# J. B. v. Red Roof Inns, Inc.

> District Court, S.D. Ohio · March 28, 2024

URL: https://www.frixlaw.com/law-library/cases/10384361

## Case

- **Court:** District Court, S.D. Ohio
- **Decided:** March 28, 2024
- **Opinion:** 100trialcourt
- **Cited by:** 0 later opinions in the Frix Law Library

## Citator (automated)

- No negative treatment found by the automated citator. That is not the same as a confirmation that the case is good law; read the citing cases.
- Full citator and citing cases: https://www.frixlaw.com/law-library/cases/10384361

## How later opinions describe it (automated extraction)

- explaining that statutes are presumed to embrace the common law extant at their enactment
- finding sufficient allegations that, among other things, the trafficker and hotel owner had prior dealings
- explaining that the traditional rules of statutory construction advise that statutes are presumed not to disturb the common law “unless the language of the statute [is] clear and explicit for this purpose.”
- holding that “the relevant ‘venture’” under Section 1595 need not be ‘specifically a sex trafficking venture’” and can be a “‘commercial venture[]’ like running or expanding a business.”

## Opinion text

IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF OHIO
EASTERN DIVISION

J.B., an individual, :
: Case No. 2:22-cv-3776
Plaintiff, :
: Chief Judge Algenon L. Marbley
v. :
: Magistrate Judge Elizabeth P. Deavers
RED ROOF INNS, INC. AND RED ROOF :
FRANCHISING, LLC, :
:
Defendants. :

OPINION & ORDER

This matter is before this Court on Defendants’, Red Roof Inns, Inc.’s and Red Roof
Franchising, LLC’s, Motion to Dismiss. (ECF No. 22). For the following reasons, Defendants’
Motion to Dismiss is hereby DENIED.
I. BACKGROUND
This case arises under the Trafficking Victims Protection Reauthorization Act (“TVPRA”),
18 U.S.C. § 1595(a). Plaintiff J.B. alleges she was trafficked for sex at the Chattanooga Red Roof
Property (“RRP”) in Chattanooga, Tennessee, a branded property of Red Roof Inns, Inc., and Red
Roof Franchising, LLC (hereinafter together referred to as “Red Roof” or “Defendants”) in July
2017. (ECF No. 1 ¶ 41). Plaintiff alleges Defendants “profited from each and every room that
J.B.’s traffickers and customers rented where J.B. was harbored and maintained for the purpose of
sex trafficking” and from Wi-Fi data collected from the rooms. (Id. ¶ 66). She also alleges that
“to save costs and continually reap millions of dollars in profits, Red Roof generally failed to
create, adopt, implement, and enforce company-wide policies and procedures regarding human
trafficking (or suspected) at the branded properties.” (Id. ¶ 34).
Plaintiff alleges that the hotel staff at the Chattanooga RRP interacted with her repeatedly
and would have been aware that she was bruised and abused. (Id. ¶ 47). J.B. alerted the staff at
the hotel that she was a victim of trafficking, but the office manager ignored her and would not let
her use a phone to request help. (Id. ¶ 50). A staff member who appeared friendly with one of her
traffickers told J.B. that she could not leave her room and threatened to call police if J.B. disobeyed.

(Id. ¶ 51). According to J.B., each stay at the Chattanooga RRP raised “several consistent red
flags,” that should have been obvious to staff, “including, but not limited to: Paying for stays in
cash; Paying for extended stays on a day-by-day basis; Requesting a room away from other guests;
Unusually large numbers of used condoms left in the trash; Frequent requests for linen changes;
Unusually large number of male visitors going in and out of J.B.’s room; Obvious signs of illegal
drug use; Visible signs of prior/private physical abuse; Women wearing clothing inappropriate for
the weather; and Loud noises of abuse or other emergency audible to staff or other rooms.” (Id. ¶
53). Plaintiff also asserts that her trafficker used the hotel’s Wi-Fi to post advertisements for the
sale of her body and communicate with “johns.” (Id. ¶ 43).

Plaintiff now seeks to hold Defendants liable as a beneficiary of their participation in a
commercial venture that they knew, or should have known, violated the TVPRA. Plaintiff
commenced this action in October 2022 (ECF No. 1). In June 2023, Defendants filed a Motion to
Dismiss. (ECF No. 22). Plaintiff has responded, and Defendants replied. (ECF Nos. 31; 33).
Therefore, the Motion is now ripe for review.
II. STANDARD OF REVIEW
This Court may dismiss a cause of action under Federal Rule of Civil Procedure 12(b)(6)
for “failure to state a claim upon which relief can be granted.” Such a motion “is a test of the

