October 08, 2025|Franchise Frontlines
October 8, 2025 | U.S. District Court for the District of New Jersey | Unpublished Opinion
Executive Summary
In an unpublished opinion, Judge Susan D. Wigenton of the District of New Jersey granted in part and denied in part a motion to dismiss filed by the Texas-based franchisee of a Ramada Inn and ordered the entire case transferred to the Northern District of Texas. The plaintiff alleged she was trafficked at a Ramada Inn in Irving, Texas between 2012 and 2014 and sued both Wyndham Hotels & Resorts, Inc. and Ramada Franchise System, Inc. (the franchisor defendants) and the Texas franchisee under the Trafficking Victims Protection Reauthorization Act (TVPRA). The court found it lacked personal jurisdiction over the franchisee and held that the claims belonged in Texas, where all relevant events occurred. Although the court had jurisdiction over the franchisor defendants, it exercised its discretion under 28 U.S.C. § 1404(a) to transfer the claims against all defendants, leaving the merits of Wyndham’s Rule 12(b)(6) arguments for the transferee court.
Relevant Background
According to the allegations in the complaint, the plaintiff was trafficked on a repeated and sustained basis from January 2012 through December 2014 at a Ramada Inn located on Esters Road in Irving, Texas. She alleged that traffickers used the property to facilitate commercial exploitation and that hotel staff at times observed indicators such as high-volume male visitor traffic, visible signs of distress, and room conditions consistent with illicit activity. She further alleged that the franchisor defendants and the Texas franchisee “owned, operated, controlled, and/or managed” the hotel and thus allegedly benefitted from room revenues associated with the alleged trafficking conduct.
The franchisor defendants (Wyndham Hotels & Resorts, Inc. and Ramada Franchise System, Inc.) are incorporated in Delaware and headquartered in New Jersey. The franchisee defendant, Pramukhraj Irving LLC, is a Texas limited liability company with its principal place of business in Texas. According to the complaint, the franchisee operated the Ramada Inn during the time of the alleged trafficking.
The plaintiff initiated suit in the District of New Jersey on December 31, 2024, asserting two TVPRA causes of action: beneficiary liability under 18 U.S.C. § 1595 and vicarious liability against the franchisor defendants for the alleged acts of the franchisee and its employees. The franchisor defendants moved to dismiss under Rule 12(b)(6), and the franchisee moved to dismiss under Rules 12(b)(2) and 12(b)(6), arguing there was no personal jurisdiction over it in New Jersey and that the complaint did not plausibly plead TVPRA liability.
The court received briefing from all parties on jurisdiction, venue, the TVPRA pleading standards, the relationship among the franchisor, franchisee, and property, and the relevance of the forum-selection and governing-law provisions contained in the franchise agreement. No party requested an evidentiary hearing or jurisdiction-related discovery. Instead, the court determined that the personal jurisdiction issue could be resolved based on the pleadings and declarations submitted.
Decision
The court held that it lacked personal jurisdiction over the Texas franchisee and that the case should be transferred to the Northern District of Texas, where the underlying alleged events occurred. The decision rests on well-established jurisdictional authority, including Bristol-Myers Squibb Co. v. Superior Court, Walden v. Fiore, and Burger King Corp. v. Rudzewicz, each of which the court applied in evaluating whether the claims sufficiently “arose out of or related to” the franchisee’s activities in New Jersey.
The court first found that general jurisdiction was unavailable because the Texas franchisee was not “at home” in New Jersey. The court noted that the franchisee’s principal place of business, state of registration, and registered agent were all located in Texas. The court reiterated the principle reflected in Daimler AG v. Bauman and Goodyear Dunlop Tires Operations v. Brown that general jurisdiction is ordinarily confined to a corporation’s state of incorporation and principal place of business, and none of these connections existed in New Jersey.
