September 12, 2025|Franchise Frontlines
September 12, 2025 | U.S. District Court for the Middle District of Tennessee | Unpublished Opinion
Executive Summary
In an unpublished decision, Judge Eli Richardson of the Middle District of Tennessee denied a Rule 12(b)(6) motion to dismiss filed by JRD Partnership, the franchisee operator of an America’s Best Inn property. The plaintiff alleged she was sex trafficked at the hotel between 2011 and 2014 and asserted both beneficiary-liability and perpetrator-liability claims under the Trafficking Victims Protection Reauthorization Act (TVPRA). The defendant argued the complaint failed to state a claim and was time-barred. The court concluded that the allegations, taken as true for purposes of the motion, were sufficient to state plausible claims under both theories and that the statute-of-limitations defense was not apparent on the face of the complaint.
Relevant Background
According to the allegations in the Second Amended Complaint, the plaintiff was trafficked at the Clarksville America’s Best Inn during multiple years, during which her trafficker allegedly controlled and forced her to engage in commercial sex acts. The complaint alleges that sex trafficking and related criminal activity occurred regularly at the property and that hotel staff observed what the plaintiff characterizes as visible signs of trafficking, including high volumes of non-guest males entering and exiting rooms, rooms containing significant drug and sexual paraphernalia, widespread drug activity, housekeeping refusals, and areas informally identified as associated with prostitution.
The plaintiff further alleged that JRD Partnership “owned, operated, controlled, and/or managed” the Clarksville property as part of the America’s Best franchising system. The complaint asserts that the defendant continued renting rooms to traffickers, received revenue from those rentals, and accommodated room-location requests. The plaintiff also alleged that the defendant was aware that sex trafficking posed risks within the hotel industry, based on public governmental materials and training resources.
The defendant moved to dismiss, arguing the plaintiff had not alleged that it participated in a trafficking venture, had not alleged required knowledge, had not alleged the necessary elements for perpetrator liability, and that any TVPRA claim was barred by the statute of limitations.
Decision
The court denied the motion to dismiss in its entirety. In doing so, the court applied the Rule 12(b)(6) standard requiring acceptance of non-conclusory factual allegations as true at this stage.
On the beneficiary-liability claim, the court found that the plaintiff adequately alleged the first element—that the defendant “knowingly benefited”—by pleading that the hotel received revenue each time traffickers allegedly rented rooms. The court noted that district courts within the circuit have held that room rentals can constitute a financial benefit for TVPRA purposes and concluded that the allegations here plausibly satisfied this element.
Regarding participation in a venture, the court examined conflicting national authority and found persuasive the Seventh Circuit’s holding in G.G. v. Salesforce that participation in a “commercial venture” with traffickers—such as repeatedly renting rooms to them—can satisfy the participation element. The court distinguished the Eleventh Circuit’s narrower approach in Doe #1 v. Red Roof Inns, explaining that in that case the plaintiffs defined the alleged venture as a “sex trafficking venture,” whereas here the plaintiff alleged participation in a commercial venture arising from room-rental transactions. The court held that these allegations plausibly satisfied the venture requirement at the pleading stage.
On the knowledge element, the court found the plaintiff had plausibly alleged constructive knowledge by alleging that staff observed multiple indicators associated with trafficking, including repeated visits by numerous men, excessive paraphernalia, housekeeping refusals, and an area allegedly designated for prostitution. The court explained that the statute requires only that a defendant “knew or should have known” that the venture was engaged in prohibited conduct and that knowledge of a specific victim is not required under the TVPRA’s civil standard. Based on the allegations, the court found this element adequately pleaded.
The court also addressed the perpetrator-liability claims under § 1591(a)(1) and § 1591(a)(2). The court observed that the defendant’s briefing did not meaningfully address these claims or distinguish their elements from the beneficiary-liability theory. Because the defendant did not adequately challenge these distinct claims, and because the complaint alleged ongoing room rentals and alleged observations by hotel staff, the court concluded the claims had been sufficiently alleged for purposes of Rule 12(b)(6).
On the statute-of-limitations defense, the court held that a TVPRA claim must be brought within ten years of when it “arose,” and that applying the continuing-tort doctrine, the alleged trafficking here extended at least into October 2014. Because the complaint was filed in August 2023, the limitations period was not exceeded on the face of the complaint. The court therefore rejected the limitations argument, both because it was underdeveloped and because the complaint did not affirmatively establish untimeliness.
Because none of the defendant’s arguments met the standard required for dismissal at this early stage, the motion was denied.
Looking Forward
This decision may provide insight into how courts evaluate TVPRA allegations against hotel operators, especially at the motion-to-dismiss stage where courts must assume the truth of pleaded facts. Although every TVPRA case depends on its own record and jurisdictional standards, the ruling illustrates that courts may accept allegations of repeated room rentals, visible red flags, or alleged commercial interactions with traffickers as sufficient to proceed to discovery under a beneficiary-liability or perpetrator-liability theory. For franchised lodging systems, the decision may signal that allegations centered on commercial transactions or operational activity at the property can survive dismissal even when asserted against a franchisee rather than a franchisor.
The opinion also highlights that defendants may need to separately address beneficiary and perpetrator theories to avoid leaving parts of a TVPRA complaint unchallenged at the pleading stage. Additionally, the limitations analysis suggests that trafficking-related claims often span long periods, and courts may apply doctrines that extend the window for filing, depending on case-specific allegations and the timing of alleged conduct. As with other TVPRA decisions, subsequent phases of litigation will depend heavily on the evidence developed in discovery, the specific contractual framework governing the hotel, and the factual record of what was known—or should have been known—at the property level.
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.
