Doe (S.S.) v. Red Roof Inns, Inc.

IN THE UNITED STATES DISTRICT COURT

FOR THE SOUTHERN DISTRICT OF OHIO

EASTERN DIVISION

Doe (S.S.), :

: Case No. 2:24-cv-01780-ALM-EPD

Plaintiff, :

: JUDGE ALGENON L. MARBLEY

v. :

: Magistrate Judge Elizabeth P. Deavers

RED ROOF INNS, et al. :

:

:

:

Defendants. :

OPINION & ORDER

This matter comes before this Court on Defendants RRF Holding Company, LLC (“RRF

Holding”); RRI West Management, LLC (“RRI West”); Red Roof Franchising, LLC (“RRF”);

and Red Roof Inns, Inc.’s (“RRI”) Motions for Judgment on the Pleadings. (ECF Nos. 23, 24, 25,

26). For the reasons stated below, the motions are GRANTED IN PART to the extent that RRI

Brand Defendants seek dismissal of Plaintiff’s perpetrator claims, and Plaintiff’s perpetrator

liability claim against RRI Brand Defendants is therefore DISMISSED. RRI Brand Defendants’

motions (ECF Nos. 23, 24, 25, 26) are DENIED in all other respects.

I. BACKGROUND

This case arises under the Trafficking Victims Protection Reauthorization Act (“TVPRA”),

18 U.S.C. § 1595(a). Plaintiff S.S. alleges that, from March through April 2017, she was

unlawfully and repeatedly sex trafficked at a Red Roof Inn located at 2200 Corporate Plaza,

Smyrna, Georgia 30080 (“Smyrna RRI”). (ECF No. 1 ¶ 24). During this time, Plaintiff alleges that

she “had visible bruises”; “showed obvious signs of fear and anxiety”; was “kept in a drugged state

by her traffickers” and “frequently yelled at by her trafficker in a way that could be heard by

customers and staff”; and “exhibited obvious signs of disorientation and impairment.” (Id. ¶ 78).

In April 2024, Plaintiff sued the franchisors, managers, and operators of the Smyrna RRI

(“RRI Brand Defendants”);1 and its owner and operator, Varahi Hotel, LLC (“Varahi” or

“Franchisee”), seeking damages under the TVPRA’s civil liability provision. 18 U.S.C. 1595(a).

Plaintiff contends that “RRI Brand Defendants, together with Varahi . . . acted as the joint employer

of [Smyrna RRI] employees because RRI Brand Defendants and Varahi . . . jointly controlled the

terms and conditions of their employment.” (Id. ¶ 107; see also id. ¶ 28 (“At relevant times,

[Franchisee] owned, operated, and managed the subject Red Roof Inn and employed the staff at

the Red Roof Inn through the franchising system of the RRI Brand Defendants.”)). She also

contends that “RRI [Brand] Defendants signed agreements with one another related to the subject

hotels” and “exercised joint control over operations of the subject hotels . . . .” (Id. ¶ 107).

According to Plaintiff, RRI Brand Defendants exercised “systemic and pervasive control

over [Franchisee’s] day-to-day operation” through inspections; compliance monitoring; requiring

that franchisees use centralized reservation, marketing, and credit process systems; dictating

policies related to forms of payment; setting prices and wages; making or influencing employment

decisions; and requiring franchisees to collect guest data through RRI Brand Defendants’ systems,

compile reports, and provide that data to RRI Brand Defendants. (See id. ¶¶ 100, 103). Given the

degree of control and supervision that RRI Brand Defendants maintained over the Smyrna RRI,

Plaintiff asserts that they knew or should have known about Plaintiff’s trafficking based on

“obvious and apparent signs” exhibited through Plaintiff’s interactions with the front desk staff

1 “RRI Brand Defendants” include Red Roof Inns, Inc. (“RRI”); RRF Holding Company, LLC

(“RRF Holding”); Red Roof Franchising, LLC (“RRF”); and RRI West Management (“RRI

West”) which, according to Plaintiff, operated, controlled, and managed the Smyrna RRI. (ECF

No. 1 ¶ 26). Describing the relationship between these entities, Plaintiff alleges that RRI and RRI

West share a common parent company (id. ¶ 15); RRI is the parent company of RRF Holding (id.

¶ 13); and RRI, RRI West, and RRF are corporate affiliates. (Id. ¶ 15).

(id. ¶ 77); incidents in the common areas of the hotel (id. ¶ 78); and the status of her room (id. ¶

80).

As an example, Plaintiff notes that she was never asked for identification at check-in; that

the rooms would be paid for by her trafficker with cash or prepaid cards; and that her traffickers

would check in with little or no luggage. (Id. ¶ 77). Plaintiff also asserts that her appearance and

demeanor should have also alerted staff to her trafficking. She alleges that she was “forced to wear

clothing that was tattered, inappropriate for the weather, sexually suggestive, and inappropriate for

her and age the circumstances”; that she “appeared malnourished and sleep deprived”; that she

“had visible bruises”; and that she showed “signs of fear and anxiety” and “disorientation and

impairment” as she was “kept in a drugged state by her traffickers.” (Id. ¶ 78). According to

Plaintiff, hotel staff observed the “constant and heavy foot traffic” in and out of her room

“involving men who were not hotel guests” and who “entered and left her room at unusual times

and stayed for brief periods.” (Id. ¶ 78). She also alleges that she was “frequently yelled at by her

trafficker in a way that could be heard by customers and staff”; that she was required by her

traffickers “to order excessive additional towels and sheets at varying times of the day or night”;

that she was “confined to her room for excessively long periods without leaving”; and that the “Do

Not Disturb” sign was kept on her door “an unusual amount.” (Id. ¶ 80). When hotel staff would

enter her room, Plaintiff notes they found it “littered with used condoms and other sex

paraphernalia” as well as “obvious signs of illegal drug use . . . .” (Id.).

Plaintiff’s complaint, filed on April 15, 2024, asserts claims under the TVPRA against RRI

Brand Defendants and Varahi for perpetrator liability, beneficiary liability, and vicarious liability.

(ECF No. 1 ¶¶ 111–131). On July 15, 2024, each of the RRI Brand Defendants filed an answer

(ECF Nos. 18, 19, 20, 21) and moved for judgment on the pleadings. (ECF Nos. 23, 24, 25, 26).

On August 5, 2024, Plaintiff opposed the motions for judgment on the pleadings in a single brief.

(ECF No. 28). On September 9, 2024, RRF Holding, RRI West, and RRI jointly replied (ECF No.

38), while RRF filed a separate reply (ECF No. 39). RRI Brand Defendants’ motions are now ripe

for review.

II. STANDARD OF REVIEW

Pursuant to Federal Rule of Civil Procedure 12(c), “[a]fter the pleadings are closed--but

early enough not to delay trial--a party may move for judgment on the pleadings.” Fed. R. Civ. P.

