January 12, 2026|Franchise Frontlines
January 12, 2026 | United States District Court for the Eastern District of Wisconsin | Decision and Order
Executive Summary
In Doe (C.T.K.) v. Choice Hotels International, Inc., 2026 WL 84449 (E.D. Wis. Jan. 12, 2026), Judge William C. Griesbach dismissed Trafficking Victims Protection Reauthorization Act (“TVPRA”) claims against both a Comfort Suites franchisee and franchisor. The plaintiff alleged she was trafficked at a franchised hotel and asserted perpetrator liability, beneficiary liability under 18 U.S.C. § 1595(a), and vicarious liability against Choice Hotels. The court held that the complaint failed to plausibly allege facts demonstrating that the defendants knew or should have known she was subjected to force, fraud, or coercion, as required for adult trafficking claims under 18 U.S.C. § 1591(a). The court further held that generalized “red flag” allegations were insufficient to establish constructive knowledge and distinguished the Seventh Circuit’s decision in G.G. v. Salesforce.com, Inc., 76 F.4th 544 (7th Cir. 2023). The complaint was dismissed with leave to amend.
Relevant Background
The plaintiff alleged that from July 2014 through March 2015 she was trafficked at a Comfort Suites hotel in Appleton, Wisconsin, owned and operated by App Pro of Appleton, Inc., a franchisee of Choice Hotels International.
The amended complaint alleged that the hotel industry is aware of sex trafficking risks and that “red flags” of trafficking were present at the property, including cash payments, prepaid cards, repeated towel requests, heavy foot traffic in and out of rooms, and late-night visitors. The complaint further alleged that Defendants “knew or should have known” of her trafficking and continued renting rooms to her trafficker.
Plaintiff asserted three claims under the TVPRA: (1) perpetrator liability under 18 U.S.C. § 1591(a); (2) beneficiary liability under § 1595(a); and (3) vicarious liability against Choice Hotels for the franchisee’s conduct.
Decision
The court granted both motions to dismiss.
The court began by emphasizing that for adult victims, a violation of § 1591(a) requires that the commercial sex act be induced through “force, threats of force, fraud, or coercion,” as defined in 18 U.S.C. § 1591(e)(2). Although the complaint alleged that Plaintiff was trafficked “through force and coercion,” the court characterized those allegations as conclusory recitations of statutory language. The complaint did not allege non-conclusory facts describing how force, threats, fraud, or coercion were used.
Even assuming Plaintiff sufficiently alleged a trafficking violation, the court held that the complaint failed to plausibly allege that Defendants knew or should have known of trafficking within the meaning of § 1595(a).
The court carefully distinguished between:
- Knowledge of commercial sex activity or prostitution; and
- Knowledge that force, fraud, or coercion was being used to compel commercial sex.
The “red flags” cited in the complaint—including cash payments, frequent room turnover, heavy foot traffic, and repeated towel requests—might suggest possible prostitution but did not plausibly demonstrate knowledge of trafficking as defined by federal law.
The court noted that hotels are not law enforcement agencies and that the TVPRA does not impose an affirmative duty to monitor or surveil guests. The opinion cited multiple district court decisions holding that generalized red-flag allegations, without more, are insufficient to establish actual or constructive knowledge of trafficking.
The court also addressed Plaintiff’s reliance on G.G. v. Salesforce.com, Inc., in which the Seventh Circuit allowed a claim to proceed against a software company alleged to have knowingly contracted with a large-scale, well-known sex-trafficking enterprise. The court distinguished G.G., explaining that in cases involving a single property and alleged trafficking of one victim, knowledge of the specific victim’s trafficking is central. Allegations of industry-wide trafficking problems do not bridge the gap between “might have been able to guess” and “knew or should have known.”
Because the complaint failed to plausibly allege beneficiary liability, it necessarily failed to allege perpetrator liability, which requires actual knowledge. The vicarious liability claim against Choice Hotels likewise failed because no underlying violation was sufficiently pleaded against the franchisee.
The court dismissed the complaint but granted leave to amend.
Looking Forward
This decision provides important clarification in the evolving body of hotel-franchise TVPRA litigation.
First, the court reinforced that pleading standards matter. Conclusory allegations tracking statutory language will not suffice. For adult victims, complaints must contain factual allegations plausibly demonstrating force, fraud, or coercion—not merely commercial sex activity.
Second, the opinion underscores the distinction between knowledge of suspicious activity and knowledge of trafficking as defined by statute. Red flags associated with prostitution or general criminal conduct do not automatically establish constructive knowledge of trafficking involving coercion.
Third, the court carefully distinguished cases involving defendants alleged to have knowingly partnered with large-scale trafficking enterprises. Where the allegations concern a single property and an individual victim, courts continue to require a strong nexus between observed conduct and knowledge of trafficking.
Finally, the ruling illustrates that vicarious liability claims against franchisors remain contingent on sufficiently pleaded underlying violations. Absent plausible allegations that the franchisee engaged in trafficking within the statutory definition, derivative claims against the franchisor will not proceed.
This is a pleading-stage dismissal, and the plaintiff has been granted leave to amend. Nonetheless, the opinion contributes to a growing line of decisions cabining constructive knowledge theories in hotel franchise TVPRA cases and reinforcing the statutory limits of civil trafficking liability.
This article is based solely on the opinion of the Court in this matter. The author has not conducted any independent investigation into the facts. For the avoidance of doubt, each statement related to the law and facts in this article is drawn from the Court’s opinion in this case.
Thomas O’Connell is a Shareholder at Buchalter LLP and Chair of the firm’s Franchise Practice Group. For questions about this article or media inquiries, you can contact Tom at toconnell@buchalter.com.
This communication is not intended to create, and does not create, an attorney-client relationship or any other legal relationship. No statement herein constitutes legal advice, nor should it be relied upon or interpreted as such. This communication is for general informational purposes only and is not a substitute for legal counsel. Readers should not act or refrain from acting based on any information provided without seeking appropriate legal advice specific to their situation. For more information, visit www.buchalter.com.
