Hotel franchise not liable to victims of sex trafficking for conduct that took place at hotels

Four Plaintiffs identified in their lawsuit as Jane Does filed a lawsuit under the Trafficking Victims Protection Reauthorization Act (TVPRA) alleging they were victims of conspicuous and open sex trafficking that occurred at hotels managed by hotel franchisors Wyndham Hotels & Resorts, Choice Hotels International, and Microtel Inn & Suites (MISF).  The Plaintiffs argued the franchises should be liable under the TVPRA for benefiting financially in a venture which they knew or should have known involved sex trafficking at the Defendants’ hotels.   Two of these companies, Wyndham and MISF, are franchisors that license its brand to the Microtel Inn & Suites in Atlanta, Georgia.  Choice Hotels International is a franchisor that licenses its brand to the Suburban Extended Stay in Chamblee, Georgia.

According to the allegations in this federal civil complaint, these two hotels accommodate, facilitate, and participate in the sex trafficking of women and children in Atlanta including the sex trafficking which victimized the Jane Does.  It alleged the Does were forced to engage in commercial sex acts at these hotels by various sex traffickers and that the money these traffickers made from those ventures was used to pay for their hotel rooms and other services in furtherance of the sex trafficking ventures occurring at these hotels.  They also alleged some of the hotel employees worked with the traffickers by acting as lookouts, notifying traffickers if police were present in exchange for cash or drugs.  The Does alleged that venture was comprised of traffickers, the hotel’s employees, management, owners, and franchisors as well as others involved in the sex trafficking of victims at the hotel.  They alleged that the appearance of the hotel rooms used for the trafficking and the constant flow of men in and out of rooms suggested that sex trafficking was occurring at the hotel.  They also alleged that the ongoing sex trafficking activity in the hotel would have been apparent to Choice Hotels inspectors sent to examine this hotel.

The victims of sex trafficking claiming civil liability against the franchisors rested on the hotels franchisors knowingly benefitting from the participation in a sex trafficking venture that they knew or should have known violated the Trafficking Victims Protection Reauthorization Act (TVPRA). To hold the franchisors liable the Does had to show the franchisors knowingly benefited from taking part in a common undertaking or enterprise involving risk and potential profit; that the undertaking or enterprise violated the TVPRA as to the Plaintiff, and the defendant had constructive or actual knowledge that the undertaking or enterprise violated the TVPRA.

To be liable under this federal statute, a defendant must take part in a venture involving sex trafficking. The complaint provided no plausible allegations that the franchisors took part in the common undertaking of sex trafficking.  Their only allegation as to the franchisors’ knowledge or participation in those sex trafficking ventures are that the franchisors sent inspectors to the hotels who would have seen signs of sex trafficking and that they received reviews mentioning sex work occurring at the hotels.  But observing something is not the same as participating in it and the Does failed to establish civil liability against the franchisors.