12(c). Courts apply the same analysis to motions for judgment on the pleadings under Rule 12(c)

as motions to dismiss under Rule 12(b)(6). Roe v. Amazon.com, 170 F. Supp. 3d 1028, 1031 (S.D.

Ohio 2016) (citing Warrior Sports, Inc. v. Nat’l Collegiate Athletic Ass’n, 623 F.3d 281, 284 (6th

Cir. 2010)), aff’d, 714 F. App’x 565 (6th Cir. 2017).

To withstand a motion for judgment on the pleadings, the complaint “must plead ‘sufficient

factual matter’ to render the legal claim plausible, i.e., more than merely possible.” Fritz v. Charter

Twp. of Comstock, 592 F.3d 718, 722 (6th Cir.2010) (quoting Ashcroft v. Iqbal, 556 U.S. 662

(2009)). When ruling on a Rule 12(c) motion, “all well-pleaded material allegations of the

pleadings of the opposing party must be taken as true, and the motion may be granted only if the

moving party is nevertheless clearly entitled to judgment.” JPMorgan Chase Bank, N.A. v. Winget,

510 F.3d 577, 581–82 (6th Cir. 2007) (citation omitted). A court, however, need not accept as true

“legal conclusion[s] couched as a factual allegation[s],” and mere recitations of the elements of a

cause of action are insufficient. Hensley Mfg. v. ProPride, Inc., 579 F.3d 603, 609 (6th Cir.2009)

(quoting Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555 (2007)).

In resolving a Rule 12(c) motion, a court considers the pleadings, which consist of the

complaint, the answer, and any written instruments attached as exhibits. See Roe, 170 F. Supp. 3d

at 1031 (citing Fed. R. Civ. P. 12(c); Fed. R. Civ. P. 7(a) (defining “pleadings” to include both the

complaint and the answer); Fed. R. Civ. P. 10(c) (stating that “[a] copy of a written instrument that

is an exhibit to a pleading is part of the pleading for all purposes”)). A motion for judgment on the

pleadings is granted “when no material issue of fact exists and the party making the motion is

entitled to judgment as a matter of law.” JPMorgan, 510 F.3d at 581–82 (citation omitted).

III. LAW & ANALYSIS

Although this Court has extensively analyzed the civil liability of hotel defendants in

TVPRA sex trafficking cases, see S.R., 2024 WL 3226126, at *2 (collecting cases), it has not yet

had occasion to consider the question in the context of a Rule 12(c) motion. But as explained

above, a Rule 12(c) motion for judgment on the pleadings raising the defense of failure to state a

claim is assessed under largely the same standard as a Rule 12(b)(6) motion. Morgan v. Church’s

Fried Chicken, 829 F.2d 10, 11 (6th Cir. 1987).

In her complaint, Plaintiff charges RRI Brand Defendants and Varahi with violations of the

TVPRA’s civil provision, which provides:

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 the statutory text makes clear, Section 1595 creates two kinds of civil

liability: perpetrator liability and beneficiary (or participant) liability. G.G. v. Salesforce.com, Inc.,

76 F.4th 544, 552–53 (7th Cir. 2023). To establish a “violation of this chapter” under Section

1595(a), sex trafficking victims look to 18 U.S.C. § 1591, the provision of the TVPRA that sets

forth criminal penalties for sex trafficking. Section 1591 provides:24-1780

(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).

The thrust of RRI Brand Defendants’ argument is that they cannot be held liable under the

TVPRA because Varahi, as an independent franchisee, owned, operated, and controlled the Smyrna

RRI. (Id.). RRI Brand Defendants move for judgment on the pleadings arguing that Plaintiff’s

allegations cannot state a perpetrator or beneficiary claim under the TVPRA. RRI Brand

Defendants also reject Plaintiff’s theory of vicarious liability; RRI, RRI West, and RRF Holding

assert that they “had no relationship with Varahi or any hotel employee, let alone one sufficient to

establish agency as a matter of law.” (ECF No. 23 at 2; ECF No. 24 at 2; ECF No. 26 at 2). RRF,

on the other hand, argues that its “franchisor-franchisee relationship with Varahi is not enough

standing on its own to establish agency as a matter of law.” (ECF No. 25 at 2). This Court first

examines the sufficiency of Plaintiff’s allegations to support RRI Brand Defendants’ direct liability

under both a perpetrator theory and beneficiary theory of the TVPRA, and then their indirect or

vicarious liability for TVPRA violations.

A. Direct Liability

As a threshold consideration, this Court notes that a civil claim under Section 1595(a) can

be a standalone claim, and defendants need not have committed the underlying criminal sex

trafficking offense under Section 1591 for a plaintiff to maintain an action under Section 1595(a).

See M.A. v. Wyndham Hotels & Resorts, Inc., 425 F. Supp. 3d 959, 964 (S.D. Ohio 2019); G.G.,

76 F.4th at 553 n.4 (“Courts unanimously agree that a civil defendant under Section 1595 need not

have violated Section 1591.”) Additionally, Plaintiff’s allegation that she is “a victim of sex

trafficking within the meaning of § 1591” (ECF No. 1 ¶ 9) is sufficient, at the pleading stage, to

establish that she is a “victim of a violation of this chapter” under 18 U.S.C. § 1595(a).

1. Perpetrator Liability

Plaintiff first asserts that RRI Brand Defendants are liable as “perpetrators” of 18 U.S.C

§1591(a) violations. (ECF No. 1 ¶¶ 113–14). To survive a motion for judgment on the pleadings

on this claim, the Complaint must plausibly allege that RRI Brand Defendants knowingly and in

interstate or foreign commerce either: (a) recruited, enticed, harbored, transported, provided,

obtained, maintained, patronized, or solicited a person; or (b) benefitted from knowingly assisting,

supporting, or facilitating, the recruiting, enticing, harboring, transporting, providing, obtaining,

maintaining, patronizing, or soliciting of a person. 18 U.S.C. § 1591. Plaintiff must also plead

sufficient facts to establish that RRI Brand Defendants knew “that means of force, threats of force,

fraud . . . or any combination of such means will be used to cause the person to engage in a

commercial sex act.” 18 U.S.C. § 1591. As this Court recognized in M.A., Section 1591’s

knowledge standard is much higher than the “should have known” standard required for

beneficiary liability. M.A., 425 F. Supp. 3d at 966; see also Acevedo v. Exp. Realty, LLC, 713 F.

Supp. 3d 740, 764–65 (C.D. Cal. 2024).

RRI Brand Defendants argue that Plaintiff’s allegations fail to show that RRI Brand

Defendants “perpetrated” Plaintiff’s sex trafficking, “let alone had actual knowledge of the same.”

