B.J. v. G6 Hospitality, LLC

Background

B.J.’s Third Amended Complaint asserted one claim against each defendant under the Trafficking Victims Protection Reauthorization Act (TVPRA), 18 U.S.C. § 1595. She alleged that she was trafficked for commercial sex and suffered physical and emotional abuse under duress at five California hotels between 2012 and 2016: Studio 6 Concord, San Ramon Marriott, Residence Inn Concord, Clarion Hotel Concord/Walnut Creek, and Hilton Concord.

The defendants moved to dismiss under Federal Rule of Civil Procedure 12(b)(6), which tests whether a complaint states a legally sufficient claim. The defendants were Hilton Domestic Operating Company Inc.; VWI Concord LLC doing business as Hilton Concord; Interstate Management Company, LLC; Leisure Hotel Group LLC doing business as Clarion Inn; G6 Hospitality, LLC; Concord Inn and Suites LP doing business as Studio 6 Concord; Marriott International, Inc.; Residence Inn by Marriott, LLC; and Choice Hotels International, Inc.

Legal standard and claims

For civil TVPRA liability, the court explained that a plaintiff may proceed under a beneficiary theory or a perpetrator theory. Beneficiary liability requires plausible allegations that the defendant knowingly benefited financially from participating in a venture that the defendant knew or should have known involved sex trafficking. Perpetrator liability requires plausible allegations that the defendant knowingly harbored or maintained a person while knowing that force or fraud would be used to cause commercial sex acts. The court also considered whether franchisors could be held indirectly responsible through actual or apparent agency relationships with franchisees.

Direct beneficiary liability

The court held that B.J. stated a direct beneficiary claim against Concord Inn. B.J. alleged that the Studio 6 manager worked directly with her trafficker, helped sell her for commercial sex, instructed the trafficker on avoiding police detection, arranged discounted rooms and other benefits, alerted the trafficker about police activity, and observed or participated in conduct connected to the trafficking. The court concluded that these allegations plausibly showed a direct association between the hotel and the trafficker and knowledge of the trafficking. It also concluded that the manager’s conduct could be attributed to Concord Inn because it was sufficiently connected to the hotel’s business, and that allegations about other Studio 6 employees supported Concord Inn’s knowledge.

The court also held that B.J. stated a direct beneficiary claim against G6 Hospitality. B.J. alleged that Studio 6 employees observed commercial sex activity and visible signs of abuse and were required under G6 policies to report indications of human trafficking to G6. The court found those allegations sufficient at the pleading stage to support an inference that Studio 6 employees, and therefore G6, knew about the trafficking venture.

The court found the direct beneficiary claims insufficient as to Marriott International, Inc. in its capacity as manager of the San Ramon Marriott; Residence Inn by Marriott, LLC; Leisure Hotel Group LLC; VWI Concord LLC; Interstate Management Company, LLC; Choice Hotels International, Inc.; and Hilton Domestic Operating Company Inc. The court concluded that the allegations did not plausibly show that the relevant hotel defendants knew or should have known they were renting rooms to people engaged in sex trafficking. It also found that the allegations against Marriott, Choice, and Hilton did not plausibly establish their participation in a trafficking venture through reports from franchisee employees.

Vicarious beneficiary liability

B.J. also sought to hold the franchisor defendants indirectly responsible for their franchisees’ alleged violations. The court held that these claims were subject to dismissal. The claims against Marriott, Choice, and Hilton failed because B.J. had not adequately alleged direct liability by their respective franchisees.

As to G6, the court found that allegations about controlling room bookings and payment processing, fixing room prices, and requiring human-trafficking-prevention training did not show the necessary control over the specific source of B.J.’s alleged harm, including the hiring, firing, and compensation of individual employees. The court therefore dismissed the actual-agency theory against G6. It also dismissed the apparent-agency theory because B.J. did not allege that she relied on representations by G6; the complaint instead alleged that her trafficker rented the rooms and brought her there against her will.

Perpetrator liability

B.J. asserted perpetrator liability against the franchisee defendants. The court held that the claim could proceed against Concord Inn because the allegations showed that the Studio 6 manager had actual knowledge of and direct involvement in B.J.’s trafficking, which the court found could be attributed to Concord Inn.

The court dismissed the perpetrator claims against Marriott in its capacity as manager of the San Ramon Marriott, Leisure, VWI, and Interstate. The allegations did not show that those defendants should have known, much less actually knew, about the alleged trafficking.

Disposition

The court’s conclusion states that the defendants’ motions to dismiss were GRANTED in part and DENIED in part: Concord Inn’s motion was DENIED; G6’s motion was DENIED; and the motions of all other defendants were GRANTED. The court also GRANTED B.J.’s motion for administrative relief concerning an amended joint opposition. Although B.J. requested permission to amend again, the court stated that further amendment appeared likely to be futile; the conclusion did not separately state a disposition granting or denying leave to amend.