September 26, 2025|Franchise Frontlines
September 26, 2025 | U.S. District Court for the Central District of California | Unpublished Opinion
Executive Summary
In an unpublished decision, Judge Wesley Hsu dismissed all claims against Visa Inc. brought by a trafficking survivor who alleged that the presence and monetization of child sexual abuse material on Pornhub caused years of harm. According to the opinion, the plaintiff alleged that MindGeek repeatedly optimized, reposted, promoted, and monetized videos depicting her when she was a minor, and further alleged that Visa knowingly enabled MindGeek’s business model by processing payments associated with premium content. Visa moved to dismiss. The Court held that the plaintiff failed to state a claim against Visa under the Trafficking Victims Protection Reauthorization Act (TVPRA), rejected the plaintiff’s attempt to impose civil conspiracy liability on Visa, found no viable claim under California’s Unfair Competition Law or False Advertising Law, and explained that passive commercial relationships and knowledge of misconduct are insufficient to impose TVPRA conspiracy liability. The Court concluded that the plaintiff failed to plead an agreement, shared purpose, or intent to advance trafficking-related conduct and therefore dismissed the claims.
Relevant Background
According to the allegations that the Court accepted as true at the Rule 12(b)(6) stage, the plaintiff’s trafficking experience began when a sexually explicit video of her was uploaded to Pornhub when she was thirteen. The opinion recounts that MindGeek allegedly reviewed, tagged, categorized, and promoted the content, placed advertisements alongside it, and reposted it across its other websites despite warnings from the plaintiff that she was a minor and that the content constituted illegal child sexual abuse material. The plaintiff alleged that even after MindGeek acknowledged that the content was illegal, additional copies remained online, were downloaded and reuploaded, and accumulated millions of views. The complaint described escalating harm to the plaintiff, including harassment, housing instability, self-harm, and further exploitation by an adult who allegedly produced new videos of her to fund her drug addiction. The plaintiff asserted that MindGeek’s business model relied on high-volume traffic and content—including unlawful content—to maximize advertising revenue and premium subscriptions.
The plaintiff alleged that Visa played a significant role in the monetization structure by processing payments associated with MindGeek’s premium sites. According to the complaint, Visa conducted due diligence reviews, received letters from anti-trafficking advocates, publicly responded to concerns, and was aware that PayPal terminated its relationship with MindGeek in 2019. The plaintiff alleged that Visa continued to process payments for MindGeek’s premium sites until late 2020, when a widely circulated New York Times report exposed severe moderation failures on Pornhub. The plaintiff contended that Visa’s continued business relationship allowed MindGeek to benefit financially from the content, including content involving minors.
Visa moved to dismiss, arguing that its conduct amounted to nothing more than the provision of standard payment-processing services and did not constitute participation in, agreement with, or intent to advance trafficking. The Court previously dismissed certain claims under an earlier complaint; the plaintiff then filed a Second Amended Complaint reiterating TVPRA, conspiracy, UCL, FAL, and California statutory claims. The Court analyzed each claim in light of recent cases from the Supreme Court, the Ninth Circuit, the Seventh Circuit, and district courts addressing TVPRA liability.
Decision
The Court first addressed direct beneficiary liability under § 1595 and reaffirmed a prior ruling that dismissed this claim with prejudice. The Court explained that although some courts have held that knowledge of a specific trafficking victim is not required, the dismissal in this case did not turn on whether Visa knew of the plaintiff individually. Instead, the dismissal rested on the absence of allegations showing that Visa participated in or directly furthered a trafficking venture. The Court noted that out-of-circuit decisions cited by the plaintiff did not alter controlling Ninth Circuit law and did not justify reconsideration.
The Court then evaluated the plaintiff’s civil conspiracy claim under § 1595 and applied the Supreme Court’s analysis in Twitter v. Taamneh, which emphasized the limits of civil aiding-and-abetting and conspiracy liability. The Court explained that conspiracy requires three elements: actual knowledge of the illegal objective, agreement to join the venture, and intent to further its unlawful purpose. The Court recognized that the plaintiff plausibly alleged Visa had awareness of significant misconduct on MindGeek’s platforms based on due diligence, public scrutiny, and reports from advocacy organizations. The Court nonetheless concluded that actual knowledge alone is insufficient for civil conspiracy and that the allegations did not establish an agreement or shared unlawful purpose.