(ECF No. 23 at 2; ECF No. 24 at 2; ECF No. 25 at 2; ECF No. 26 at 2). Plaintiff retorts that her

allegations “support an inference that hotel staff and management had actual knowledge of, or at

least were willfully blind to the trafficking at the Smyrna RRI and yet participated in harboring her

and facilitating her trafficking.” (ECF No. 28 n. 19 (citing ECF No. 1 ¶¶ 76–77, 82–85)). The

allegations Plaintiff points to, however, discuss “obvious and apparent signs of trafficking” that

hotel staff must have observed when interacting with Plaintiff and “the risks, known to them, of

human trafficking.” (See ECF No. 1 ¶¶ 76–82). These facts, taken as true, are still not enough to

support an inference of actual knowledge. See M.A., 425 F. Supp. 3d at 967–68 (holding that

plaintiff’s allegations “that the front desk staff saw her with her trafficker”; observed “that the

trafficker paid for the room in cash”; and that hotel staff “ignored” her screams for help could not

establish actual knowledge).

Plaintiff’s argument to the contrary misses the mark. She contends that RRI Brand

Defendants’ “familiar[ity]” with the population of traffickers at the hotel and “implicit[]

encourage[ment]” of their illegal activities constitute “harboring under § 1591(a)(1) and knowing

facilitation of a trafficking venture under § 1591(a)(2) consistent with a criminal violation.” (ECF

No. 28 n. 19). She cites several cases in support of her position, but those cases are distinguishable.

RRI Brand Defendants argue that the Complaint fails to allege that they had “actual

knowledge” of S.S.’s trafficking. Plaintiff retorts that her allegations “support an inference that

hotel staff and management had actual knowledge of, or at least were willfully blind to the

trafficking at the Subject RRIs and yet participated in harboring her and facilitating her

trafficking.” (ECF No. 30 at 15 n. 23) (citing ECF No. 1 ¶¶ 76–77, 82–85). She cites several cases

in support of her position, but those cases are distinguishable.

In Canosa v. Ziff, for example, the court held that the plaintiff sufficiently alleged that

Harvey Weinstein’s “TWC Companies” violated 18 U.S.C. § 1591 by “actively participat[ing] in

the recruitment and enticement of women, knowing that those women would—or would likely—

be coerced by Weinstein into engaging in what amounted to a commercial sex act with him.” No.

18 CIV. 4115 (PAE), 2019 WL 498865, at *23 (S.D.N.Y. Jan. 28, 2019). There, the complaint

alleged that “the TWC Companies maintained women on their payroll whose responsibilities

including introducing Weinstein to young women and covering up his assaults”; “the TWC

Companies knew that Weinstein’s recurrent practice—indeed, pattern—was to lure women like

Canosa into pretextual meetings and then subject them to forced sexual acts[] [but] . . . nevertheless

continued to pay for and facilitate Weinstein’s interstate and foreign travel, on which trips some

assaults, including of [Plaintiff], occurred”; “employees of the TWC Companies gave Weinstein

the medications he required to perform sexual acts and cleaned up after his sexual assaults”; and

“the TWC Companies expressly or tacitly linked tangible job benefits to the commission of the

forced sexual advances and sexual assaults aforesaid.” Id. The facts alleged in Canosa therefore

directly link the entities and the trafficker in a way that Plaintiff’s allegations do not here.

Likewise, in United States v. Bhimani, No. CR 3:17-324, 2021 WL 5179196

(M.D. Pa. Nov. 8, 2021), the court upheld the criminal liability of a motel owner and its general

manager under the TVPRA based on “ample evidence” showing that the general manager

“knowingly rented rooms to drug and sex traffickers, gave discounts, hired drug dealers and users

to work at the hotel, did not fire them once they learned about drug activity, allowed criminal

guests to check in under assumed names, allowed guests to check in without showing

identification, refrained from kicking guests out despite disruptive, criminal behavior, and allowed

criminals to stay and work out of their room and pay the room rate with the proceeds.” Id. at *9.

Although Plaintiff here alleges that RRI Brand Defendants and hotel staff were “willfully blind”

to her sex trafficking, she fails to allege sufficient facts to support such an inference or other facts

that resemble the circumstances in Bhimani. The case is of even less import, given that it was a

criminal case and the facts there were considered under a different procedural posture.

Finally, Ricchio v. McLean, 853 F.3d 553 (1st Cir. 2017) does not compel a different

conclusion. There, the First Circuit reversed the dismissal of a TVPRA claim against motel

operators and a motel owner where the complaint alleged that the motel operators had prior

commercial dealings with the trafficker and intended to reinstate these dealings for profit “in

circumstances in which [the trafficker’s] coercive and abusive treatment of [the victim] as a sex

slave had become apparent” to the motel operators. Id. at 555. The allegations in Ricchio included

a “high-five” while discussing “getting this thing going again,” a past business relationship

between the trafficker and hotel owner, and allegations that one of the hotel owners had gone to

the victim’s room and “had shown indifference to Ricchio’s obvious physical deterioration.” Id.

Ricchio 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.

Although Plaintiff contends that RRI Brand Defendants’ “familiar[ity]” with the population of

traffickers at the hotel and “implicit[] encourage[ment]” of their illegal activities constitute

“harboring . . . and knowing facilitation” (ECF No. 30 at 22 n. 19), her allegations “do not rise to

the level of obviousness present in Ricchio.” See M.A., 425 F. Supp. 3d at 966. Nor do the facts

alleged “suggest a direct agreement between her trafficker and any of the hotel defendants,” or

“that a specific hotel staff member saw her in a deteriorated state.” Id.

In addition to being less overt, Plaintiff’s allegations here hew more closely to legal

conclusions than factual allegations. See e.g., ECF No. 1 ¶ 116 (“Despite the fact that Defendants

knew or should have known that Jane Doe (S.S.) was being sex trafficked in violation of the

TVPRA . . . .”). Because this Court is “not bound to accept as true a legal conclusion couched as

a factual allegation,” Twombly, 550 U.S. at 555; Iqbal, 556 U.S. at 679 (legal conclusions “must

be supported by factual allegations”), the bare contention that RRI Brand Defendants actually

knew that Plaintiff was being trafficked, without more, is insufficient.

Absent any facts to suggest that RRI Brand Defendants possessed actual knowledge of

S.S.’s trafficking, Plaintiff’s perpetrator claim fails as a matter of law. Accordingly, this Court

GRANTS IN PART the motions for judgment on the pleadings (ECF Nos. 23, 24, 25, 26) with

respect to Plaintiff’s perpetrator liability claim and DISMISSES that claim against RRI Brand

Defendants.

2. Beneficiary Liability

Plaintiff’s claim under the TVPRA’s beneficiary theory of liability, which does not require

actual knowledge, fares better. To survive a Rule 12(c) on this claim, the Complaint must plausibly

allege that: (1) RRI Brand Defendants “knowingly benefitted, financially or by receiving anything

of value”; (2) from participating in a venture; (3) that they “knew or should have known [] engaged

in an act in violation of [the TVPRA].” § 1595(a). As this Court noted in Doe, “a plaintiff may

satisfy these elements by showing that ‘defendant’s own acts, omissions, and state of mind

establish each element.’” See Doe v. Best W. Int’l, Inc., No. 2:23-CV-3459, 2024 WL 3759761, at

*4 (S.D. Ohio Aug. 12, 2024) (quoting J.L. v. Best W. Int’l, Inc., 521 F. Supp. 3d 1048, 1060 (D.

