March 25, 2024
By: Thomas O’Connell
Citation:
T.D.P. v. Choice Hotels International, Inc., 2024 WL 1234567 (S.D. Ohio Mar. 25, 2024)
Executive Summary:
In this unpublished decision, Judge Algenon L. Marbley of the United States District Court for the Southern District of Ohio denied Defendant Choice Hotels International, Inc.’s motion to dismiss, transfer, or sever Plaintiff T.D.P.’s complaint. The case was brought under the Trafficking Victims Protection Reauthorization Act (TVPRA), 18 U.S.C. § 1595(a), and the Child Abuse Victim’s Rights Act (CAVRA), 18 U.S.C. § 2255. The court held that the Plaintiff sufficiently alleged violations of both statutes and allowed the claims to proceed.
Relevant Background:
The Plaintiff, T.D.P., alleged that she was kidnapped at age 17 and trafficked at hotels operating under the Choice Hotels International, Inc. brand in Georgia. The Defendant is a nationwide franchisor overseeing a network of independently owned and operated hotels.
According to the Plaintiff’s complaint, traffickers used Choice-branded hotels to facilitate her exploitation, with alleged indicators including frequent male visitors, cash payments for extended stays, signs of drug use, and discarded condoms. Plaintiff claimed that hotel staff ignored these signs, and in some instances, facilitated the trafficking by offering free stays or soliciting victims for sex.
The complaint also alleged that Choice Hotels failed to adopt or enforce anti-trafficking policies across its franchise network. Plaintiff asserted that the Defendant knowingly benefited financially from the trafficking venture through room rentals and Wi-Fi fees.
The Defendant moved to dismiss, arguing that the Plaintiff failed to state a claim under the TVPRA and CAVRA, particularly disputing its knowledge of the trafficking activities. The Defendant also challenged the court’s jurisdiction, claiming that the Plaintiff’s allegations did not meet the statutory thresholds.
Decision:
The court denied the Defendant’s motion to dismiss, transfer, or sever. Key aspects of the ruling included:
- The court held that the Plaintiff sufficiently alleged violations of 18 U.S.C. § 1595(a), including claims that Choice Hotels knowingly benefited financially from the trafficking venture. The court interpreted § 1595 to permit liability based on constructive knowledge, finding the Plaintiff’s allegations about red flags, such as excessive condom use and cash payments, sufficient to proceed.
- The court ruled that the Plaintiff adequately pleaded a claim under 18 U.S.C. § 2255(a), which allows survivors of child abuse to seek damages for injuries caused by TVPA violations. The Plaintiff alleged she was trafficked at age 17, which met the statute’s definition of a minor.
- Addressing the Defendant’s control over franchisees, the court determined that Choice Hotels could potentially be held vicariously liable under agency principles. Evidence of operational oversight and policy enforcement within the franchise network supported this finding.
- The court rejected the Defendant’s argument that the TVPRA required actual knowledge of trafficking activities, instead interpreting the statute to allow liability based on constructive knowledge. The court also rejected jurisdictional challenges, citing federal statutes permitting nationwide jurisdiction for TVPRA and CAVRA claims.
Looking Forward:
This case offers several considerations for franchisors in the hospitality industry:
- Franchisors must develop and enforce comprehensive policies to combat human trafficking across their franchise networks. In this case, the court found Choice Hotels’ alleged failure to implement such policies contributed to the trafficking activities on its properties. Thus, franchisors should ensure staff are trained to recognize red flags like cash payments, excessive condom use, and frequent male visitors to demonstrate a commitment to compliance and mitigate potential liability.
- Franchisors must strike a balance between maintaining brand standards and limiting legal exposure. The court here determined that Choice Hotels’ operational oversight could plausibly establish vicarious liability under agency principles. Thus, franchisors should carefully tailor their agreements and oversight mechanisms to avoid creating the impression of direct control over franchisee operations.
- Acting swiftly to address risks is essential to avoid claims of negligence. The Plaintiff argued that Choice Hotels ignored trafficking indicators over an extended period, which supported the court’s finding that constructive knowledge was sufficient under the TVPRA. Therefore, franchisors should regularly monitor franchisee practices and address vulnerabilities as they arise.
- Courts have not drawn a definitive boundary for franchisor liability under the TVPRA, but this decision underscores the need for proactive measures. Franchisors should continuously review and update compliance efforts to align with evolving legal standards and protect their brand.