2
plaintiff’s cause of action as stated in the complaint, not a challenge to the plaintiff’s factual
allegations.” Golden v. City of Columbus, 404 F. 3d 950, 958–59 (6th Cir. 2005). This Court must
construe the complaint in the light most favorable to the non-moving party. Total Benefits Planning
Agency, Inc. v. Anthem Blue Cross & Blue Shield, 552 F. 3d 430, 434 (6th Cir. 2008). If more than
one inference may be drawn from an allegation, this Court must resolve the conflict in favor of the

plaintiff. Mayer v. Mylod, 988 F. 2d 635, 638 (6th Cir. 1993). This Court cannot dismiss a
complaint for failure to state a claim “unless it appears beyond doubt that the plaintiff can prove
no set of facts in support of his claim which would entitle him to relief.” Id. This Court, however,
is not required to accept as true mere legal conclusions unsupported by factual allegations. Ashcroft
v. Iqbal, 556 U.S. 662, 678 (2009). Although liberal, Rule 12(b)(6) requires more than bare
assertions of legal conclusions. Allard v. Weitzman, 991 F.2d 1236, 1240 (6th Cir. 1993) (citation
omitted). Generally, a complaint must contain a “short and plain statement of the claim showing
that the pleader is entitled to relief.” Fed. R. Civ. P. 8(a)(2). A complaint’s factual allegations
“must be enough to raise a right to relief above the speculative level.” Bell Atl. Corp. v. Twombly,

550 U.S. 544, 555 (2007). It must contain “enough facts to state a claim to relief that is plausible
on its face.” Id. at 570. A claim is plausible when it contains “factual content that allows the court
to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Iqbal,
556 U.S. at 678. Finally, the Complaint should be read as a whole, even if a specific alleged fact
read in isolation appears meaningless. Ricchio v. McLean, 853 F.3d 553, 557 (1st Cir. 2017).

3
III. LAW & ANALYSIS
A. Direct Civil Liability Under the TVPRA § 1595
This Court has undertaken extensive analysis of the issue of civil liability of hotel
defendants in sex trafficking cases under the TVPRA in several cases with many factual
similarities to this one. See e.g., T.P. v. Wyndham Hotels & Resorts, Inc., No. 2:21-cv-04933,

2022 WL 17363234 (S.D. Ohio Dec. 1, 2022); A.C. v. Red Roof, Inc., No. 2:19-cv-4965, 2020 WL
3256261 (S.D. Ohio Jun. 16, 2020); Doe S.W. v. Lorain-Elyria Motel, Inc., No. 2:10-cv-1194,
2020 WL 1244192 (S.D. Ohio Mar. 16, 2020); M.A. v. Wyndham Hotels & Resorts, Inc., 425 F.
Supp. 3d 959 (S.D. Ohio 2019); H.H. v. G6 Hospitality, LLC, No. 2:19-cv-755, 2019 WL 6682152
(S.D. Ohio Dec. 6, 2019).
The TVPRA has two provisions relevant to this case. First, the TVPRA provides for
criminal penalties set forth in 18 U.S.C. § 1591:
(a) Whoever knowingly—

(1) in or affecting interstate or foreign commerce, . . . recruits, entices, harbors,
transports, provides, obtains, advertises, maintains, patronizes, or solicits by any
means a person; or

(2) benefits, financially or by receiving anything of value, from participation in a
venture which has engaged in an act described in violation of paragraph (1),

knowing, or, except where the act constituting the violation of paragraph (1) is
advertising, in reckless disregard of the fact, that means of force, threats of
force, fraud, coercion described in subsection (e)(2), or any combination of such
means will be used to cause the person to engage in a commercial sex act, or
that the person has not attained the age of 18 years and will be caused to engage
in a commercial sex act, shall be punished as provided in subsection (b).

18 U.S.C. § 1591(a). Secondly, and central to Plaintiff’s claim, is the standard for civil
liability under the TVPRA set forth in 18 U.S.C. § 1595:

4
An individual who is a victim of a violation of this chapter may bring a civil action
against the perpetrator (or whoever knowingly benefits, financially or by receiving
anything of value from participation in a venture which that person knew or should
have known has engaged in an act in violation of this chapter) in an appropriate
district court of the United States and may recover damages and reasonable
attorneys fees.

18 U.S.C. § 1595(a).

As a preliminary matter, this Court has held in several cases that § 1595(a) can be a
standalone claim, and civil defendants need not have committed the underlying criminal sex
trafficking offense under § 1591. M.A., 425 F. Supp. 3d at 964; H.H., 2019 WL 6682152 at *2
(citing Cong. Research Serv., R40190, The William Wilberforce Trafficking Victims Protection
Reauthorization Act of 2008 (P.L. 110-457): Criminal Law Provisions, at 16 (Jan. 29, 2009) (the
amendments to the TVPRA “create[ ] civil liability both for those who face criminal liability for
their profiteering and those who do not.”)); Plaintiff A v. Schair, No. 2:11-cv-00145-WCO, 2014
WL 12495639, at *3 (N.D. Ga. Sept. 9, 2014) (the 2008 amendments broadened the parties who
could be sued for trafficking violations from only the perpetrator)). This Court likewise finds that
Plaintiff’s allegation that she is a victim of trafficking under § 1591 is enough to plead sufficiently
that she is “a victim of this chapter” pursuant to § 1595(a) in order to survive a motion to dismiss.
(ECF No. 1 ¶¶ 21, 90).
This Court analyzes Plaintiff’s direct civil liability claim under the “beneficiary theory” of
§ 1595(a). The plaintiff must plead the following in order to survive a Motion to Dismiss under
this theory: (1) the person or entity must “knowingly benefit[], financially or by receiving anything
of value”; (2) from participating in a venture; (3) that the “person knew or should have known has
engaged in an act in violation of this chapter.” § 1595(a). A plaintiff may satisfy these elements

