agency concluded that Folsom Street, by contrast, did. Id. at 182. And
from the Court’s review of the record (and even just the parts of the record that came from Folsom
Street directly rather than third parties), the Court cannot say that such a factual conclusion was
unsupported or unreasonable. The Court therefore declines to disturb that finding. See Archer W.
Contractors, LLC v. U.S. Dep’t of Transp., 45 F.4th 1, 6 (D.C. Cir. 2022) (“An agency’s conclusion
may be supported by substantial evidence even though a plausible alternative interpretation of the
evidence would support a contrary view.”).
Lastly, while Folsom Street might believe that it is arbitrary to distinguish prurient events
from non-prurient ones based on whether the event features “nudity with the intent to sexually
arouse patrons,” that line is not so improperly demarcated that the Court would refuse to defer to
it. Indeed, “the line had to be drawn somewhere,” and Folsom Street has “fail[ed] to show that the
[agency’s] decision to draw it [where it did] was in any way arbitrary or capricious.” Process Gas
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Consumers Grp. v. Fed. Energy Regul. Comm’n, 712 F.2d 483, 487 (D.C. Cir. 1983). On arbitrary
and capricious review, “a court may not substitute its judgment for that of the agency.” Ohio v.
EPA, 603 U.S. 279, 292 (2024). The agency’s burden on this posture was to “articulate the
reasoning behind its decision with sufficient clarity to enable . . . this Court to understand the basis
for its decision.” Snohomish Cnty. v. Surface Transp. Bd., 954 F.3d 290, 301 (D.C. Cir. 2020). The
SBA has done as much, and whether the Court would draw a different line or not, there is no
compelling reason presented to not defer to the agency’s decision here.
* * *
For the foregoing reasons, the SBA’s cross-motion for summary judgment, ECF 33, is
GRANTED, and Folsom Street’s motion for summary judgment, ECF 31, is DENIED. A separate
order accompanies this memorandum opinion.
SO ORDERED.
JIA M. COBB
United States District Judge
Date: September 26, 2026
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