July 28, 2025|Publications
July 28, 2025 | U.S. District Court for the District of Maryland | Unpublished Opinion
Executive Summary
In an unpublished memorandum opinion, Judge Theodore D. Chuang of the District of Maryland granted Choice Hotels International, Inc.’s motion to transfer and GP4 Property Owner, LLC’s motion to dismiss for lack of personal jurisdiction in a trafficking case under the Trafficking Victims Protection Reauthorization Act (“TVPRA”), 18 U.S.C. §§ 1581–1597. Plaintiff alleged she was trafficked in 2014 at the Suburban Extended Stay Bay Meadows in Jacksonville, Florida, a Choice-branded franchise owned by GP4. The court held that GP4’s franchise agreement with Maryland-based Choice did not establish personal jurisdiction in Maryland because plaintiff’s TVPRA claims did not “arise out of or relate to” the agreement. The court then transferred the entire case to the Middle District of Florida, where the trafficking occurred and key witnesses were located.
Relevant Background
Plaintiff, a Georgia resident, alleged she was “trafficked through force and coercion by her trafficker to engage in numerous commercial sex acts” between 2010 and 2016, including “an incalculable number of times” from June through October 2014 at the Suburban Extended Stay Bay Meadows in Jacksonville, Florida (the “Hotel”). During that period, the Hotel was owned and operated by GP4, a North Carolina LLC, as a franchise of Choice, a Delaware corporation headquartered in Maryland.
Plaintiff alleged that both Choice and GP4 “owned, operated, and controlled” the Hotel and had “actual and constructive knowledge” of her trafficking. She claimed defendants were aware of “the widely known and pervasive” link between sex trafficking and hotels, citing a statistic that “92 percent of calls to the Human Trafficking Hotline” in 2014 reported trafficking at hotels. She also alleged that Choice “monitored criminal activity occurring at its branded hotels” and was aware of reports of prostitution at Choice properties, pointing to customer reviews between 2006 and 2018 referencing illicit activity.
As to the Hotel specifically, plaintiff alleged defendants knew it was in a “high-crime area with a known history of reports of sex trafficking,” and she cited two post-trafficking Yelp reviews from 2015 and 2018 describing the Hotel as “a drug/lowlife/prostitute infested pit” and “filled with drug dealers, prostitutes, and homeless people”. She further alleged GP4 staff ignored red flags including cash payments, prepaid cards, requests for fresh linens “multiple times a day,” “heavy foot traffic” of men to her room, and her having “around twenty (20) johns every day”.
Plaintiff brought claims for perpetrator liability against GP4, beneficiary liability against both GP4 and Choice, and vicarious liability against Choice. GP4 moved to dismiss for lack of personal jurisdiction, improper venue, and failure to state a claim. Choice moved to transfer or dismiss.
Decision
The court held that it lacked personal jurisdiction over GP4. Judge Chuang began with the settled principle that personal jurisdiction requires “minimum contacts” such that suit in the forum does not offend “traditional notions of fair play and substantial justice.” Int’l Shoe Co. v. Washington, 326 U.S. 310, 316 (1945). Because general jurisdiction was unavailable, the question was whether there was specific jurisdiction. Specific jurisdiction requires that claims “arise out of or relate to the defendant’s contacts with the forum.” Ford Motor Co. v. Montana Eighth Jud. Dist. Ct., 141 S. Ct. 1017, 1026 (2021).
GP4 had purposefully availed itself of Maryland through its franchise agreement with Choice, signed in Maryland, and the court cited Burger King Corp. v. Rudzewicz, 471 U.S. 462, 479–80 (1985), and Econo Lodges Int’l, Inc. v. Peck, No. 93-1519, 1993 WL 369262, at *2 (4th Cir. Sept. 22, 1993), which found such availment sufficient in contract cases. But the critical problem for plaintiff was that her TVPRA claims did not arise out of that agreement. The court explained:
“Doe’s claims against GP4 do not directly arise from the franchise agreement in that Doe does not allege a breach of that agreement. This case is thus distinguishable from Burger King and Econo Lodges, in which specific jurisdiction was established over a franchisee in the franchisor’s home state when the claims centered on breaches of the franchise agreements themselves”.
Judge Chuang emphasized that the Choice–GP4 agreement “does not reference any policies or procedures relating to combating sex trafficking or mention sex trafficking in any way”. Routine contacts, such as GP4’s payment of monthly franchise fees and use of Choice’s reservation system, were insufficient because they “consist of a franchisee’s routine interactions with a franchisor” and did not create a nexus to the trafficking claims. He noted that to hold otherwise “would sweep too far” by effectively allowing personal jurisdiction “in the franchisor’s home forum over any claim against a franchisee that alleges illegal conduct at a franchisee’s hotel”.
Having found no personal jurisdiction over GP4, the court then addressed venue. Venue in Maryland was improper under 28 U.S.C. § 1391(b)(1) because GP4 did not “reside” in Maryland for jurisdictional purposes. The court also observed that “the primary events underlying the sex trafficking claims occurred in the Middle District of Florida” at the Hotel. Even if some omissions by Choice occurred in Maryland, the core facts and most witnesses were tied to Florida.
Applying the convenience factors under 28 U.S.C. § 1404, the court found transfer appropriate. Plaintiff’s choice of Maryland was entitled to little weight because she was not a Maryland resident and the trafficking occurred elsewhere. Witness convenience strongly favored Florida: “[t]he primary witnesses necessarily include individuals who were present in the Middle District of Florida at the time of the events in question,” including hotel staff and local law enforcement. Non-party witnesses could not be compelled to appear in Maryland under Rule 45. The court concluded:
“Where Doe’s choice of forum is not entitled to substantial weight, the most important factor of witness convenience weighs in favor of transfer, and the interests of justice weigh strongly in favor of transferring this case, the Court will transfer this case to the Middle District of Florida”.
Looking Forward
This ruling offers important guidance for franchisors and franchisees facing TVPRA suits. First, the court’s jurisdictional analysis confirms that a franchise agreement alone does not create nationwide exposure for franchisees. Unless the plaintiff’s claims are tied to obligations in the agreement, routine franchisor–franchisee contacts—like franchise fees and reservation systems—will not establish personal jurisdiction in the franchisor’s home state. This is a crucial defense for franchisees sued outside the state where the alleged conduct occurred.
Second, the venue transfer analysis underscores the strategic value of litigating in the jurisdiction where the underlying events and witnesses are located. For franchisors, it means that cases filed in headquarters’ courts may still be transferred if the claims center on conduct at a distant hotel. As Judge Chuang explained, expanding jurisdiction simply because of the franchise relationship “would sweep too far”.
For franchisors and franchisees, this case demonstrates that early procedural motions—challenging personal jurisdiction and venue—can serve as effective defenses in trafficking litigation. By requiring plaintiffs to litigate where the alleged trafficking occurred, courts may ensure that cases are tied to the factual realities of operations rather than the mere existence of a franchise 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.
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