September 12, 2025|Franchise Frontlines
September 12, 2025 | U.S. District Court for the Western District of Washington | Unpublished Opinion
Executive Summary
In an unpublished decision, Judge Richard A. Jones granted the franchisor defendants’ motion to dismiss TVPRA claims arising from allegations that the plaintiff was trafficked at a franchised Holiday Inn location. According to the complaint, the plaintiff alleged that the franchisors—Six Continents Hotels, Inc. and Holiday Hospitality Franchising, LLC—and the franchisee, Cascade Hospitality LLC, knowingly benefited from and participated in a trafficking venture. The defendants argued that the complaint alleged only generalized knowledge of commercial sex activity in the hotel industry and did not plausibly show knowledge, constructive knowledge, or participation in any trafficking enterprise. The court agreed, concluding that the complaint did not plausibly allege that any defendant knew or should have known of trafficking at the hotel, nor did it plausibly allege participation in a venture under 18 U.S.C. § 1595. The court dismissed all claims without prejudice and granted the plaintiff leave to amend.
Relevant Background
According to the allegations the court accepted as true at the Rule 12(b)(6) stage, the plaintiff asserted that she was trafficked between December 2013 and December 2014 at a Holiday Inn near SeaTac, Washington. The franchisor defendants license the Holiday Inn brand and system, while the franchisee defendant owns and operates the property.
The complaint alleged that during the time period at issue, the plaintiff used identification to rent rooms, sometimes accompanied by her trafficker. She further alleged that she wore provocative clothing, walked with “johns” to the guest room, used “Do Not Disturb” signs, frequently requested linens, and was occasionally seen with her trafficker nearby. The complaint also referred to general awareness within the hotel industry regarding trafficking risks, along with industry trainings, nonprofit initiatives, and congressional reports on trafficking in hotels.
The plaintiff also pointed to two online reviews posted in 2015 and 2016 referencing “prostitutes” or adult encounters at the same hotel. She alleged that these reviews, combined with general industry awareness, should have put the defendants on notice of potential trafficking.
Based on these allegations, the complaint advanced two theories of liability: (1) beneficiary liability under the TVPRA, alleging the defendants knowingly benefited from participation in a trafficking venture; and (2) vicarious liability, alleging the franchisors were responsible for the franchisee’s conduct. The defendants moved to dismiss, arguing that the plaintiff failed to allege specific knowledge, constructive knowledge, or participation in a TVPRA-violating venture.
Decision
The court granted the motion to dismiss, holding that the allegations did not satisfy Rule 12(b)(6).
The court first addressed the TVPRA’s knowledge requirement. It explained that beneficiary liability requires allegations that the defendants knowingly benefited from participating in a venture they knew or should have known was engaged in trafficking. The opinion emphasized that general awareness of trafficking in the hotel industry, or at other IHG-branded properties, does not constitute knowledge of specific trafficking involving the plaintiff or a particular enterprise at the relevant location. The court noted that the two online reviews cited in the complaint were posted after the plaintiff’s alleged trafficking and referenced adult commercial sex rather than trafficking, making them insufficient to plausibly allege knowledge.
The court next addressed the plaintiff’s “red flag” allegations. According to the opinion, allegations that a guest uses cash, displays provocative clothing, escorts multiple visitors, or requests linens may suggest commercial sex but do not plausibly allege constructive knowledge of trafficking involving force, fraud, or coercion. The court compared these allegations to TVPRA cases where more severe indicators—such as visible injuries, audible distress, or assistance from hotel staff—had been present. The complaint here did not contain similar factual content.
The court also found no plausible allegations of “participation in a venture.” It explained that standard hotel-guest interactions—renting rooms, honoring “Do Not Disturb” signs, and providing towels—fall within the scope of traditional hospitality services and do not constitute participation in trafficking. The court rejected the argument that a franchise relationship itself satisfies the “venture” requirement, noting that the TVPRA requires a venture engaged in TVPRA violations, not a routine business relationship between franchisor and franchisee.
Because the complaint did not plausibly allege participation in a trafficking venture or knowledge that trafficking occurred, the court dismissed all claims without prejudice and granted leave to amend.
Looking Forward
Although based on the specific allegations and limited record before the court, this decision provides several useful insights for hospitality franchisors and other branded systems. The court’s analysis underscores the importance of distinguishing between allegations suggestive of commercial sex and allegations plausibly tied to sex trafficking involving force, coercion, or fraud. Under different factual circumstances or in other jurisdictions, courts may evaluate similar assertions differently, but this opinion highlights that generalized industry awareness, online commentary, and routine guest interactions do not automatically demonstrate knowledge or constructive knowledge under the TVPRA.
The court’s treatment of the “participation in a venture” requirement also reinforces that ordinary franchise relationships, brand support, and standard operational interactions are not themselves TVPRA “ventures.” For franchisors, this distinction supports the value of maintaining clear operational boundaries and documenting that franchisees independently manage day-to-day employment and guest-facing operations. The reasoning also signals that routine hotel services, without more, do not cross the line into actionable conduct under the TVPRA.
Finally, as trafficking litigation continues to evolve nationally, especially within the hospitality industry, franchisors may take from this opinion that clear system standards, consistent training, and well-documented franchisee responsibilities can help demonstrate the independence of franchisee operations and preserve the distinction between brand affiliation and operational control.
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 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.
