December 24, 2025|Franchise Frontlines
December 24, 2025 | United States District Court for the District of New Jersey | Not for Publication
Executive Summary
In an unpublished opinion, Judge Katharine S. Hayden of the United States District Court for the District of New Jersey denied a franchisee’s motion to dismiss for improper venue in a Trafficking Victims Protection Reauthorization Act (“TVPRA”) case arising from alleged trafficking at a Super 8 hotel in Norfolk, Virginia. The franchisee argued that venue was improper in New Jersey because the alleged trafficking occurred in Virginia and the franchisee operated solely in Virginia. The court disagreed, holding that the plaintiff’s allegations of franchisor-level operational control, corporate decision-making, and policy formation in New Jersey were sufficient to establish that “a substantial part of the events or omissions giving rise to the claim” occurred in New Jersey under 28 U.S.C. § 1391(b)(2). The court emphasized that the case targeted alleged corporate knowledge and policy failures at the franchisor’s headquarters—not merely on-site hotel conduct.
Relevant Background
The plaintiff alleged that she was trafficked between February 2014 and February 2015 at a Super 8 hotel located in Norfolk, Virginia. The hotel was operated by Shailey Enterprises, L.C., a Virginia-based franchisee, pursuant to a franchise agreement with Wyndham Hotels & Resorts, Inc., headquartered in New Jersey.
The amended complaint asserted beneficiary liability under 18 U.S.C. § 1595(a) against Wyndham and its related entities, as well as vicarious liability theories. The plaintiff alleged that Wyndham retained operational control through franchising agreements, training requirements, reporting protocols, revenue sharing, and policy oversight from its New Jersey headquarters. She further alleged that the franchisor and franchisee functioned as a joint venture, with the franchisee providing “boots on the ground” operations while Wyndham exercised centralized corporate control.
Shailey moved to dismiss for improper venue under Rule 12(b)(3), arguing that the trafficking occurred entirely in Virginia and that Shailey had no meaningful contacts with New Jersey. The motion did not challenge personal jurisdiction over Wyndham.
Decision
The court began with the venue statute, 28 U.S.C. § 1391(b), which permits venue in a district where “a substantial part of the events or omissions giving rise to the claim occurred.” The analysis focuses not on the defendant’s contacts with the forum, but on where the events giving rise to the claims occurred.
Shailey argued that the relevant events—namely, the alleged trafficking and hotel-level conduct—occurred in Virginia. The court acknowledged that the alleged trafficking took place in Virginia, but rejected the premise that those were the only relevant events for venue purposes.
The court emphasized that the plaintiff was not suing the trafficker. Rather, she was suing the franchisor and franchisee for allegedly enabling and profiting from trafficking through corporate policies and failures to implement adequate training, reporting, and supervision protocols. The complaint alleged that Wyndham’s corporate headquarters in New Jersey played a primary role in setting system-wide policies, retaining operational control, structuring profit-sharing arrangements, and directing reporting requirements related to trafficking.
Because the plaintiff’s theory of liability was grounded in alleged corporate-level decision-making and policy formation, the court concluded that a substantial part of the alleged omissions occurred where those decisions were made—namely, at Wyndham’s headquarters in New Jersey.
In reaching that conclusion, the court cited decisions from other districts addressing similar TVPRA venue challenges. Those courts likewise held that where plaintiffs allege systemic corporate policy failures at franchisor headquarters, venue may be proper in the district where those corporate decisions were made—even if the trafficking occurred elsewhere.
The court therefore denied Shailey’s motion to dismiss for improper venue.
The court also addressed a statute of limitations argument under the TVPRA’s ten-year limitations period. The plaintiff filed suit on February 28, 2025, and alleged that trafficking continued through at least February 28, 2015. Applying the continuing tort doctrine, the court held that the action was timely because the final alleged act occurred within the ten-year limitations period.
Looking Forward
This decision underscores the increasing importance of venue strategy in hotel-based TVPRA litigation.
First, plaintiffs continue to frame TVPRA claims as systemic failures of corporate oversight rather than isolated failures of on-site employees. When complaints emphasize centralized policy-making, training decisions, reporting protocols, and profit-sharing arrangements, courts may view those corporate-level actions—or inactions—as substantial events for venue purposes.
Second, franchisors headquartered in a particular district may face venue challenges even when the alleged trafficking occurred entirely outside that forum. Courts may distinguish between the location of the trafficking and the location of alleged policy formation and corporate decision-making.
Third, this ruling addresses venue only. It does not resolve liability. The court accepted the plaintiff’s allegations as true for purposes of the Rule 12(b)(3) motion and made no findings regarding whether Wyndham exercised sufficient operational control to establish liability under § 1595(a). Venue determinations are procedural and do not establish the merits of the claims.
For franchisors, this case reinforces the need to evaluate how franchise agreements, training materials, reporting structures, and brand standards may be characterized in litigation. Plaintiffs increasingly use allegations of centralized control to anchor venue in the franchisor’s home district. Careful delineation of operational responsibilities and documentation of compliance protocols may prove significant both in venue disputes and on the merits.
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 LLP 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.