Colo. 2021)).

RRI Brand Defendants argue that the Complaint fails to allege that they “[p]articipated in

a venture with Plaintiff’s alleged trafficker”; that they had actual or constructive knowledge that

“Varahi was allegedly renting rooms to Plaintiff’s alleged trafficker”; or that they “knowingly

benefitted from participating in a venture that committed sex trafficking as to Plaintiff.” (ECF No.

23 at 2; ECF No. 24 at 2; ECF No. 25 at 2; ECF No. 26 at 2).

a. “Knowing Benefit

The “knowing benefit” element merely requires that RRI Brand Defendants knowingly

receive a financial benefit, not that RRI Brand Defendants have actual knowledge of an illicit

venture. A.C., 2020 WL 3256261, at *4. As this Court found in M.A., “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; accord H.H. v. G6 Hosp., LLC, No. 2:19-

CV-755, 2019 WL 6682152, at *2 (S.D. Ohio Dec. 6, 2019); 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 knowing benefit element under 18 U.S.C. §

1595(a)); Gilbert v. U.S. Olympic Comm., 423 F. Supp. 3d 1112, 1137 (D. Colo. 2019) (finding

that the forced labor provision of § 1589(b) does not “require[ ] the party to benefit from the

[forced] labor or services for liability to attach”).

Because Plaintiff alleges that RRI Brand Defendants rented rooms to her traffickers and

benefited financially from those rentals (ECF No. 1 ¶¶ 85, 108, 119), Plaintiff’s allegations are

enough to satisfy the element of “knowing benefit” under Section 1595(a).

b. “Participated in a venture”

Plaintiff has also alleged sufficient facts to establish that Defendants’ conduct constitutes

“participation in a venture” under Section 1595(a). As this Court held in M.A., Defendants need

not have actual knowledge of the sex trafficking or perform an overt act to have “participated” in

a sex trafficking venture for TVPRA liability to attach, “otherwise the ‘should have known’

language in § 1595(a) would be meaningless.” 425 F. Supp. 3d at 971; see also G.G., 76 F.4th 544

(participation under TVPRA’s civil remedy provision does not require direct participation, criminal

violation of TVPRA, or actual knowledge of criminal wrongdoing); A.B. v. Hilton Worldwide

Holdings Inc., 484 F. Supp. 3d 921, 937 (D. Or. 2020) (agreeing with this Court’s reasoning in

M.A. that a plaintiff is “not required to allege actual knowledge of a sex trafficking venture or the

performance of an overt act in order to sufficiently plead the ‘participation in a venture’ element

of her § 1595 claim”).

Plaintiff, however, “must allege 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.” See M.A., 425 F.

Supp. 3d at 970 (citing Jean-Charles v. Perlitz, 937 F. Supp. 2d 276, 288–89 (D. Conn. 2013)).

S.S.’s allegations here—that RRI Brand Defendants were received financial benefits by renting

rooms to Plaintiff’s traffickers—satisfies the “participation in a venture” element. (See ECF No. 1

¶ 119).

Resisting this conclusion, RRI Brand Defendants argue that “[l]egitimate and routine

commercial operations cannot constitute participation in a venture that violates the TVPRA.” (See

e.g., ECF No. 23 at 7). In support, they cite the Eleventh Circuit’s decisions in Doe #1 v. Red Roof

Inns, Inc., 21 F. 4th 714 (11th Cir. 2021) and K. H. v. Riti, Inc., No. 23-11682, 2024 WL 505063

(11th Cir. Feb. 9, 2024). In Doe # 1, the Eleventh Circuit held that the Section 1595(a) beneficiary

claims against hotel franchisors failed because the plaintiffs “provided no plausible allegations that

the franchisors took part in the common undertaking of sex trafficking.” Doe #1, 21 F. 4th at 721

(emphasis added). According to the Eleventh Circuit, the Does’ allegations “that the franchisors

sent inspectors to the hotels who would have seen signs of sex trafficking and that they received

reviews mentioning sex work occurring at the hotels” were insufficient because “observing

something is not the same as participating in it.” Id. Riti likewise rejected a similar claim,

reiterating that “allegations of financial benefit alone are not sufficient to establish that the

defendant participated in a sex trafficking venture and observing signs of sex trafficking is not the

same as participating in it.” Riti, 2024 WL 505063, at *4 (emphasis added).

But both Doe and Riti analyzed the plaintiffs’ claims that defendants participated in a sex-

trafficking venture, not a commercial venture, which S.S. pleads here. (See ECF No. 1 ¶ 109

(explaining that “RRI Brand Defendants also knowingly received a financial benefit by engaging

in a venture with Varahi Hotel, LLC”). In Doe #1, the Eleventh Circuit recognized that its analysis

may have been different if the plaintiffs had pled the hotel franchisor defendants had participated

in commercial ventures operating the hotel rather than alleging that they only participated in sex-

trafficking ventures. 21 F.4th at 727. The Doe #1 plaintiffs, however, had not done so and had

refused an opportunity to amend. Id. Thus, neither Doe #1 nor Riti applies to the commercial

ventures inferred from Plaintiff’s factual allegations. See C.T., 2023 WL 3510879, at *4 (“Since

this case finds itself in waters the Eleventh Circuit declined to wade in, Doe #1 is not

determinative.”); A.R. v. Wyndham Hotels & Resorts, Inc., No. 2:21-CV-04935, 2022 WL

17741054, at *7 (S.D. Ohio Dec. 16, 2022) (because plaintiff “alleges that Defendant ‘participated

in a commercial business venture under § 1595[ ] by receiving royalties from Plaintiff’s traffickers

renting rooms at their branded locations,’” the Eleventh Circuit’s decision in Doe # 1 “is not

controlling”). Indeed, the Eleventh and Seventh Circuits have recognized that the relevant

“venture” under Section 1595 need not be “specifically a sex trafficking venture” and can instead

be a “commercial venture” like running or expanding a business that facilitates sex trafficking. See

G.G. v. Salesforce.com, Inc., 76 F.4th 544, 554 (7th Cir. 2023) (citing Doe #1, 21 F.4th at 727).

Plaintiff’s allegations raise a plausible inference that RRI Brand Defendants participated

in hotel-operating commercial ventures that rented rooms to people that RRI Brand Defendants

should have known were engaged in sex trafficking. (See e.g., ECF No. 1 ¶ 107 (noting that “there

is a high degree of interrelation of operations and profit sharing” between RRI Brand Defendants

and Varahi); id. ¶ 119 (“RRI Brand Defendants received benefits in the way of management fees,

royalty fees, reservation fees, marketing fees, and other ancillary fees from the operation of the

[RRI Smyrna].”)). The Complaint therefore satisfies the “participation in a venture” requirement.

