A Japanese court dismissed Thursday a damages lawsuit arguing the government's blanket exclusion of the sex industry from a cash handout program for pandemic-hit small companies violates the right to equality guaranteed under the Constitution.

In the lawsuit filed with the Tokyo District Court in September, 2020, a woman running a sex worker-dispatching business in western Japan demanded the payment of the benefits, as well as money totaling 4.46 million yen ($33,000) for having been discriminated against "without reasonable grounds."

But the court ruled that the government relief measure "does not constitute discrimination without reasonable grounds."

Plaintiffs' lawyers hold signs, including one showing "unjust ruling," in front of the Tokyo District Court on June 30, 2022, after a ruling on a damages claim by a sex business firm over a coronavirus cash handout snub. (Kyodo)

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In the suit, the government argued that "the sex industry is inherently unhealthy," and that was difficult to gain an understanding of why the industry should be eligible for the program.

As part of the financial assistance to smaller businesses suffering from plunging revenues due to the spread of the virus, the government provides a maximum of 2 million yen in a one-off lump sum. It also offers benefits to help them pay rent.

However, the scheme does not cover businesses in the sex industry, such as companies dispatching sex workers and operators of "love hotels" or accommodations for sexual activities.

Individual staff members, however, are considered sole proprietors who have a contract with operators and are eligible for the program.