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September 26, 2025 | U.S. District Court for the Central District of California | Unpublished Opinion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In an unpublished decision, Judge Wesley L. Hsu of the Central District of California granted Visa Inc.’s motion to dismiss all claims brought against it under the Trafficking Victims Protection Reauthorization Act (TVPRA) and related California laws. The plaintiff alleged that Visa knowingly facilitated MindGeek’s monetization of child sexual abuse material by processing payments for MindGeek’s paid sites. The court found that the pleadings did not establish direct beneficiary liability, did not state a plausible civil conspiracy claim under the TVPRA even after a 2023 amendment expanding civil liability, and did not support claims under California’s civil conspiracy, privacy, and consumer-protection statutes. The ruling provides significant guidance on the limits of TVPRA liability for companies that supply commercial services to accused wrongdoers.
Relevant Background
According to the allegations in the Second Amended Complaint, the plaintiff was the victim of sex trafficking and child sexual abuse material (CSAM) that was uploaded and reuploaded to Pornhub and related websites controlled by the MindGeek defendants. The complaint described MindGeek’s alleged business model as one built on maximizing traffic and advertising revenue, including through the alleged optimization, tagging, and monetization of nonconsensual content. The plaintiff alleged that MindGeek failed to remove CSAM promptly and sometimes reuploaded content after taking it down.
The plaintiff asserted that Visa knowingly provided payment-processing services to MindGeek during the relevant period and thereby facilitated MindGeek’s ability to monetize unlawful content. Visa allegedly became aware of trafficking-related concerns through internal due diligence, communications from advocacy groups, media reports, and the public withdrawal of PayPal from doing business with MindGeek in 2019. The plaintiff alleged that despite these notices, Visa continued to authorize certain categories of transactions until late 2020, when both Visa and Mastercard temporarily suspended MindGeek’s access to payment networks following a widely publicized news investigation.
Visa denied any involvement in the plaintiff’s trafficking and moved to dismiss the TVPRA claims for failure to state a claim, arguing that it did not participate in or intend to further a trafficking venture; did not enter into any agreement with MindGeek to support unlawful conduct; and did not meet the statutory elements of beneficiary or conspiracy liability under federal or state law.
Decision
The court dismissed all claims against Visa, finding that the plaintiff had not plausibly alleged the required elements of direct beneficiary liability or civil conspiracy under the TVPRA, nor the elements of several California state-law claims.
The court first held that it would not reconsider the prior judge’s earlier dismissal with prejudice of the plaintiff’s direct beneficiary-liability claim under 18 U.S.C. § 1591(a)(2). Although the plaintiff cited out-of-circuit cases suggesting a broader reading of beneficiary liability, the court found that those decisions did not alter the core deficiency identified in the earlier ruling—namely, that the allegations did not show Visa “participated” in a trafficking venture within the meaning of the statute. The court reaffirmed that Visa had no alleged direct relationship with any trafficker or involvement with the plaintiff or her videos.
The court then addressed the plaintiff’s civil-conspiracy claim under the TVPRA. A significant legal question was whether the 2023 amendment to § 1595(a)—which added explicit civil liability for those who “attempt or conspire to benefit” from a trafficking venture—applies retroactively to conduct predating the amendment. After reviewing legislative history, the statutory text, and prior circuit-splitting decisions, the court found that the amendment clarified rather than expanded the statute, and therefore applies retroactively. Even with this broader civil-liability language, however, the court concluded that the plaintiff had not plausibly alleged the essential elements of conspiracy.
The court held that the complaint failed to allege actual knowledge of an unlawful objective, agreement to commit an unlawful act, or intent to further the purpose of a trafficking venture. The court emphasized that a business relationship, even one continued after receiving red-flag information, is insufficient to allege conspiracy without facts showing alignment with unlawful aims. The court found that the complaint described a passive continuation of payment-processing services, not intentional participation in any trafficking activity.
The court further held that state-law conspiracy claims under California’s civil statutes could not be sustained. Claims based on California’s statute governing distribution of private sexually explicit material failed because the complaint did not allege that MindGeek was the first distributor of the material. Claims under California’s Trafficking Victims Protection Act failed because the complaint did not allege facts showing MindGeek deprived the plaintiff of her personal liberty or acted with intent to obtain forced labor or commercial sex acts under California law. The court also dismissed claims under California’s Unfair Competition Law (UCL) and False Advertising Law (FAL) for lack of a viable predicate violation.
Because the plaintiff had been provided prior opportunities to amend certain claims and had not cured the deficiencies, the court dismissed some claims with prejudice and others without prejudice but with leave to amend under specified conditions.
Looking Forward
This decision may provide significant guidance to companies that operate within multi-entity networks or provide critical commercial services to other businesses. The ruling suggests that courts may require detailed factual allegations demonstrating actual knowledge, agreement, and intent before imposing civil conspiracy liability under the TVPRA. A defendant’s awareness of allegations or generalized concerns about a business partner’s practices may not be enough to establish liability; courts may examine whether the defendant affirmatively aligned itself with an unlawful purpose or took concrete steps to further the alleged venture.
The ruling also illustrates that continuing to supply services—such as payment processing, data management, digital-platform access, or other infrastructure services—may not, standing alone, constitute participation under the TVPRA. Courts may distinguish between passive commercial conduct and intentional collaboration, particularly when the defendant’s services are standardized or arm’s-length rather than bespoke or integrated into an unlawful enterprise. The outcome is fact-specific and will depend on the nature of the relationship, the statutory framework, and the record developed through discovery.
For businesses operating national brands or franchise-like systems, this decision may offer insight into how courts analyze allegations of secondary liability when plaintiffs attempt to extend claims upstream through contractor networks, service providers, or affiliated entities. While the statutory analysis in this case is specific to the TVPRA, the principles regarding knowledge, agreement, and intent may be instructive in other contexts involving joint-employment, vendor oversight, or tort-based theories of systemic participation. As always, outcomes will vary based on jurisdiction, allegations, and applicable statutory language, but this opinion provides a detailed look at how one court approached the question of secondary liability for commercial service providers in trafficking litigation.
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.
