K.O., who said she was trafficked out of numerous southeastern Michigan hotels from 2003 to 2014, sued the hotels under the Trafficking Victims Protection Reauthorization Act of 2008, which allows victims of sex trafficking to recover damages from traffickers and from those who "knowingly benefit" from trafficking. Lawyers from the hotel chains argued Wednesday that K.O.'s TVPRA claims must be tossed because she had not shown that any of the hotels participated in or had knowledge of her being trafficked. Instead, they said, K.O. has aimed a "shotgun pleading" at them that impugns the entire budget motel industry as being aware of and complicit in sex trafficking generally.
The allegations are too vague to survive a motion to dismiss, said Cynthia G. Burnside of Holland & Knight LLP, representing the Holiday Inn brand's franchisor Holiday Hospitality Franchising LLC, during the hearing. Burnside told the judge the Eleventh Circuit has found that "generalized allegations that the hotel industry was aware that trafficking occurs in the industry" are insufficient for the knowledge requirement of the TVPRA. Brian Perkins of Levin Simes Abrams LLP, representing K.O., disagreed, saying his client must show only that the hotels should have known that at least some of their business came from sex trafficking. "We don't need to prove that the hotels knew this specific victim was being trafficked," Perkins told the judge. Perkins said his view was supported by a recent Seventh Circuit decision reviving a sex trafficking victim's lawsuit against Salesforce Inc.
A split Seventh Circuit panel said the victim in that case, G.G., could go after Salesforce for benefiting from its business relationship with Backpage.com, which hosted online ads for prostitution, rejecting the argument that Salesforce had to know about G.G.'s specific trafficking for her to have a viable claim under the TVPRA. The parties also clashed over whether the "participation in a venture" element of a TVPRA civil claim must involve a sex-trafficking venture or whether any business venture can suffice, with K.O.'s lawyer Perkins arguing the franchisor-franchisee relationship between the hotel's corporate parents and their Michigan franchise locations, which allegedly profited from renting rooms to sex traffickers, was sufficient for a viable claim under the TVPRA. But lawyers for the hotel chains said the "venture" described in the statute must involve one of the participants actually engaging in the trafficking, citing a 2011 Eleventh Circuit decision, Doe #1 v. Red Roof Inns Inc., for support. Under that standard, K.O. would have to show that the hotels were active participants or had some sort of business deal with her traffickers, not just that they rented their hotel rooms to them in the course of routine business operations, the hotels told the judge.
The hotels said K.O. had already amended her complaint three times and urged the judge to dismiss the complaint without another chance to amend. K.O. said in her August 2022 complaint that she was forced by a trafficker to sell sex out of hotel rooms nearly every day for 10 years. K.O. sued G6 Hospitality, franchisor of the Motel 6 brand; Marriott International Inc. and franchisees F.I. Farmington Hills Inc. and Farmington Hospitality Inc.; Knights Franchise Systems Inc., which operates the Knights Inn brand; Hawthorn Suites Franchising Inc., which runs the Hawthorn Suites by Wyndham; Holiday Hospitality Franchising LLC and franchisee Southfield Hotel Suites Inc.; Extended Stay America Inc. and franchisee Extended Stay Management LLC; and Red Roof Inns Inc. Her lawyer, Perkins, said the hotels' local management and corporate ownership should have both been aware that sex trafficking occurred at its properties because there were clear "red flags." "These hotels are a part of Michigan's sex trafficking epidemic," he told the judge. The judge did not say when she might rule on the hotels' motions to dismiss.
K.O. is represented by Brian J. Perkins and William H. Cross of Levin Simes Abrams LLP and Sarah Prescott of Salvatore Prescott PLLC. G6 Hospitality is represented by David A. Mollicone and Jennifer M. Grieco of Altior Law PC. Marriott International is represented by Derek D. McLeod of Taft Stettinius & Hollister LLP and Ellen E. Dew of DLA Piper LLP. Red Roof Inns is represented by Michael Thomas Franz and Michael Roman of Lewis Brisbois Bisgaard & Smith LLP. Holiday Hospitality Franchising is represented by Joseph N. Fraser of Johnston Sztkiel and Hunt and John M. Hamrick, William Newton Shepherd and Cynthia G. Burnside of Holland & Knight LLP. Extended Stay America is represented by Kari Melkonian of Collins Einhorn Farrell PC and Patrick B. Moore of Weinberg Wheeler Hudgins Gunn & Dial. Knights Franchise Systems is represented by Andrew S. Kessler of Wood Smith Henning & Berman LLP. Hawthorn Suites Franchising is represented by Ann Helen MacDonald and Elise Hyejin Yu of ArentFox Schiff LLP. The case is K.O. v. Red Lion Hotels Corporation, case number 2:22-cv-11450, in the U.S. District Court for the Eastern District of Michigan.