See M.A., 425 F. Supp. 3d at 968 (defendant who continues an ongoing business relationship with

traffickers, including by continuing to rent rooms to them, after the defendant should know that

the business relationship facilitates trafficking, participates in a §1595(a) venture); A.R., 2022 WL

17741054, at *7 (recognizing defendant’s “business venture with the franchisee hotels” as

sufficient to show participation in a venture under Section 1595); T.P., 2022 WL 17363234, at *11

(recognizing this theory of venture).

c. “Knew or should have known” that 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 was engaged in sex trafficking. Unlike a perpetrator claim, RRI Brand

Defendants need not have actual knowledge of trafficking crimes for beneficiary liability to attach,

as the “should have known” language in Section 1595(a) permits constructive knowledge. M.A.,

425 F. Supp. 3d at 970 (citing Jean-Charles, 937 F. Supp. 2d at 288–89).

RRI Brand Defendants’ arguments that Plaintiff fails to satisfy this element are multi-fold.

First, they argue that any signs allegedly observed by Smyrna RRI employees—e.g., Plaintiff’s

traffickers using prepaid cards; condoms or lubricant left in the hotel rooms after check-out; heavy

foot traffic in and out of Plaintiff’s room; and Plaintiff dressing provocatively—do not “plausibly

suggest that Varahi knew or should have known Plaintiff was allegedly being trafficked[,] let alone

[RRI Brand Defendants].” (ECF No. 23 at 9–10; ECF No. 24 at 10; ECF No. 25 at 9; ECF No. 26

at 9). “At most,” RRI Brand Defendants contend, these are “signs of prostitution, not sex

trafficking.” (ECF No. 23 at 10 n. 3; ECF No. 24 at 10 n. 3; ECF No. 25 at 9 n.3; ECF No. 26 at 9

n. 3). Second, they argue that Plaintiff has not alleged that any of the RRI Brand entities’

employees, as opposed to Smyrna RRI hotel staff, observed any of the alleged red flags. (ECF No.

23 at 10; ECF No. 24 at 10; ECF No. 25 at 10; ECF No. 26 at 10). Third, RRI Brand Defendants

emphasize that “[b]road allegations of sex trafficking in the hotel industry do not allege that [RRI

Brand Defendants] had knowledge that this Plaintiff was subject to trafficking at a particular

hotel.” (ECF No. 23 at 11; ECF No. 24 at 11; ECF No. 25 at 10; ECF No. 26 at 11). Finally,

according to RRI Brand Defendants, Plaintiff cannot establish constructive knowledge “by listing

customer reviews and news articles about various Red Roof branded properties not at issue here.”

(ECF No. 23 at 11; ECF No. 24 at 11; ECF No. 25 at 11; ECF No. 26 at 11).

RRI Brand Defendants’ reading of the Complaint misses key factual allegations. For one,

in addition to the signs RRI Brand Defendants reference, Plaintiff alleges that hotel staff observed

effects on her appearance and demeanor from the coercion she was being subjected to, including

visible bruising, signs of fear and anxiety, being yelled at by her trafficker in a manner audible to

customers and staff. (ECF No. 1 ¶ 78). These allegations take Plaintiff’s claim outside what might

constitute consensual commercial sex acts, and into the coerced sex trafficking territory prohibited

by the TVPRA. For this reason, and as explained below, the cases on which RRI Brand Defendants

rely are inapposite. (See e.g., ECF No. 25 at 10–11 n. 3).

In J.B. v. G6 Hosp., for example, the plaintiff described instances when she was either in a

car in the parking lot or in rented rooms to argue that motel staff “should have been aware” that

she was being trafficked. No. 19-CV-07848-HSG, 2020 WL 4901196, at *10 (N.D. Cal. Aug. 20,

2020) (emphasis added). The plaintiff, however, had noted that the car windows were covered up

and “never allege[d] that she saw or approached employees with or without her trafficker.” (Id.).

Finding the allegations insufficient, the court contrasted the case with M.A., where a sex trafficking

victim alleged that she had “visible physical changes, such as bruising, . . . and that [d]espite her

desperate pleas and screams for help, after being beaten or choked at the Defendants’ hotel

properties, the hotel staff ignored her . . . .” M.A., 425 F. Supp. 3d at 962. Although a plaintiff need

not allege facts as egregious as M.A. to state a claim, the court in J.B. noted that “allegations that

the victim sought help and was seen by employees with physical injuries or other facts suggesting

coercion allow courts to infer that motel or hotel employees should have known that human

trafficking was occurring, as opposed to other criminal conduct, such as prostitution.” J.B., 2020

WL 4901196, at *10.

Likewise, in A.B. v. Hilton Worldwide Holdings Inc., the court acknowledged that “factual

allegations listing indicia of trafficking (i.e., condition of the hotel room, frequent male visitors)

may support a theory that a hotel where Plaintiff was trafficked knew or should have known of

Plaintiff’s trafficking.” 484 F. Supp. 3d at 938–39. The plaintiff there though “merely allege[d]

that she repeatedly ‘encountered’ the same hotel staff who paid no attention to her”; she did not

allege “she had prominent bruises, brandings, or other visible injuries.” Id. at 941. The court

therefore concluded that the allegations could not show that the hotels should have known that

plaintiff’s commercial sex acts were a result of fraud, force, or coercion. Id. at 941.

Unlike the allegations in those cases, the facts pled here support a plausible inference that

hotel staff should have known that Plaintiff was being coerced into commercial sex acts. Even if

the knowledge of on-the-ground hotel staff cannot be imputed to RRI Brand Defendants, Plaintiff’s

allegations that RRI Brand Defendants—through on-site employees, surveillance footage,

inspections of the hotel property, and monitoring of online reviews (ECF No. 1 ¶¶ 68, 72)—should

have known that Plaintiff was being sex trafficked are enough to survive a Rule 12(c) motion.

As this Court has previously held, a hotel defendant’s 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” satisfy

the constructive knowledge requirement at the pleading stage. M.A., 425 F. Supp. 3d at 968. In

comparable environments, this Court has also rejected arguments that hotel defendants “must have

had knowledge or constructive knowledge with respect to Plaintiff specifically and that a

generalized awareness of sex trafficking in its low-cost hotels is insufficient.” See T.D.P. v. Choice

Hotels Int’l, Inc., 725 F. Supp. 3d 784, 798–99 (S.D. Ohio 2024) (explaining that “the express

terms of [18 U.S.C. § 1595] impose liability for benefiting from a venture that the Defendant knew

or should have known was engaged in violations of § 1591, not violations of § 1591 with respect

to a particular person.”); Doe (R.A.) v. Best W. Int’l, Inc., No. 2:23-CV-3459, 2024 WL 3850958,

at *7 (S.D. Ohio Aug. 16, 2024) (“Plaintiffs need not allege that Defendant had knowledge or

constructive knowledge with respect to Plaintiff specifically.”).