5
by showing that “defendant’s own acts, omissions, and state of mind establish each element.” J.L.
v. Best W. Int’l, Inc., 521 F. Supp. 3d 1048, 1060 (D. Colo. 2021).
1. Knowing benefit
Plaintiff has sufficiently alleged that Defendants “knowingly benefited” financially from a
venture in violation of the TVPRA. Plaintiff alleges that Red Roof profited from the trafficking in

two ways: (1) through renting rooms to Plaintiff’s traffickers; and (2) “from gathering personal
data from the Wi-Fi it provided to customers.” (ECF No. 1 ¶ 27(d)).
As Defendants acknowledge, this Court found in M.A., H.H., and T.P. that “the rental of a
room constitutes a financial benefit from a relationship with the trafficker sufficient to meet this
element of the § 1595(a) standard.” M.A., 425 F. Supp. 3d at 965; H.H., 2019 WL 6682152 at *2.
See also J.L., 521 F. Supp. 3d at 1061 (concluding that allegations that a hotel defendant received
a percentage of room revenue where trafficking occurred, was sufficient to meet the knowingly
benefited element under 18 U.S.C. § 1595(a)); Gilbert v. U.S. Olympic Comm., 423 F. Supp. 3d
1112, 1137 (D. Colo. 2019) (finding the forced labor provision of § 1589(b) does not “require[ ]

the party to benefit from the [forced] labor or services for liability to attach”). Nonetheless,
Defendants contend that mere receipt of room rental revenue is insufficient because: (1) there must
be a causal relationship between the conduct and the receipt of the benefit; and (2) Defendants
must have awareness of the trafficking.
Defendants argue that to plead a “knowing benefit,” Plaintiff must show a “causal
relationship between the affirmative conduct furthering the sex-trafficking venture and receipt of
a benefit, with . . . constructive knowledge of that causal relationship.” (ECF No. 22 at 15-16)
(quoting Geiss v. Weinstein Co. Holdings LLC, 383 F. Supp. 3d 156, 169 (S.D.N.Y. 2019). This

6
Court explained in H.H., however, that “§ 1595(a) imposes no such requirement.” 2019 WL
6682152, at *2. The statutory language simply “requires that Defendant knowingly benefit
financially, not that the perpetrator compensate Defendant ‘on account of’ the sex trafficking
venture.” Id.
Nor must Plaintiff allege actual knowledge of the trafficking to allege that Defendants

“knowingly benefitted.” The statutory language of § 1595(a) “does not impose an actual
knowledge requirement,” it just requires that Defendants knowingly received a financial benefit.
A.C., 2020 WL 3256261, at *4. Therefore, Plaintiff pleads allegations sufficient to meet this
element of the § 1595(a) standard under a theory of benefit through room rental proceeds.
Plaintiff’s contention that Defendants knowingly benefited from “gathering personal data”
from Wi-Fi, however, fares worse. As Defendants point out, Plaintiff fails to allege that
Defendants benefitted financially or received “anything of value” as is required by § 1595(a). (See
ECF No. 24 at 16). Plaintiff makes no effort to explain how this data benefitted Defendants, either
in her complaint or her Response to Defendants Motion to Dismiss. Accordingly, Plaintiff has

failed to plead allegations sufficient to proceed under a theory of benefit through Wi-Fi data.
2. Participation in a venture
Plaintiff has also alleged sufficient facts to demonstrate Defendants’ conduct constituted
“participation in venture” under § 1595(a). This Court has held that participation in a venture
under § 1595 does not require actual knowledge of trafficking crimes but requires “at least a
showing of a continuous business relationship between the trafficker and the hotels such that it
would appear that the trafficker and the hotels have established a pattern of conduct or could be
said to have a tacit agreement.” M.A., 425 F. Supp. 3d at 970 (citing Jean-Charles, 937 F. Supp.

