February 05, 2026|Franchise Frontlines
February 5, 2026 | United States District Court for the District of New Jersey | Not for Publication
Executive Summary
In an unpublished opinion, the United States District Court for the District of New Jersey adopted a magistrate judge’s recommendation and transferred TVPRA claims against Wyndham franchisee defendants to the Central District of California for lack of specific personal jurisdiction. The plaintiff alleged that she was trafficked at a California hotel operating under the Wyndham brand and sought to hale individual franchisee defendants into New Jersey court based in part on their use of Wyndham’s New Jersey-based reservation systems. The court held that such contacts were too attenuated to establish that the plaintiff’s claims “arise out of or relate to” the franchisee defendants’ activities in New Jersey under Ford Motor Co. v. Montana Eighth Judicial District Court, 592 U.S. 351 (2021), and Bristol-Myers Squibb Co. v. Superior Court, 582 U.S. 255 (2017). The decision underscores the limits of personal jurisdiction over out-of-state franchisees based solely on centralized brand infrastructure.
Relevant Background
The plaintiff filed suit in the District of New Jersey alleging violations of the Trafficking Victims Protection Reauthorization Act (“TVPRA”), 18 U.S.C. §§ 1591 and 1595. She asserted that she was trafficked at a hotel located in California and brought claims against franchisor defendants and individual franchisee defendants.
The franchisee defendants moved to dismiss for lack of personal jurisdiction under Rule 12(b)(2), arguing that all alleged trafficking occurred in California and that they lacked sufficient contacts with New Jersey. The magistrate judge recommended dismissal for lack of personal jurisdiction and transfer to the Central District of California. The plaintiff objected, arguing that the franchisees’ participation in a broader commercial venture tied to Wyndham’s New Jersey headquarters—including the use of New Jersey-based reservation systems—was sufficient to establish specific jurisdiction.
The district court conducted de novo review of the portions of the report and recommendation to which the plaintiff objected.
Decision
The court began with the familiar three-part framework for specific jurisdiction in the Third Circuit: (1) the defendant must have purposefully directed activities at the forum; (2) the plaintiff’s claims must arise out of or relate to those activities; and (3) the exercise of jurisdiction must comport with fair play and substantial justice. See Marten v. Godwin, 499 F.3d 290, 296 (3d Cir. 2007).
The dispute centered on the second prong—whether the plaintiff’s TVPRA claims “arise out of or relate to” the franchisee defendants’ New Jersey contacts. Relying on Ford Motor Co., the court emphasized that while “relate to” is broader than strict causation, it nonetheless incorporates “real limits.” 592 U.S. at 362. There must be a strong relationship among the defendant, the forum, and the litigation.
The plaintiff argued that the magistrate judge improperly focused on the location of her injury—California—rather than on the alleged commercial venture linking franchisees and the franchisor’s New Jersey headquarters. She contended that the franchisees’ use of Wyndham’s New Jersey-based systems created sufficient ties to the forum.
The district court rejected that argument. It concluded that the use of centralized reservation or brand systems headquartered in New Jersey was too attenuated from the alleged trafficking conduct, which occurred entirely in California. The court explained that although the franchisees may have accessed systems located in New Jersey, the conduct at the core of the plaintiff’s claims—rental of rooms to alleged traffickers—took place in California. The mere use of New Jersey-based reservation systems did not create the necessary connection between the forum and the specific claims.
In adopting the report and recommendation, the court also rejected the plaintiff’s request for jurisdictional discovery. The court noted that the plaintiff already possessed the relevant franchise agreement and had not articulated any specific basis to believe that further discovery would reveal additional forum contacts sufficient to establish jurisdiction.
Accordingly, the court transferred the claims against the franchisee defendants to the Central District of California.
Looking Forward
This decision provides important guidance for franchisors and franchisees facing nationwide TVPRA litigation. Plaintiffs increasingly attempt to anchor jurisdiction in a franchisor’s home state by pointing to centralized brand infrastructure—reservation systems, reporting platforms, corporate oversight, or headquarters operations. This opinion reinforces that such generalized contacts may not, standing alone, satisfy the “arise out of or relate to” requirement for specific jurisdiction.
The Supreme Court’s decision in Ford Motor Co. made clear that a strict causal relationship is not always required. But this case demonstrates that there remain meaningful limits. Courts continue to require a strong relationship among the defendant, the forum, and the underlying controversy. Where the alleged misconduct occurs entirely in another state, and the forum contacts consist primarily of access to centralized systems, personal jurisdiction may not lie.
For franchisors operating national systems, the opinion also illustrates the continuing importance of corporate separateness and clear delineation of franchisee operations. While brand-wide systems and platforms are essential to modern franchise models, their existence does not automatically expose every franchisee to suit in the franchisor’s home state. That said, jurisdictional analyses remain fact-specific, and courts will closely scrutinize the nature and scope of the alleged contacts.
Franchise systems facing multi-state litigation should evaluate how their agreements and operational structures are described in pleadings and motions. The careful articulation of what centralized systems do—and do not do—can materially affect jurisdictional outcomes.
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.