Taken together, Plaintiff’s allegations raise a plausible inference that RRI Brand

Defendants “should have known” about the nature of the venture. And while, ultimately, these

allegations may be unsubstantiated on a fuller record, they satisfy the three-pronged requirement

of 18 U.S.C. § 1595 to survive a motion to dismiss and, hence, a motion for judgment on the

pleadings. See Roe, 170 F. Supp. 3d at 1031 (“Courts apply the same analysis to motions for

judgment on the pleadings under Rule 12(c) as they apply to motions to dismiss under Federal

Rule of Civil Procedure 12(b)(6).”); 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); T.D.P., 725

F. Supp. 3d at 798–99.

B. Indirect or Vicarious Liability

Plaintiff also asserts that RRI Brand Defendants are vicariously liable for TVPRA

violations “because RRI Brand Defendants, together with Varahi Hotel, LLC, acted as the joint

employer of [Smyrna RRI] employees because RRI Brand Defendants and Varahi Hotel, LLC

jointly controlled the terms and conditions of their employment.” (ECF No. 1 ¶ 123; see also id.

¶¶ 105–107). RRI Brand Defendants challenge this claim on multiple grounds. First, they argue

that Plaintiff’s failure to distinguish between the multiple RRI Brand Defendants does not satisfy

Federal Rule of Civil Procedure 8(a). (ECF No. 23 at 13–14; ECF No. 24 at 13–14; ECF No. 25

at 13; ECF No. 26 at 13–14). RRI Brand Defendants also argue that they “employed no one at RRI

Smyrna in 2017,” and had no agency relationship, actual or apparent, with Varahi. (ECF No. 23 at

14; ECF No. 24 at 14; ECF No. 25 at 13–14; ECF No. 26 at 14). Finally, RRI Brand Defendants

maintain that “Plaintiff has failed to allege a basis for [vicarious] liability with facts supporting a

plausible inference that the RRI Smyrna hotel employees are liable under the TVPRA.” (ECF No.

23 at 16; ECF No. 24 at 16; ECF No. 25 at 16; ECF No. 26 at 16).

1. Group Pleading

RRI Brand Defendants object to Plaintiff’s “group pleading,” i.e., the practice of attempting

to attribute wrongdoing to a group of defendants without differentiating which defendant was

involved in the unlawful conduct. They argue that such allegations fail to provide them with

adequate notice as to the claims against each of them.

As this Court has observed, group pleading has generally been found improper in cases

involving fraud, which apply Fed. R. Civ. P. 9(b)’s specificity requirements; or cases asserting

violations of securities laws or regulations, which likewise utilize heightened pleading standards.2

See M.A., 425 F. Supp. 3d at 973. A.R., 2022 WL 17741054, at *11. Since none of those heightened

requirements applies here, however, Rule 8’s more liberal pleading standards govern. To satisfy

Federal Rule of Civil Procedure 8, 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). The purpose of this rule

is to “give the defendant fair notice of what the . . . claim is and the grounds upon which it rests.”

Twombly, 550 U.S. at 545 (quoting Conley v. Gibson, 355 U.S. 41, 47 (1957)).

Although Plaintiff refers to RRI Brand Defendants collectively, her allegations are enough

to put them on notice of “what the claim is and the ground upon which it rests.” Twombly, 550

U.S. at 555. To begin with, the interrelatedness of RRI Brand entities support treating them as an

“integrated enterprise” or “joint employer.” Cf. Swallows v. Barnes & Noble Book Stores, Inc., 128

F.3d 990, 994 (6th Cir. 1997). Plaintiff, for example, alleges that RRI Brand Defendants share

2 Courts have also rejected group pleading in the 42 U.S.C. § 1983 context, reasoning that liability

under § 1983 arises only upon a showing of personal participation by the defendant. See Harris v.

City of Akron, No. 5:23-CV-01290, 2024 WL 97342, at *4 n. 47 (N.D. Ohio Jan. 9, 2024) (“Courts

in the Sixth Circuit disfavor [] ‘group pleading’ to establish 42 U.S.C. § 1983 liability.” (citing

Robertson v. Univ. of Akron Sch. of Law, Case No. 5:20-cv-1907, 2021 WL 3709915, at *6-7 (N.D.

Ohio Aug 20, 2021) (collecting cases))); Wood v. Washburn, No. 23-35041, 2025 WL 66046, at

*2 (9th Cir. Jan. 10, 2025). But see Kesterson v. Moritsugu, 149 F.3d 1183 (6th Cir. 1998) (noting

“the Supreme Court’s displeasure with lower courts placing heightened burdens on civil rights

plaintiffs in the absence of any support in the rules or statutes for so doing. As the Leatherman

court reasoned, such a heightened pleading requirement is incompatible with the notice pleading

requirement of Rule 8(a)(2).” (citing Leatherman v. Tarrant County Narcotics Intel. and

Coordination Unit, 507 U.S. 163 (1993)).

corporate offices; “signed agreements with one another related to the [Smyrna RRI]”; “exercised

joint control over operations of the [Smyrna RRI]”; “distributed revenue earned from the [Smyrna

RRI] among themselves”; and “communicated with one another regarding operation of the

[Smyrna RRI].” (ECF No. No. 1 ¶ 22; see also id. ¶ 122 (“RRI Brand Defendants shared profits,

standardized employee training, standardized and strict rules of operations, and RRI Brand

Defendants controlled pricing and reservations, regularly conducted inspections, operational

support and control.”).

The issue of single or joint employment status, for purposes of TVPRA liability, is also

“essentially factual.” Carrier Corp. v. N.L.R.B., 768 F.2d 778, 781 (6th Cir. 1985). In light of “the

slight variations in name between the entities in question,” it is reasonable to conclude that Plaintiff

at this juncture “lacks access to information that could further elucidate the specific relationship

between these entities.” See Bautista v. PR Gramercy Square Condo., 642 F. Supp. 3d 411, 422

(S.D.N.Y. 2022). Plaintiff’s “group pleading” therefore does not run afoul of Rule 8(a).

2. Agency Relationship between RRI Brand Defendants and Varahi

RRI Brand Defendants next argue that Plaintiff does not plausibly plead an agency

relationship between RRI Brand Defendants and Varahi and that her “generalized and conclusory

allegations relating to ‘control’ [are] insufficient.” (ECF No. 38 at 12).