7
2d at 288–89); see also G.G. v. Salesforce.com, Inc., 76 F.4th 544 (7th Cir. 2023) (holding that
“the relevant ‘venture’” under Section 1595 need not be ‘specifically a sex trafficking venture’”
and can be a “‘commercial venture[]’ like running or expanding a business.”); Ricchio, 853 F.3d
at 555 (finding sufficient allegations that, among other things, the trafficker and hotel owner had
prior dealings); Doe S.W., 2020 WL 1244192, at *6–7 (finding allegations that defendant hotels

repeatedly rented rooms to individuals they should have known were traffickers based on the
totality of the circumstances, were sufficient to survive a Rule 12(b)(6) motion); H.H., 2019 WL
6682152, at *4 (same); A.C., 2020 WL 3256261, at *6 (same). Further, participation in a venture
under § 1595 does not require an “overt act.” See e.g., J.L., 521 F. Supp. 3d at 1062; E.S. v. Best
W. Int’l Inc., 510 F. Supp. 3d 420, 427 (N.D. Tex. 2021); M.A., 425 F. Supp. 3d at 968–69; S.J.,
473 F. Supp. 3d at 153–54; Doe S.W., 2020 WL 1244192, *6; J.C. v. Choice Hotels Int'l, Inc.,
2020 WL 3035794, at *1 n. 1 (N.D. Cal. June 5, 2020).
Plaintiff asserts that because Red Roof “owns, supervises, manages, controls, and/or
operates” the Red Roof property at which she was trafficked, it therefore had a continuous business

relationship with the franchisee who rented her traffickers rooms there. (ECF No. 1 ¶ 27). Plaintiff
alleges that Defendants exerted this control over the property through myriad means including
providing reservation platforms, providing training to employees, providing customer review
platforms, and implementing standardized rules of operation. (Id. ¶ 80).
Defendants counter that the hotels are subject to franchise agreements and are owned and
operated by third parties removed from Defendants’ control. (ECF Nos. 22 at 8-13; 33 at 6-9).
They argue that Plaintiff fails to connect Defendants to a venture that violated § 1591(a) beyond
the existence of the franchisor-franchisee relationship. Additionally, Defendants argue that neither

8
their ordinary business dealings—receiving room royalties and providing Wi-Fi—nor a failure to
prevent sex trafficking can constitute “participation.” (ECF Nos. 24 at 8-13; 35 at 6-9).
First, this Court addresses whether a franchisor-franchisee relationship between
Defendants and the hotel operators is too attenuated to support Plaintiff’s claim. Defendants point
to the Eleventh Circuit’s decision, Doe #1 v. Red Roof Inns, Inc., 21 F.4th 714 (11th Cir. 2021),

which this Court has analyzed several times before. See e.g., T.P., 2022 WL 17363234, at *10-
11. In Doe #1, the complaint included allegations that: (1) defendants licensed their brand to
franchisees who paid royalties to the defendants and other fees based on a percentage of their room
revenue; (2) defendants received a percentage of the revenue generated from the rooms in which
trafficking occurred; (3) defendants “owned, managed, supervised, operated, oversaw, controlled
the operation of, and/or were inextricably connected to the renting of rooms” at these hotels; (4)
defendant franchisors investigated incidents of trafficking at the individual hotels and controlled
training related to spotting trafficking; and (5) read online reviews mentioning prostitution and
crime occurring generally at the hotels where plaintiffs were trafficked. Id. at 726. On these

facts—admittedly similar to the ones sub judice—the Eleventh Circuit concluded that plaintiffs
failed to allege that “the franchisors participated in a common undertaking involving risk or profit
that violated the TVPRA.” Id. at 726–27.
But “[k]ey to the court’s reasoning” in Doe #1 “was how the plaintiffs had chosen to define
the alleged venture—specifically as a ‘sex trafficking’ venture.” G.G., 76 F.4th at 561-62
(emphasis added). Here, Plaintiff alleges that Defendants were engaged in “commercial business
ventures” at the property where Plaintiff was trafficked, not that Defendants participated in the sex

9
trafficking. (ECF No. 1 ¶ 27(d)). This critical distinction limits Doe #1’s relevance here. See
G.G., 76 F.4th at 562.
In a similar vein, Defendants’ argument that they cannot be liable for participating in
“ordinary business dealings” is unavailing. As discussed above, the alleged venture “need not be
‘specifically a sex trafficking venture.’” G.G., 76 F.4th at 554. Instead, it can “be a business

whose primary focus is not on sex trafficking.” Id. In G.G., for example, plaintiffs alleged that
the defendant, Salesforce, provided advice and software to Backpage, a now-defunct website that
hosted advertisements posted by the minor plaintiff’s street-level trafficker. Id. at 548. The
Seventh Circuit concluded that the venture there “was Backpage’s business itself, including the
‘growth,’ ‘expansion,’ and profitability of that business.” Id. at 554. Salesforce’s relationship
with Backpage certainly fell within the ambit of its “ordinary business activities,” much like
Defendants’.
Defendants’ argument that they at most observed trafficking, as opposed to participating
in it, is similarly unpersuasive. They complain that Plaintiff is seeking to impose on them an

affirmative duty to seek out and prevent trafficking. (ECF No. 22 at 12-13). As Plaintiff points
out, though, she does not allege mere observation coupled with a failure to intervene. This is not
an attempt at bystander liability. Instead, she alleges that the Defendants “violated the duty
established by the TVPRA: to refrain from ‘knowingly benefit[ing] from ‘participation in a
venture’ that Red Roof knew or should have known violated § 1591.” (ECF No. 31 at 22). Here,
Plaintiff alleges that Defendants: (1) profited from the rooms her traffickers rented and failed to
implement trafficking prevention training programs; (2) collected room reservation, identification,
payment, and sex trafficking website data from the trafficker’s use of hotel Wi-Fi; and (3) had

