Doe v. Uniquest Delaware, LLC

Background

Jane Doe, proceeding under a pseudonym, alleged that she was a victim of sex trafficking at the Embassy Suites Buffalo, the Hotel Pennsylvania in New York City, and the Boulevard Inn in Amherst, New York. She alleged that her trafficker moved her among hotels and used coercion and violence to make her perform commercial sex services for his financial benefit.

Doe sued eight defendants under the Trafficking Victims Protection Reauthorization Act. Six defendants moved to dismiss for failure to state a claim: Uniquest Hospitality LLC, Brookwood Hospitality LLC, Hilton Franchise Holding LLC, Vornado Realty Trust, Vornado Realty L.P., and 401 Hotel TRS LLC. The two nonmoving defendants were Jai Bhole, Inc. and Rudra MGMT, Inc.

The Act permits a trafficking victim to bring a civil claim against a direct perpetrator and against a person who knowingly benefited financially, or received something of value, from participating in a venture that the person knew or should have known engaged in trafficking. Doe asserted direct-perpetrator claims against five moving defendants and beneficiary-liability claims against all six moving defendants.

Rule 12(b)(6) standard

On a motion under Federal Rule of Civil Procedure 12(b)(6), the court accepts well-pleaded factual allegations as true and asks whether they plausibly show that the plaintiff is entitled to relief. The court does not have to accept legal conclusions presented as factual allegations.

Claims involving the Embassy Suites Buffalo

As to Uniquest, the complaint alleged that it owned, operated, controlled, and/or managed the Embassy Suites Buffalo. The court concluded that the alleged combination of warning signs—including extended stays, restricted housekeeping access, the trafficker’s presence, heavy room traffic, and limitations on Doe’s communication with hotel staff—plausibly supported a beneficiary-liability claim. The allegations were sufficient to suggest that Uniquest knowingly benefited from participating in a venture that it knew or should have known was trafficking Doe.

The court found, however, that the complaint did not plausibly allege that Uniquest had the actual knowledge required for direct-perpetrator liability. The complaint also failed to state direct-perpetrator or beneficiary claims against Brookwood because it did not explain what management services Brookwood provided or how Brookwood could have observed signs of Doe’s particular trafficking. General knowledge that trafficking occurs at lower-priced hotels was insufficient.

The beneficiary claim against Hilton Franchise also failed. Although the complaint alleged that Hilton Franchise operated the reservation system, set front-desk procedures, monitored surveys and complaints, conducted inspections, reviewed online feedback, and knew trafficking was widespread, it did not identify information specific to Doe’s trafficking that reached Hilton Franchise or its employees. No direct-perpetrator claim was asserted against Hilton Franchise.

The court also rejected Doe’s theory that the hotel itself was a venture in which Brookwood and Hilton Franchise participated. The court explained that the complaint still had to plausibly allege that each defendant had actual or constructive knowledge that the undertaking violated the trafficking law as to Doe.

Claims involving the Hotel Pennsylvania

Doe asserted direct-perpetrator and beneficiary-liability claims against Vornado Realty Trust, Vornado Realty L.P., and 401 Hotel TRS LLC. The court found that the complaint improperly grouped the three defendants together and did not distinguish their roles in owning, operating, controlling, managing, or supervising the hotel. Because the complaint did not provide a factual basis showing what any particular defendant did or knew, it failed to plausibly allege the required knowledge for either type of liability.

Vicarious liability

Doe separately asserted that the defendants were vicariously liable for one another’s conduct through agency and alter-ego theories. The court found these allegations conclusory and unsupported by factual details. The court also rejected the allegation that Uniquest and Brookwood were agents of Hilton Franchise because the complaint did not allege the complete control required to treat a franchisee’s independence as only fictional under New York law. The vicarious-liability claims therefore failed to state a claim.

Disposition

The court granted the motions to dismiss as to Brookwood Hospitality LLC, Hilton Franchise Holding LLC, Vornado Realty Trust, Vornado Realty L.P., and 401 Hotel TRS LLC. The court denied Uniquest’s motion as to the beneficiary-liability claim and otherwise granted it. The clerk was directed to terminate docket entries 123, 125, 127, and 129.

Uncertainty in the opinion

The opinion contains inconsistent dates for the alleged trafficking. Earlier portions refer to the Embassy Suites Buffalo period as September to November 2016 and the Hotel Pennsylvania period as November 2013, while a later section refers to the Embassy Suites period as September to November 2013 and the Hotel Pennsylvania period as November 2016. The supplied case name also says “Uniquest Delaware, LLC,” while the opinion caption and body identify the defendant as “Uniquest Hospitality, LLC.”