The Sixth Circuit looks to the Restatement of Agency when applying “federal common law

principles of agency.” See Johansen v. HomeAdvisor, Inc., 218 F. Supp. 3d 577, 586 (S.D. Ohio

2016). 3 The Restatement defines agency as “the fiduciary relationship that arises when one person

3 As this Court previously outlined, the Sixth Circuit has yet to rule on whether federal or state

common law governs vicarious liability claims under the TVPRA. See T.D.P., 725 F. Supp. 3d at

799. While this Court has 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. See id. at 799–800 (explaining that “[t]his approach brings the analysis

(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); ABS Indus., Inc. ex rel. ABS

Litig. Tr. v. Fifth Third Bank, 333 F. App’x 994, 1000 (6th Cir. 2009). A principal-agent

relationship is therefore “characterized by the presence of two elements”: (1) “an indication by the

principal that the agent will act on his behalf and subject to his control”; and (2) “a manifestation

of consent by the agent so to act.” Auger v. Abb Flexible Automation, Inc., 34 F. App’x 160, 164

(6th Cir. 2002). A defining element of agency “is the principal’s right to control the agent’s

actions,” particularly, “[t]he power to give interim instructions.” Restatement (Third) of Agency §

1.01 cmt. f (“The power to give interim instructions distinguishes principals in agency

relationships 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. v. Ellerth, 524

U.S. 742, 756 (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 does not preclude wholesale franchisors from vicarious liability under an agency

theory. Bricker v. R & A Pizza, Inc., 804 F. Supp. 2d 615, 623 (S.D. Ohio 2011) (“[T]he existence

of a franchisor-franchisee relationship between persons does not in itself preclude the existence of

a principal-agent relationship between them.” (internal quotation marks and citations omitted)).

To determine whether “a principal-agent relationship exists, courts consider the same factors ‘as

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 direction on vicarious liability arguments”).

in the absence of a franchisor-franchisee relationship.’” Bricker, 804 F. Supp. 2d at 623 (quoting

Taylor v. Checkrite, Ltd., 627 F. Supp. 415, 416 (S.D. Ohio 1986)).

RRI Brand Defendants maintain that they lacked sufficient day-to-day control over the

Smyrna RRI and its employees to be held vicariously liable for their alleged TVPRA violations.

They cite two cases in support of their position. In Ries v. McDonald’s USA, LLC, No. 1:20-CV-

2, 2021 WL 5768436 (W.D. Mich. Dec. 6, 2021), former employees of the franchisee alleged that

their manager sexually harassed them in violation of Title VII and sought to hold the franchisor

liable under “joint employer” and “apparent agency” theories. Granting summary judgment for the

franchisor, the court found “no genuine dispute that [the franchisor] did not meaningfully

participate in employment decisions or possess sufficient control over the terms of Plaintiffs’

employment to qualify as a joint employer.” Id. at *5. Rather, the franchisor’s control was limited

to “‘control over conformity to standard operational details inherent in many franchise settings’

and ‘the power to terminate [the] franchises.’” Id. (quoting Evans v. McDonald’s Corp., 936 F.2d

1087, 1090 (10th Cir. 1991)). The court also rejected the “apparent agency” theory reasoning that,

among other things, the franchisor “could not supervise Franchisee’s employees and then

discipline them to correct harassing behavior,” and there was “scant evidence that Plaintiffs

reasonably believed that their manager’s harassing actions were within the authority given to him

by McDonald’s.” Id. at *6-7.

In the other case, Broock v. Nutri/System, Inc., 654 F. Supp. 7 (S.D. Ohio 1986), the

administrator of an estate bought suit on behalf of individual who participated in franchisee’s diet

program before her death. The court found, that no actual agency relationship existed between the

franchisee and franchisor at the time of the individual’s death, but that genuine issues of material

fact exist as to whether an apparent agency or agency by estoppel relationship existed at that time.

In reaching that conclusion, the court relied on deposition testimony from the deceased’s husband

stating that “Sharon had come to me and said she wanted to . . . lose some weight and she had read

about Nutri/System and it guaranteed you lose so much weight.” Id. at 11 (emphasis original).

Those cases—which had the benefit of a full record developed at summary judgment—do

little to help RRI Brand Defendants at this pre-discovery stage. See Ries, 2021 WL 5768436, at *5

(distinguishing “cases in which courts denied a franchisor’s attempt to dismiss similar claims

against it because the franchisor was involved in creating personnel policies or provided training

to the franchisee’s employees,” noting that “[t]he Court is not assessing the allegations in

Plaintiffs’ complaint.”) Given that “the existence of an agency relationship is a question of fact,

rather than one of law,” this Court’s task on a Rule 12(c) motion is to determine whether the

pleadings and the attached exhibits present “any conflicting evidence of an agency relationship”

between RRI Brand Defendants and Varahi. Brainard v. Am. Skandia Life Assur. Corp., 432 F.3d

655, 661 (6th Cir. 2005).

Seeking to dispel the existence of any agency or joint employer relationship, RRI Brand

Defendants rely on the franchise agreement between RRF and Varahi. (See ECF No. 23 at 15

(citing ECF No. 18-1 § 15.1)).4 According to RRI Brand Defendants, the contract makes clear

“that Varahi owned, operated, and employed individuals at the RRI Smyrna—and no Red Roof

4 Because the franchise agreement is attached to RRF’s answer (ECF No. 18-1), it is properly

considered on a Rule 12(c) motion. See Oakland Tactical Supply, LLC v. Howell Twp., Michigan,

103 F.4th 1186, 1192 (6th Cir. 2024) (“[D]ocuments attached to the pleadings become part of the

pleadings and may be considered.” (alteration in original) (citation omitted)); Dudek v. Thomas &

Thomas Attorneys & Couns. at Law, LLC, 702 F. Supp. 2d 826, 832 (N.D. Ohio 2010) (“When

ruling on a Rule 12(c) motion, [the court can] consider all available pleadings and can also consider

‘any documents attached to, incorporated by, or referred to in the pleadings.’”); see also Fed. R.

Civ. P. 10(c) (stating that “[a] copy of a written instrument that is an exhibit to a pleading is part

of the pleading for all purposes”); Fed. R. Civ. P. 7(a) (defining “pleadings” to include both the

complaint and the answer).

entity, was responsible for the conduct of any RRI Smyrna employee.” (Id.). They point to the

section that designates Varahi as an “independent contractor” and states: “[N]othing herein shall .

. . be construed to create the relationship of employer and employee, partnership, principal and

agent, or joint venture between Franchisor (or its Affiliates) and Franchisee.” (ECF No. 18-1

§ 15.1).

But “[a]n agency relationship does not require an explicit agreement, contract, or

understanding between the parties, . . . and when the facts establish the existence of an agency

relationship, it will be found to exist whether the parties intended to create one or not.” Gen.