The court then examined specific jurisdiction. While acknowledging that the franchisee purposefully availed itself of benefits of doing business with a New Jersey-based franchisor—a conclusion guided by Burger King—the court held that the plaintiff could not satisfy the second and more demanding prong requiring a relationship between the forum, the defendant, and the litigation. Relying on Bristol-Myers, the court found that the connection between the plaintiff’s claims and the franchisee’s New Jersey contacts was “too attenuated.” In Bristol-Myers, the Supreme Court rejected jurisdiction where plaintiffs had no injuries tied to California even though the corporation conducted business there. Here, similarly, the alleged trafficking, the conduct of the traffickers, and the actions of hotel staff all occurred in Texas. The plaintiff resides in Texas, and all witnesses, including hotel employees and potential law enforcement personnel, are located there. Thus, the court concluded that the plaintiff’s injuries “arise out of” events in Texas, not New Jersey.
The court also considered the plaintiff’s argument that the franchising relationship, including Wyndham’s reservation and payment systems headquartered in New Jersey, established a sufficient nexus to TVPRA liability. The court rejected this theory, explaining that even if the franchisee interacted with Wyndham’s systems in New Jersey, those interactions did not form the basis of the alleged trafficking venture. Citing Walden, the court explained that jurisdiction must be based on the defendant’s contacts with the forum as they relate directly to the claims asserted, not on the defendant’s relationship with a third party—in this case, Wyndham. Because the “core” conduct alleged in the complaint—the renting of rooms to traffickers—occurred at the Texas property, jurisdiction in New Jersey could not be established.
Having found no personal jurisdiction over the franchisee, the court considered the appropriate remedy under 28 U.S.C. § 1631 and § 1404(a). The plaintiff was domiciled in Texas, and the franchisee was a Texas entity. The alleged injuries occurred in Texas, and the majority of witnesses and physical evidence were located there. Citing Danziger & De Llano, LLP v. Morgan Verkamp LLC, Atlantic Marine Construction, and Jumara v. State Farm Insurance Co., the court found that the private and public interest factors favored transfer. The court noted that Texas had a meaningful interest in adjudicating alleged trafficking within its borders and that judicial economy supported having a single court address all claims and all defendants.
Although the franchisor defendants did not challenge personal jurisdiction in New Jersey, the court transferred the claims against them as well, citing judicial economy, the uniformity of adjudication, and the strong preference for having TVPRA claims adjudicated where the alleged events occurred. In two recent TVPRA franchise cases, district courts in Maryland likewise transferred franchisor cases to the location of the alleged trafficking events, a pattern Judge Wigenton found persuasive. Because transfer resolved the case in its entirety, the court declined to reach any of the substantive Rule 12(b)(6) arguments raised by Wyndham or the franchisee.
Looking Forward
This decision may provide franchisors, hotel owners, and branded systems with useful insight into how courts analyze jurisdiction and venue in TVPRA cases, particularly when plaintiffs file suit in a franchisor’s home forum. The court’s reasoning illustrates that, even when a franchisor maintains substantial operations in a particular state, courts may require a more direct connection between the alleged trafficking and the chosen forum before exercising jurisdiction over franchisee defendants. This ruling also suggests that courts may prefer to adjudicate TVPRA claims in the jurisdiction where the alleged exploitation occurred, especially where witnesses, documents, and law enforcement interactions are localized.
For franchisors, the decision underscores that a plaintiff’s reliance on reservation systems, franchise agreements, training platforms, and other New Jersey- or home-base-related activities may not be enough to establish specific jurisdiction. Courts may instead focus on where the underlying events occurred, the location of the property at issue, and the defendant’s contacts with that state. The ruling also reflects that federal courts may transfer claims against franchisors and franchisees together in the interest of judicial economy, even when the franchisor is subject to jurisdiction in the original forum.
This analysis may help franchisors appreciate that early jurisdictional motions can shape litigation strategy and potentially avoid unfavorable or inconvenient forums. Although the court declined to reach any merits arguments under the TVPRA in this case, the decision may allow franchisors to anticipate how jurisdiction and venue arguments may unfold in other cases. Future outcomes will depend on the specific allegations, the structure of the franchise relationship, and the evidence developed in the transferee court.
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 APC and Chair of the firm’s Franchise Practice Group. For questions about this article or media inquiries, you can contact Том 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.
