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Court Dismisses Sex Trafficking Claims Against Hotelier

01.10.24 | NEWS

Joining other court rulings around the country, the Federal District Court of Oregon ruled that a plaintiff failed to make a financial beneficiary claim against a hotel owner and operator under the Trafficking Victims Protection Reauthorization Act (“TVPRA”), a federal sex trafficking statute.

The TVPRA was initially enacted by Congress in 2003 to provide a private right of civil action for victims of sex trafficking. 18 U.S.C. § 1595. The 2008 reauthorization of the statute broadened the scope, allowing for recovery against individuals who benefit from participation the trafficking venture. It permits a victim of sex trafficking to pursue a civil remedy against the perpetrator or someone “who 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.” 18 U.S.C. § 1595(a). As a result of the reauthorization, courts across the country have been tasked with determining whether hotels, hotel franchises, and hotel management companies can be held liable under the statute.

To state a financial beneficiary claim under § 1595(a), a plaintiff must allege facts from which a court can reasonably infer that defendants (1) knowingly benefited financially (2) from “participation in a venture” (3) that defendants “knew or should have known” engaged in sex trafficking as defined in 18 U.S.C. § 1591. J.C. v. Choice Hotels Int’l, Inc., No. 20-cv- 00155-WHO, 2020 WL 6318707, at *4 (N.D. Cal. Oct. 28, 2020) (citation omitted). The relevant section of the TVPRA defines sex trafficking as a commercial sex activity involving “force, threats of force, fraud, coercion. . . , or any combination of such means [is] used to cause a person to engage in a commercial sex act.”  18 U.S.C. § 1591(a).  The statute does not permit a remedy for all damages arising out of commercial sex activity generally.  See A.B. v. Hilton Worldwide Holdings Inc., 484 F. Supp. 3d. 921, 1024 (D. Or. 2020) (quoting Doe 1 v. Red Roof Inns, Inc., No. 1:19-cv-03840-WMR, 2020 WL 1872335, at *3 (N.D. Ga. Apr. 13, 2020)).

In A.B. v. Shilo Inn, Salem, LLC, the court granted Shilo Inn and Shilo Inn Management’s motion to dismiss for failure to state a claim. The plaintiff alleged the hotel owner and operator violated the TVPRA, arising out of her alleged sex trafficking at the Oregon hotel.  She argued that the hotel owner and operator knowingly benefited financially from participation in a venture that they knew or should have known engaged in sex trafficking. However, the court ruled that the plaintiff failed to meet two of the three elements under the TVPRA’s financial beneficiary remedy. First, the court was not convinced that general knowledge of sex trafficking within the hotel industry as well as online reviews of the hotel itself were sufficient to meet the knowledge element of the statute. Second, the plaintiff failed to allege that the hotel owner and operator defendants participated in the sex trafficking venture.  The court stated that the plaintiff did not show tacit agreement between defendant and plaintiff’s trafficker.  The court noted, “[a]lthough Plaintiff plausibly alleges indicia of commercial sex activity, when the victim is an adult, § 1591 only provides a remedy for commercial sex activity involving ‘force, threats of force, fraud, [or] coercion.’” (citing 18 U.S.C. § 1591(a)).

It’s likely we’ll continue to see plaintiffs bring financial beneficiary claims against hotels, owners, and operators under the TVPRA in this and other jurisdictions across the country.

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