10
expansive control over franchisee policies and operations but did not use that power to hold the
franchisees accountable. (ECF No. 1 ¶¶ 63-88).
This Court finds that Plaintiff’s allegations that Defendants profited, failed to implement
policies, and maintained expansive control over the hotel operation standards meet § 1595’s
definition of “participation in a venture.” Here, Defendant was involved in a business venture with

the franchisee hotels, and both groups benefitted by renting rooms to traffickers despite having at
least constructive knowledge of ongoing trafficking based on the totality of the circumstances.
Of note, Plaintiff incorrectly argued in her response that Defendants’ actions meet §
1591(e)(4)’s definition of “participation in a venture.” In M.A., this Court not only ruled that the
definition of “participation in a venture” from § 1591(e)(4) was not applicable to § 1595 because
it would inappropriately import a knowledge standard absent in § 1595.1
3. Knew or should have known the venture violated the TVPRA
A defendant cannot be liable under 18 U.S.C. § 1595(a) unless it “knew or should have
known” that the venture from which it benefitted was “engaged in an act in violation of the

TVPRA.” Defendants need not have actual knowledge of trafficking crimes for liability to attach,
as the language of § 1595(a) demonstrates that constructive knowledge is sufficient. M.A., 425 F.
Supp. 3d at 970 (citing Jean-Charles v. Perlitz, 937 F. Supp. 2d 276, 288–89 (D. Conn. 2013)).
This Court has previously held that notice of “the prevalence of sex trafficking generally at their
hotels,” the failure “to take adequate steps to train staff in order to prevent its occurrence,” and
signs that “should have alerted staff to [Plaintiff’s] situation” are sufficient to meet the constructive

1 In that case, plaintiff’s counsel, who also represents Plaintiff in this case, argued as much. While
this oversight is not detrimental to Plaintiff’s allegations, Plaintiff’s Counsel is again reminded to
review this Court’s past rulings as they represent this Court’s interpretation of the TVPRA.

11
knowledge requirement. M.A., 425 F. Supp. 3d at 968. Seeing similar allegations in the case at
hand, this Court reaches the same conclusion.
Plaintiff does not allege that Defendants had actual knowledge, but only constructive
knowledge. She contends: (1) that there were signs of Plaintiff’s trafficking that ought to have
been obvious to hotel staff; and (2) that Defendants, and the hospitality industry more broadly,

have long been aware of the prevalence of human trafficking at their properties but (3) failed to
take action regarding human trafficking.
In response, Defendants raise three issues: (1) that Plaintiff fails to connect several of the
“red flags” described in her complaint to her personal experience; (2) that Plaintiff fails to connect
the “red flags” that do relate to her personally to the franchisor Defendants, as opposed to their
franchisees; and (3) that a generalized awareness of sex trafficking in hotels is insufficient to hold
Defendants liable. (ECF No. 22 at 13-15).
As a threshold matter, Defendant is incorrect that Plaintiff fails to connect her allegations
regarding pays for stays in cash, paying for extended stays on a day-by-day basis, and an unusual

number of male visitors, among other things, to her personally. In fact, Plaintiff alleges
specifically that each stay at the Defendants’ property included an “[u]nusually large number of
male visitors going in and out of J.B.’s room.” (ECF No. 1 ¶ 53). Similarly, Plaintiff alleged that
Red Roof’s employees witnessed condoms in the trash and loud yelling and fighting related to her
trafficking. (Id. ¶¶ 53, 68). Plaintiff alleges she was regularly seen by the same staff, who would
have seen signs that she was being beaten until she bruised. (Id. ¶ 47). In fact, J.B. alerted the
staff at the hotel that she was a victim of trafficking, but the office manager ignored her and would
not let her use a phone to request help. (Id. ¶ 50). A staff member who appeared friendly with

12
one of her traffickers told J.B. that she could not leave her room and threatened to call police if
J.B. disobeyed. (Id. ¶ 51). Particularly when taking all inferences in favor of Plaintiff at this stage,
this Court has little trouble concluding that Plaintiff sufficiently pleads that these issues were part
of her personal experience, not just general allegations.
Having concluded that Plaintiff has sufficiently tied the “red flags” that she alleges to her

