B.M. v. Wyndham Hotels & Resorts, Inc.

Background

B.M., who the opinion identifies as a survivor of sex trafficking, sued Wyndham Hotels & Resorts, Inc., Choice Hotels International, Inc., and G6 Hospitality, LLC under Section 1595 of the Trafficking Victims Protection Reauthorization Act. She alleges that she was trafficked for commercial sex as a minor at hotels in Santa Clara County, California, including a Super 8, a Clarion Inn, and a Motel 6. The opinion states that the traffickers rented adjoining rooms at the Super 8 and Clarion Inn for two years and that B.M. and other girls were forced to perform commercial sex acts with numerous men each day.

B.M. alleged that the hotel companies benefited financially from the room rentals and knew or should have known about the trafficking based on warning signs including used condoms and lubricant containers, cash payments, her physical condition, repeated visits by older men, and frequent requests for supplies and room service. She also alleged that Wyndham controlled Super 8 hotels and Choice controlled Clarion Inn hotels sufficiently to create agency and joint-employer relationships. G6 had answered the complaint and was not a movant in this order.

Motions to dismiss

Wyndham moved to dismiss under Federal Rule of Civil Procedure 12(b)(6), which tests whether a complaint states a legally sufficient claim. Choice filed a similar motion and also moved to strike portions of the complaint. Both companies argued that B.M. had not adequately pleaded direct or agency-based liability.

The court held that the criminal-liability definition of “participation in a venture” does not apply to the TVPRA’s civil-liability provision. Therefore, B.M. did not have to allege an overt act furthering the trafficking or the companies’ actual knowledge of the trafficking to state a civil claim at the pleading stage.

The court found that B.M.’s allegations plausibly showed that Wyndham and Choice knowingly received financial benefits from room rentals. But it found the direct-liability theory insufficiently pleaded because the complaint did not connect either company to B.M.’s trafficking at the particular facilities she identified. The allegations about warning signs primarily showed what employees at the individual franchise hotels might have known, not what Wyndham or Choice knew or should have known.

The court reached a different result on the agency theory. It found plausible B.M.’s allegations that Wyndham and Choice exercised ongoing control over their branded hotels, including through employee decisions, wage setting, operating rules, and standardized training. The court also allowed the joint-employer allegations to proceed because the claimed control could satisfy the relevant economic-reality factors at this stage. The court stated that the TVPRA does not require hotels or franchisors to affirmatively stop trafficking, but found that B.M. had adequately alleged that Wyndham and Choice received financial benefits from a venture that vicariously trafficked her.

Motion to strike and pseudonym

Choice sought to strike paragraphs 20 through 61 as irrelevant, impertinent, or scandalous. The court denied that motion, finding that the allegations provided relevant background about sex trafficking and the hospitality industry and were not unduly prejudicial or needlessly salacious.

The court also allowed B.M. to proceed under a pseudonym in public filings. It found that her need for anonymity, given the sensitive nature of the allegations and the fact that she was trafficked as a minor, outweighed the potential prejudice to the defendants and the public interest in knowing her identity. B.M. agreed to disclose her identity to the defendants for purposes of investigating her claims after entry of a protective order.

Disposition

The court’s order took these actions:

- Wyndham’s motion to dismiss was granted in part with leave to amend as to B.M.’s direct-liability theory and denied in part as to her agency-liability theory. - Choice’s motion to dismiss was granted in part with leave to amend as to B.M.’s direct-liability theory and denied in part as to her agency-liability theory. - Choice’s motion to strike was denied. - B.M. was allowed to continue using a pseudonym in public filings.

B.M. had 30 days to file an amended complaint and could amend only her existing claims without adding new claims or parties unless the court granted permission. The court set a further case-management conference for September 18, 2020.