The Court emphasized that the allegations described a passive commercial relationship rather than a coordinated effort. The Court noted that the plaintiff did not allege that Visa tailored its services to advance trafficking-related content, coordinated actions with MindGeek, or provided custom technology to support illegal conduct. The Court highlighted that even if Visa’s services were financially significant to MindGeek, operational leverage does not show alignment with unlawful objectives. The Court explained that the plaintiff’s allegations described continuation of routine payment services rather than intentional support for trafficking. Because conspiracy requires purposeful alignment with the objectives of the alleged venture, the Court held that the plaintiff’s allegations fell short.
The Court also dismissed state-law conspiracy claims. The Court explained that conspiracy under California law is not an independent cause of action but a theory of derivative liability requiring an underlying tort. The Court examined the plaintiff’s asserted predicate torts under California statutes governing private sexually explicit materials, human trafficking, unfair competition, and advertising. The Court found that the plaintiff did not plausibly allege that MindGeek violated California’s private-images statute because the videos were first distributed by others who recorded and uploaded them without the plaintiff’s consent. The Court found that the plaintiff did not allege facts showing MindGeek violated the California Trafficking Victims Protection Act because the statute requires proof of intentional deprivation of personal liberty or intent to obtain forced labor or services. The Court also held that the plaintiff failed to identify actionable advertising to sustain an FAL claim. Because the complaint lacked an actionable underlying tort, the Court concluded that the state-law conspiracy theories failed as a matter of law.
Finally, the Court dismissed the plaintiff’s claims under the UCL and FAL against Visa. The Court explained that UCL liability must be tethered to a predicate unlawful act and that the plaintiff had not adequately pleaded a TVPRA, CTVPA, or private-images violation. The Court also determined that the FAL claim failed because the plaintiff did not identify any statement by Visa that could constitute false or misleading advertising. Based on these findings, the Court granted Visa’s motion to dismiss in full and permitted the plaintiff to amend portions of the complaint not dismissed with prejudice.
Looking Forward
This decision illustrates several issues relevant to franchisors and other multi-unit brand systems, while remaining rooted in the specific allegations before the Court. The opinion underscores the high bar that courts apply to conspiracy theories under the TVPRA and the significant distinction between awareness of misconduct and purposeful participation. Under different facts or in other jurisdictions, courts may apply these principles differently; however, this opinion reflects an emerging consensus that passive commercial relationships, generalized business interactions, or operational leverage do not amount to intent or agreement to further trafficking. For franchisors, this reinforces the importance of maintaining clear operational boundaries and ensuring that systemwide policies, including technology tools and revenue systems, do not suggest involvement in or supervision of franchisee-specific employment or guest interactions.
The Court’s analysis also shows that TVPRA liability depends on specific allegations of coordinated conduct tied to unlawful objectives. Many plaintiffs in the hotel-trafficking context attempt to treat franchisors as conspirators based on brand standards, reservation systems, fee structures, or the franchisor’s financial benefit from franchisee operations. This opinion illustrates that benefit alone is not enough and that courts will look closely at whether allegations identify affirmative steps showing intentional alignment with trafficking activity. The Court explicitly rejected attempts to impose liability based on continued business relationships, inaction, or failure to prevent misconduct, which are commonly asserted in trafficking actions against franchise systems.
Finally, the decision highlights the importance of careful pleadings and clear litigation strategy when plaintiffs attempt to attach conspiracy, UCL, or other expansive theories to entities that operate at arm’s length. The ruling is a reminder that franchise systems may reduce litigation risk through clear documentation of franchisee independence, consistent enforcement of brand standards within their contractual limits, and thoughtful structuring of system tools so that they do not suggest control over franchisee decision-making or customer-facing security protocols. Although TVPRA jurisprudence continues to evolve, this decision stands as an example of a court applying a measured approach to conspiracy liability that requires allegations of intentional participation rather than mere association, benefit, or silence.
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.
