NASHVILLE, Tenn. (AP) — A Tennessee city must pay $500,000 as part of a settlement with the American Civil Liberties Union and other groups over an ordinance designed to ban drag performances from taking place on public property, attorneys announced Wednesday.

Last year, the Tennessee Equality Project — a nonprofit that advocates for LGBTQ+ rights — filed a federal lawsuit after Murfreesboro leaders announced they would no longer be approving any event permit requests submitted by the organization. At the time, the city alleged that the drag performances that took place during TEP’s 2022 Pride event resulted in the “illegal sexualization of kids.”

TEP denied the shows were inappropriate, countering that the performers were fully clothed. However, the city not only vowed to deny TEP permits but also decided later to update its “community decency standards” intended to “assist in the determination of conduct, materials, and events that may be judged as obscene or harmful to minors.”

Murfreesboro is located about 34 miles (55 kilometers) south of Nashville.

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Eventually, a federal judge temporarily blocked Murfreesboro from enforcing the ordinance while the lawsuit proceeded.

On Wednesday, the ACLU announced the case had reached a settlement. Under the agreement, the city not only agreed to pay $500,000 but also to repeal the ordinance and process any upcoming event permit applications submitted by TEP.

“The government has no right to censor LGBTQ+ people and expression,” said attorneys for the ACLU, ACLU of Tennessee, Ballard Spahr, and Burr & Forman in a joint statement. “More important than the monetary recovery, this settlement sends a clear message that the city’s discrimination against the LGBTQ+ community was blatantly unconstitutional and that this type of behavior will no longer be tolerated here — or anywhere across the country.”

A spokesperson for the city of Murfreesboro didn’t immediately respond to an email for comment.

The legal challenge is the latest development in the ongoing political battle over LGBTQ+ rights inside Tennessee, where the state’s conservative leaders have sought to limit events where drag performers may appear, restrict classroom conversations about gender and sexuality, and ban gender-affirming care.