Acquisition, Inc. v. GenCorp Inc., 766 F. Supp. 1460, 1471 (S.D. Ohio 1990); see Restatement

(Third) of Agency § 1.02 (2006) (“Whether a relationship is characterized as agency in an

agreement between parties . . . is not controlling.”). The parties’ contractual disclaimer of a

particular legal relationship is thus not dispositive.5

5 Indeed, most courts agree that the parties’ course of conduct may establish an agency relationship

regardless of the label used by the parties to describe their relationship. See Krakauer v. Dish

Network, L.L.C., 925 F.3d 643, 661 (4th Cir. 2019) (noting that, although [t]he terms of the

agreement . . . will remain highly relevant to the legal status of the[] [entities’] relationship,” “a

contractual disclaimer [] alone [is not] dispositive”); Pac. Gas & Elec. Co. v. United States, 838

F.3d 1341, 1359 (Fed. Cir. 2016) (“[I]t is well established that parties’ statements in a contract are

not dispositive as to the existence of an agency relationship.”); United States v. Milovanovic, 678

F.3d 713, 725 (9th Cir. 2012) (finding an agency relationship even though the parties’ agreements

labeled them as independent contractors); Cleveland v. Caplaw Enterprises, 448 F.3d 518, 523 (2d

Cir. 2006) (“Slavish deference to contractual language is inappropriate in the highly-factual and

often nuanced agency analysis.”); City of Chicago v. Matchmaker Real Est. Sales Ctr., Inc., 982

F.2d 1086, 1097–98 (7th Cir. 1992) (noting that contractual language establishing an “independent

contractor” relationship is not enough to preclude finding of agency); Bradbury v. Phillips

Petroleum Co., 815 F.2d 1356, 1360 (10th Cir. 1987) (“[T]he terms ‘agents’ and ‘independent

contractor’ are not necessarily mutually exclusive.”); see also Jackson v. Novastar Mortg., Inc.,

645 F. Supp. 2d 636, 642 (W.D. Tenn. 2007) (“The parties’ characterization in an agreement is

not dispositive of the existence of an agency relationship.” (citing Restatement (Third) of Agency

§ 1.02)); Staton Techiya, LLC v. Samsung Elecs. Co., 742 F. Supp. 3d 602, 653 (E.D. Tex. 2024)

(“[C]ontractual provisions disclaiming an agency relationship are not dispositive: courts must look

Even on the facts, RRI Brand Defendants falter. In their motions, they describe the scope

of RRF’s supervision over the Smyrna RRI under the franchise agreement as not “exceed[ing] a

simple right to inspect the quality of the operation and of general control over the business

practices.” (See ECF Nos. 23, 24, 25, 26 at 15). This brings the terms of franchise agreement to

the fore which, upon review, refute that characterization. Among its provisions, the franchise

agreement requires Varahi’s managers to “attend and successfully complete to Franchisor’s

satisfaction, Franchisor’s Manager Training Program” to “prepare them to operate, administer, and

manage the [Smyrna RRI] in compliance with Franchisor’s Standards,” (ECF No. 18-1 § 5.6); and

Varahi to “participate . . . in any Reservation System maintained or designated by Franchisor for

the System and to comply with all terms and conditions of participation,” (id. § 5.14); to

“participate in and comply with the terms of all marketing, reservation service, rate and room

inventory management, advertising and operating programs and policies required by Franchisor .

. . including, without limitation, any Internet-based or other electronic advertising and marketing

conducted and prescribed by Franchisor . . . in the manner directed by Franchisor,” (id. § 5.16); to

maintain records “in the form and manner prescribed by Franchisor” that show “the results of

operation of the Inn”; and to install equipment and follow “procedures as Franchisor may require”

for the purpose of “permit[ting] Franchisor to access each night during the term of this Franchise

Agreement, from Franchisee’s Computer System, information on the occupancy, average daily

room rate, rooms sold, Gross Room Revenue, and such other data and information attributable to

the Inn as Franchisor may require,” (id. § 9.1).

to the accompanying circumstances regarding the relationship between the parties to determine

whether a principal-agent relationship exists.” (citation and internal quotation marks omitted)),

appeal dismissed, No. 2024-1917, 2024 WL 5181582 (Fed. Cir. Dec. 20, 2024).

These provisions undermine RRI Brand Defendants’ argument that they were “not

involved with RRI Smyrna’s operation” and raise a material issue of fact as to the extent of their

day-to-day control over Smyrna RRI’s operations, including their employment decisions. See A.R.,

2022 WL 17741054, at *11 (allegations that franchisor hotel “promulgate[s] policies relating to

training employees” support inference that “Defendant had significant control over hotel

franchisee employees because it set the standards by which the hotel employees are expected to

operate on a daily basis”).

Besides alleging sufficient facts consistent with the franchise agreement that support an

agency or joint employer relationship (see ECF No. 1 ¶¶ 91, 101), Plaintiff’s allegations likewise

support the inference that Varahi and their staff are plausibly liable under Section 1595(a). RRI

Brand Defendants are correct that for vicarious liability to attach, the hotel franchisee itself must

have committed a TVPRA violation through: (1) “knowingly benefit[ting], financially or by

receiving anything of value”; (2) from participating in a venture; (3) that they “should have known

has engaged in an act in violation of this chapter.” 18 U.S.C. § 1595(a).

First, Plaintiff alleges that Franchisee rented rooms to traffickers and financially benefited

from their trafficking ventures, therefore satisfying the first prong. (ECF No. 1 ¶ 108). As

explained in Section III.A.2.a supra, the rental of a room constitutes a financial benefit from a

relationship with the trafficker sufficient to satisfy the “knowing benefit” element. Second,

Plaintiff’s allegations raise a plausible inference that Varahi, along with RRI Brand Defendants,

participated in a hotel-operating commercial venture that profited from Plaintiff’s sex trafficking.

(ECF No. 1 ¶ 109). Finally, the Complaint plausibly alleges that Franchisee had constructive

knowledge that Plaintiff was being trafficked by observing red flags consistent with sex

trafficking, including Plaintiff’s bruising and emotional demeanor. (See e.g., id. ¶ 78).

Accordingly, Plaintiffs allegations satisfy the three-pronged test established by 18 U.S.C. § 1595

to state a TVPRA claim against Varahi.

RRI Brand Defendants’ motions for judgment on the pleadings (ECF Nos. 23, 24, 25, 26)

are therefore GRANTED IN PART to the extent that RRI Brand Defendants seek dismissal of

Plaintiff’s perpetrator claims. Plaintiff’s perpetrator liability claim against RRI Brand Defendants

is DISMISSED. RRI Brand Defendants’ motions for judgment on the pleadings (ECF Nos. 23,

24, 25, 26) are DENIED in all other respects.

IV. CONCLUSION

For the reasons explained above, RRI Brand Defendants’ motions for judgment on the

pleadings (ECF Nos. 23, 24, 25, 26) are GRANTED IN PART to the extent that RRI Brand

Defendants seek dismissal of Plaintiffs perpetrator claims. Plaintiff’s perpetrator liability claim

against RRI Brand Defendants is DISMISSED. RRI Brand Defendants’ motions for judgment on

the pleadings (ECF Nos. 23, 24, 25, 26) are DENIED in all other respects.

IT IS SO ORDERED.

UNITED STATES DISTRICT JUDGE

DATED: March 6, 2025

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