own experience, this Court is guided in its analysis of the sufficiency of those “red flags” by two
cases that establish the spectrum on which civil liability under the TVPRA can be found. In
Ricchio v. McLean, the plaintiff alleged that the hotel owner and the trafficker were working
together in a sex trafficking scheme evidenced by a “high-five” while discussing “getting this thing
going again,” a past business relationship between the two, and allegations that one of the hotel
owners had gone to the victim’s room and “had shown indifference to [plaintiff’s] obvious physical
deterioration.” Ricchio, 853 F. 3d at 555. Plaintiff alleged that while “in plain daylight view of the
front office of the motel,” her trafficker “kick[ed] her and force[d] her back toward the rented
quarters when she had tried to escape.” Id. The Court concluded that the defendants “acted, at

least, in reckless disregard” of the nature of the venture for purposes of § 1589 and § 1595. Id. at
557. Conversely, in Lawson v. Rubin, plaintiffs sued Blue Icarus, the owner of a condo that it
leased to Howard Rubin who was procuring women who he then sexually assaulted and abused at
that location. No. 1:17-cv-6404 (BMC), 2018 WL 2012869, at *2 (E.D.N.Y. Apr. 29, 2018). The
court found the plaintiff’s allegations of one police visit after a fight ensued and one ambulance
sent to the residence in six years insufficient to hold Blue Icarus liable under § 1595. The Court
reasoned that even if Blue Icarus had done further investigation following the incidents, it would

13
not have uncovered any more information about the alleged trafficking. Lawson, 2018 WL
2012869, at *13–14.
Plaintiff’s allegations fall somewhere between the fact patterns in Ricchio and Lawson.
This Court has previously concluded that many aspects of Plaintiff’s experience described above
should have alerted staff to her trafficking, including excessive condoms, repeated encounters with

Plaintiff over the course of which she was visibly deteriorating, cash payments from her traffickers,
and frequent male guests. See M.A., 425 F. Supp. 3d at 967; see also T.P., 2022 WL 17363234, at
*8-9.
Defendants next argue that the individual hotel employees’ actual or constructive
knowledge of trafficking is insufficient to impute constructive knowledge on Defendants as
franchisors. (ECF No. 22 at 14-15). But Plaintiff also alleges that Defendants themselves were on
notice about the prevalence of sex trafficking at their hotels and failed to take steps to train staff
to prevent its occurrence. In comparable environments, courts have found failure to implement
policies sufficient to combat a known problem in one’s operations constitutes willful blindness or

negligence. See Burlington Industries, Inc. v. Ellerth, 524 U.S. 742, 758–79 (1998) (holding where
a “supervisor’s sexual harassment is outside the scope of employment because the conduct was for
personal motives,” an employer can still “be liable . . . where its own negligence is a cause of the
harassment” because it “knew or should have known about the conduct and failed to stop it”);
Brown v. Corr. Corp. of Am., 603 F. Supp. 2d 73, 81 (D.D.C. Mar. 26, 2009) (finding that
complaint stated sufficient allegations under § 1983, based on willful blindness, where defendants
knew that a supervisor at a correctional facility raped his employee, sexual harassment at the
facility “was not an isolated incident,” and defendants failed “to implement and effectuate the

14
appropriate policies . . . to remedy and/or prevent the discriminatory conduct, sexual abuse and
sexual harassment and rape”).
The facts specific to Plaintiff’s own sex trafficking, in combination with her allegations
that Defendant franchisors were on notice about the prevalence of sex trafficking at their hotels
yet continued to rent rooms to traffickers and failed to take adequate steps to train staff in order to

prevent its occurrence, together support a conclusion that Defendants had constructive knowledge
of the trafficking occurring at their hotels because they “should have known” about the nature of
the venture under the beneficiary theory’s negligence standard. 18 U.S.C. § 1595. Therefore, this
Court finds that Plaintiff’s allegations are sufficient to meet the negligence standard in § 1595 for
purposes of surviving this Motions to Dismiss.
Because Plaintiff’s allegations meet the three-pronged requirement of 18 U.S.C. § 1595,
Plaintiff has sufficiently stated a claim that Defendants are directly, civilly liable under the
TVPRA. See M.A. 425 F. Supp. 3d at 971–72 (denying motion to dismiss of hotel parent company
defendants where plaintiff pled that defendants controlled employee training, room pricing,

provided online booking platform, and conducted inspections).
B. Joint and Several Liability
Plaintiff argues that all Defendants are jointly and severally liable for her damages under
the TVPRA. (ECF No. 1 ¶ 38). Defendants do not appear to respond to this argument. Therefore,
this Court will consider Defendants to have conceded this point.
C. Vicarious Liability
A plaintiff can also satisfy the elements of § 1595’s beneficiary theory by imputing “to the
defendant the acts, omissions, and state of mind of an agent of the defendant” through indirect or

