September 29, 2025|Franchise Frontlines
September 29, 2025 | U.S. District Court for the Southern District of Ohio | Unpublished Opinion
Executive Summary
In an unpublished opinion, Judge Algenon L. Marbley of the Southern District of Ohio denied Wyndham Hotels & Resorts, Inc.’s motion to dismiss or transfer a civil trafficking case brought under the Trafficking Victims Protection Reauthorization Act (TVPRA) and the Child Abuse Victim’s Rights Act (CAVRA). The plaintiff alleged that she was trafficked as a minor at several branded hotel properties from 2019 to 2022. Wyndham argued lack of personal jurisdiction, challenged the sufficiency of the beneficiary-liability allegations, disputed the plausibility of agency and joint-employer theories, and sought transfer to Michigan. The court rejected each argument, held that nationwide personal jurisdiction existed under CAVRA, and concluded that the complaint plausibly alleged direct civil liability under the TVPRA’s beneficiary-liability standard, as well as agency and joint-employer vicarious liability. The court also granted the plaintiff leave to file a sur-reply.
Relevant Background
According to the allegations in the complaint, the plaintiff ran away from foster care at age fourteen and was trafficked for sex at multiple hotel properties affiliated with Wyndham and G6 Hospitality between 2019 and 2022. The complaint alleged that at Wyndham-branded hotels, she was forced by traffickers to engage in commercial sex on a near-constant basis and that numerous visible indicators of trafficking were present. These alleged indicators included day-to-day cash payments, repeated extended stays, requests for rooms in isolated locations, large numbers of male visitors, large quantities of condoms in the trash, audible conflict and screaming, and apparent bruising, deterioration, and malnutrition. The plaintiff alleged that staff at these properties observed these indicators and that Wyndham benefitted financially from room rentals and customer data collected through the hotel’s systems.
The plaintiff further alleged that Wyndham exercised significant operational control over its branded properties, including control over reservation systems, property-management platforms, rate structures, training programs, inspections, data collection, and vendor relationships. She alleged that Wyndham posted hotel jobs on its corporate website, provided training, and established policies that governed staff conduct at Wyndham-branded hotels. Wyndham moved to dismiss for lack of personal jurisdiction, failure to state TVPRA or CAVRA claims, and failure to state agency or joint-employer theories. Wyndham also sought transfer to Michigan, where some alleged trafficking occurred.
Decision
The court denied Wyndham’s motion to dismiss and rejected its request to transfer the case.
The court first held that CAVRA confers nationwide personal jurisdiction. Because the plaintiff alleged she was trafficked as a minor in violation of 18 U.S.C. § 1591 and plausibly pleaded minor status at the time, the court found CAVRA’s jurisdictional provision sufficient. The court noted that CAVRA does not limit civil actions to criminal offenders and does not specify the persons against whom actions may be brought. The court found the statute’s text controlling and held that personal jurisdiction was proper in the Southern District of Ohio.
On the TVPRA claim, the court concluded that the plaintiff plausibly alleged beneficiary liability under § 1595(a). The plaintiff’s allegations that Wyndham received room-rental revenue, failed to implement adequate anti-trafficking measures, and exercised operational control over the property were sufficient to allege a “knowing benefit.” The court emphasized that the benefit element does not require the defendant to have actual knowledge of the trafficking, only that it knowingly received financial value from the underlying commercial relationship.
Regarding “participation in a venture,” the court reiterated that in this jurisdiction the venture need not be a “sex-trafficking venture” specifically. The plaintiff’s allegations that Wyndham and its franchisees engaged in commercial business activities that generated revenue from repeated room rentals, combined with staff-level red flags and industry-specific warnings, were sufficient at the pleading stage. The court rejected arguments that franchisor-franchisee relationships are too attenuated to support TVPRA participation allegations, citing prior decisions in this jurisdiction and distinguishing narrower approaches in other circuits.
On the knowledge element, the court held that constructive knowledge is sufficient under § 1595(a). The plaintiff’s allegations that hotel staff observed visible signs of abuse, combined with industrywide awareness of trafficking and alleged failures to implement policies or training, were enough to satisfy the “knew or should have known” standard at this stage. The court analogized the allegations to prior cases in which visible indicators gave rise to plausible constructive knowledge, concluding that the plaintiff’s allegations fell within the range that courts have previously allowed to proceed.
The court also concluded that the plaintiff plausibly alleged vicarious liability under both agency and joint-employer theories. Under agency theory, the court found that allegations of Wyndham’s operational control—including mandated reservation platforms, property-management systems, inspections, room-rate controls, mandated vendors, and data-collection systems—were sufficient to allege Wyndham retained the right to control its franchisee’s operations. The court noted that the franchise model does not preclude agency liability when factual allegations support the right to control.
Under joint-employer theory, the court found that allegations concerning Wyndham’s role in job postings, training programs, advancement policies, operating standards, benefits, and employment-related oversight were sufficient to allege joint employment at the pleading stage. The court observed that the Sixth Circuit’s joint-employer analysis is fact-intensive and that these allegations warranted discovery.
Finally, the court denied Wyndham’s motion to transfer venue. The court found that the plaintiff’s choice of forum is entitled to great deference and that Wyndham’s generalized assertions about Michigan-based witnesses were insufficient to justify transfer. Transfer is not appropriate when it merely shifts inconvenience from one party to another.
The court granted the plaintiff’s motion for leave to file a sur-reply to address Wyndham’s arguments regarding the predicate criminal violation. The court reasoned that the sur-reply provided helpful clarification and did not prejudice Wyndham.
Looking Forward
This decision may illustrate how courts in certain jurisdictions evaluate TVPRA claims against franchisors when plaintiffs allege constructive knowledge, financial benefit, and operational oversight. Depending on the jurisdiction and the record presented, allegations about reservation systems, brand standards, operational protocols, and training programs may be viewed as sufficient to proceed past the pleading stage, even when franchisors dispute the extent of their involvement in day-to-day operations. Courts may also distinguish between franchising structures and the degree of control exercised within those structures, emphasizing that agency and joint-employer theories require fact-specific inquiry not suited to dismissal prior to discovery.
The ruling also highlights CAVRA’s expansive jurisdictional provisions, which may allow plaintiffs to file suit in jurisdictions far removed from the location of the alleged trafficking. For franchisors and hotel systems operating nationally, this aspect of the decision may reinforce the importance of anticipating litigation across multiple venues and understanding variations in judicial interpretations of TVPRA elements.
Although different courts interpret the TVPRA differently and outcomes depend heavily on the specific facts and jurisdiction, this decision reflects how one federal court approached allegations of constructive knowledge, operational involvement, and commercial benefit at the motion-to-dismiss stage. Later stages of litigation will depend on the evidentiary record developed through discovery. As always, the implications for franchisors may vary based on individual system structures, contractual arrangements, and the operational controls exercised within a given brand.
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.