15
vicarious liability. J.L., 521 F. Supp. 3d at 1060. The TVPRA, however, does not address the issue
of indirect or vicarious liability; therefore, federal district courts that have adjudicated this issue
must apply common law to fill in the gaps. Norfolk Redevelopment and Hous. Auth. v. Chesapeake
and Potomac Tel. Co. of Va., 464 U.S. 30, 35–36 (1983) (explaining that the traditional rules of
statutory construction advise that statutes are presumed not to disturb the common law “unless the

language of the statute [is] clear and explicit for this purpose.”); see also In re Nicole Gas Prod.,
Ltd., 581 B.R. 843, 850 (B.A.P. 6th Cir. 2018), aff’d sub nom., Nicole Gas Prod., Ltd., 916 F.3d
566 (6th Cir. 2019) (explaining that statutes are presumed to embrace the common law extant at
their enactment). In the past, this Court, and other district courts, have applied the state common
law of vicarious liability when addressing indirect liability arguments under the TVPRA. M.A.,
425 F. Supp. 3d at 971 (applying Ohio agency law); see also A.B., 455 F. Supp. 3d at 194–95
(applying Pennsylvania agency law); S.J., 473 F. Supp. 3d at 158–59 (applying New York agency
law). Since this Court’s ruling in 2019, another district court chose to apply the federal common
law of vicarious liability in a TVPRA case. A.B., 484 F. Supp. 3d at 939–40 (citing Ninth Circuit

cases where the court applied the federal common law of agency when the federal statute did not
otherwise provide direction).
As this Court has previously outlined, the Sixth Circuit has yet to rule on whether the
federal or state common law of vicarious liability should be applied under the TVPRA. While this
Court has previously entertained arguments for both given the nearly identical analysis required
under federal and Ohio common law, this Court will proceed under a federal common law analysis
of the issue. This approach brings the analysis in line with the Sixth Circuit’s approach to applying
the federal common law of vicarious liability to federal statutes that do not expressly provide

16
direction on vicarious liability arguments. See e.g., Marr v. Rife, 503 F.2d 735, 740–41 (6th Cir.
1974) (explaining that in determining the extent of liability of the owner of a real estate agency for
violations of Fair Housing Act by his agent, court should apply federal law and should not be
restricted by respondeat superior law or law of vicarious liability of the various states); Keating v.
Peterson’s Nelnet, LLC, 615 Fed. App’x 365, 371–72 (6th Cir. 2015) (citing In the Matter of Dish

Network, LLC, 28 FCC Rcd. 6574, 6584 (May 9, 2013)) (explaining that the FCC concluded that
defendants may be held vicariously liable for statutory violations under federal common law
agency principles, including apparent authority and ratification) but cf. Pension Benefit Guar.
Corp. v. Findlay Indus., Inc., et al., 902 F.3d 597, 611 (6th Cir. 2018) (deciding to apply state
common law to an ERISA contract dispute regarding successor liability because a federal court
may take direction from “the law of the state in which it sits” so long as the standard used “best
comports with the interests served by ERISA’s regulatory scheme,” but explaining that “as a
general matter, the court must look to the federal common law and should draw guidance from
state common law only when federal common law does not provide an established standard”).

1. Agency
The Sixth Circuit relies on the Restatement of Agency when applying the federal common
law of vicarious liability. Johansen v. HomeAdvisor, Inc., 218 F.Supp.3d 577, 586 (S.D. Ohio
2016). Agency is most commonly defined as the “fiduciary relationship that arises when one
person (a ‘principal’) manifests assent to another person (an ‘agent’) that the agent shall act on the
principal’s behalf and subject to the principal’s control, and the agent manifests assent or otherwise
consents so to act.” Restatement (Third) of Agency § 1.01 (2006). A defining element of agency
“is the principal’s right to control the agent’s actions” such as “[t]he power to give interim

17
instructions.” Id. at cmt. f (1); see also Savanna Group, Inc. v. Trynex, Inc., No. 10-C-7995, 2013
WL 4734004, at *5 (N.D. Ill. Sept. 3, 2012) (explaining that “[t]he power to give interim
instruction” is an element that “distinguishes principals in agency relationship from those who
contract to receive services provided by persons who are not agents.”). As a result of that power,
“[a] master is subject to liability for the torts of his servants committed while acting in the scope

of their employment.” Burlington Indus. Inc., 524 U.S. at 755–56 (1998) (quoting Restatement
(Second) of Agency § 219(1) (1957)).
While the mere existence of a franchise does not establish an agency relationship, the
franchise model also does not preclude wholesale franchisors from vicarious liability under an
agency theory. Bricker, 804 F.Supp.2d at 623 (“[T]he existence of a franchisor-franchisee
relationship between persons does not in itself preclude the existence of a principal-agent
relationship between them.”). To determine whether “a principal-agent relationship exists, courts
consider the same factors ‘as in the absence of a franchisor-franchisee relationship.’” Id. (citing
Taylor v. Checkrite, Ltd., 627 F. Supp. 415, 416 (S.D. Ohio 1986)). To succeed under an agency

theory, Plaintiff must show both: (1) that Defendants and their franchisees were in an agency
relationship; and (2) that hotels or hotel staff are plausibly liable under § 1595(a).
Plaintiff alleges that Defendants exercised day-to-day control over the Red Roof franchise
property at issue here. (ECF No. 1 ¶¶ 74-88). Plaintiff argues that this includes requiring
franchisees to, among other things: (1) use Red Roof’s property management system; (2) use Red
Roof’s centralized reservation system; (3) submit to periodic inspections with threat of
termination; (4) gather reservation, payment, and occupancy data through Red Roof’s centralized
system; (5) use approved Wi-Fi and security vendors; (6) comply with Red Roof’s salary

18
schedules; (7) comply with Red Roof’s regulated room rental rates; (8) sharing profits; and (9)
adhering to other brand standards. (Id. ¶ 80). These allegations are sufficient to meet the pleading
standards of Federal Rule of Civil Procedure 8 to demonstrate Defendants’ control over the
franchisee properties for purposes of an agency relationship and vicarious liability.
Defendants also argue that the Complaint lacks allegations sufficient to support a claim

that the franchisee violated the TVPRA, such that their actions can be imputed to their franchisors.
(ECF No. 22 at 20-22). Defendants are correct that for an agency theory of vicarious liability to
apply to Defendants, the hotel franchisees themselves must have committed a wrong to be imputed
on Defendants. See J.L. v. Best W. Int’l Inc., 521 F. Supp. 3d 1048, 1064-65 (D. Colo. 2021).
Accordingly, this Court applies the three-pronged test established by 18 U.S.C. § 1595 and already
used to assess Defendants’ direct liability to the hotel franchisees as well: (1) the person or entity
must “knowingly benefit[], financially or by receiving anything of value”; (2) from participating
in a venture; (3) that the “person knew or should have known has engaged in an act in violation of
this chapter.” § 1595(a).

First, Plaintiff alleges that the franchisees rented rooms to traffickers and financially
benefited from their trafficking ventures, therefore satisfying the first prong. (ECF No. 1 ¶ 27(d)).
Second, Plaintiff has alleged sufficient facts—that franchisee hotels, along with Defendants,
benefited financially from renting rooms to traffickers and should have known trafficking was
going on based on the totality of the circumstances—to meet § 1595’s definition of “participation
in a venture” in a commercial setting that profited from Plaintiff’s sex trafficking. (ECF No. 1 ¶¶
39-62). Third, Plaintiff alleged sufficient facts to demonstrate that employees at the hotel had
constructive knowledge that she was being trafficked; specifically, that staff would have seen

19
many red flags pointing toward trafficking and signs of Plaintiff’s physical deterioration and abuse.
(Id.).
2. Joint Employer Status
Plaintiff argues in her Response that she alleges a second independent theory of vicarious
liability through “joint employment” of hotel staff. Much like agency theory, whether two

employers are a joint employer also often turns on how much control one exercises over the other.
See e.g., Int’l Longshoremen’s Ass’n, AFL-CIO, Local Union No. 1937 v. Norfolk Southern Corp.,
927 F.2d 900, 902 (6th Cir. 1991) (articulating test for joint employer status under the NLRA as
“the interrelation of operations between the companies, common management, centralized control
of labor relations, and common ownership.”); Sanford v. Main Street Baptist Church Manor, Inc.,
327 Fed. App’x 587, 594 (6th Cir. 2009) (adopting the following test for Title VII joint employer
status: “(1) the extent of the employer’s control and supervision over the worker, including
directions on scheduling and performance of work; (2) the kind of occupation and nature of skill
required, including whether skills are obtained in the work place; (3) responsibility for the costs

of operation, such as equipment, supplies, fees, licenses, workplace, and maintenance of
operations; (4) method and form of payment and benefits; and (5) length of job commitment and/or
expectations.”).
While Plaintiff neglects to use the specific words “joint employer” in her Complaint, she
does allege that “Red Roof employees work throughout the Chattanooga RRP by Red Roof.” (ECF
No. 1 ¶ 27(b)). Whether Plaintiff’s joint employer theory succeeds is a very close call. “While
the factors this Court must consider when analyzing both agency and joint employer theories of
vicarious liability are very similar, important among those to establish a joint employer theory of

20
vicarious liability is the control exercised by the franchisor specific to employment policies.”
B.D.G., 2023 WL 5935646, at *10. Ultimately, because Plaintiff does allege that Defendants have
control over several key employment-related policies like training and setting rates of pay, she has
sufficiently pleaded a joint employer theory. See A.R., 2022 WL 17741054, at *11 (finding joint
employer theory of vicarious liability sufficiently pleaded in nearly identical TVPRA litigation
where Plaintiff pled that Wyndham promulgated “policies, procedures, and standards governing
the hiring, training, retention, and advancement of on-the-ground employees and setting their rates
of pay.”).
IV. CONCLUSION
For the foregoing reasons, Defendants’ Motion to Dismiss is hereby DENIED.
IT IS SO ORDERED.

ALGEN@N L. MARBLEY
CHIEF UNITED STATES DISTRICT JUDGE
DATE: March 28, 2024

21

---

Source: Frix Law Library, https://www.frixlaw.com/law-library/cases/10384361. Public record. Not legal advice.