E.S. v. Best W. Int'l, Inc.

510 F.Supp.3d 420

E.S., an individual, Plaintiff,

v.BEST WESTERN INTERNATIONAL, INC. ; Marriott International, Inc.; ESA Management, LLC; G6 Hospitality, LLC ; Wyndham Hotels and Resorts, Inc. ; and Choice Hotels International, Inc., Defendants.

Case Number: 3:20-cv-00050-M

United States District Court, N.D. Texas, Dallas Division.

Signed January 4, 2021

W Mark Lanier, Monica Cooper, Pro Hac Vice, The Lanier Law Firm, P.C., Houston, TX, Charla G. Aldous, Aldous Walker LLP, Dallas, TX, Paul Pennock, Pro Hac Vice, Weitz Luxenburg PC, New York, NY, for Plaintiff.

Nicole Ordonez, Amber Rochelle Pickett, Nichol L. Bunn, Lewis Brisbois Bisgaard & Smith LLP, Dallas, TX, Karen L. Campbell, Pro Hac Vice, Lewis Brisbois Bisgaard & Smith LLP, New York, NY, for Defendant Best Western International Inc.

Jason S. Lewis, James C. Bookhout, DLA Piper LLP, Dallas, TX, Ellen E. Dew, Pro Hac Vice, DLA Piper (US) LLP, Baltimore, MD, for Defendant Marriott International Inc.

Isabel Andrade Crosby, DLA Piper LLP, Dallas, TX, Angela C. Agrusa, Pro Hac Vice, Shannon E. Dudic, Pro Hac Vice, DLA Piper LLP, Los Angeles, CA, for Defendant G6 Hospitality LLC.

Allissa Pollard, Christopher Donovan, DLA Piper LLP, Houston, TX, David S. Sager, Pro Hac Vice, DLA Piper LLP, Short Hills, NJ, for Defendant Wyndham Hotels and Resorts Inc.

Katriel Chaim Statman, Baker Donelson Bearman Caldwell & Berkowitz PC, Houston, TX, Sara M. Turner, Pro Hac Vice, Baker Donelson Bearman Caldwell & Berkowitz PC, Birmingham, AL, for Defendant Choice Hotels International Inc.

Claudine G. Jackson, Phelps Dunbar LLP, Fort Worth, TX, Christopher T. Byrd, Pro Hac Vice, Patrick Bryant Moore, Pro Hac Vice, Sarah Unatin, Pro Hac Vice, Shubhra R. Mashelkar, Pro Hac Vice, Weinberg Wheeler Hudgins Gunn & Dial LLC, Atlanta, GA, for Defendant ESA Management LLC.

ORDER

BARBARA M. G. LYNN, CHIEF JUDGE

Before the Court are the Motion to Dismiss (ECF No. 55), filed by Defendant Best Western International, Inc.; the Motion to Dismiss (ECF No. 56), filed by Defendant Choice Hotels International, Inc.; the Motion to Dismiss (ECF No. 58), filed by Marriott International, Inc.; the Motion to Dismiss (ECF No. 61), filed by Wyndham Hotels and Resorts, Inc.; and the Motion to Dismiss (ECF No. 102), filed by ESA Management, LLC.¹ For the reasons stated below, the Motions are GRANTED IN PART and DENIED IN PART. Plaintiff shall have twenty days from the date of this Order to file an amended complaint.

I. Background

In this case, Plaintiff E.S., a sex trafficking victim, alleges that Defendants have violated the William Wilberforce Trafficking Victims Protection Reauthorization Act of 2008 ("TVPRA"), 18 U.S.C. § 1591, et seq. Plaintiff alleges that she was first trafficked for commercial sex when she was 21 years old in Fort Worth and Dallas, Texas. Plaintiff states that she was coerced into trafficking by a friend of her sister, who promised he would take care of her and her daughter. Plaintiff contends that, between approximately 2006 and 2011, she "was advertised on www.backpage.com against her will, physically tortured, and then sexually exploited under such duress at hotels in Arlington, Garland, Fort Worth, Grand Prairie, Dallas, Addison and Mesquite, Texas[,] including the Baymont Inn®, Days Inn®, Super 8®, Microtel®, La Quinta®, Best Western®, Wingate Hotel®, Howard Johnson®, Fairfield Inn and Suites®, Extended Stay America®, Studio 6®, La Quinta® and Quality Inn®." (ECF No. 46 ¶ 7); see also id. ¶ 8 ("[Plaintiff] was trafficked, sexually exploited, and repeatedly and brutally victimized at Defendants’ brand hotels in violation of 18 U.S.C. § 1591(a).").

Plaintiff asserts that her trafficker controlled a ring of women who were prostituted in Defendants’ brand hotels. Plaintiff alleges that when checking into the hotels, she would use fake IDs. She states that the reservations were either made in her name, her trafficker's name, or the name of another woman being trafficked. Plaintiff contends that she and the other women would pay for the rooms in cash or with a pre-paid card. Plaintiff states that while staying in the rooms, they would call for extra towels, refuse room service, and leave trash cans full of items associated with sexual activity. Plaintiff alleges that "there was significant foot traffic within the hotels that her trafficker frequented." (ECF No. 46 ¶ 169). Plaintiff states that "she remembers hearing screaming from down the hall, while other girls were being beaten by men in the trafficking ring." (Id. ). Plaintiff maintains that while she was staying at a Best Western hotel located at 201 West Loop 820 North, Fort Worth, Texas, she was removed from the hotel because the staff saw her advertisement on www.backpage.com. She states that she was not allowed to return to that location, but was permitted to stay at other Best Western hotels. (Id. ¶ 172).

On January 8, 2020, Plaintiff filed this lawsuit against Best Western, Marriott, ESA, Wyndham, Choice, and G6 Hospitality,² alleging violations of § 1595 by each Defendant. Defendants Best Western, Marriott, ESA, Wyndham, and Choice ("Movant Defendants") move to dismiss Plaintiff's claims against them, arguing that Plaintiff has failed to state a claim under Federal Rule of Civil Procedure 12(b)(6). Best Western also moves to dismiss under Rule 12(b)(2) for lack of personal jurisdiction and argues that it is an improper party to the lawsuit. Choice moves to strike portions of Plaintiff's First Amended Complaint ("FAC") under Rule 12(f).

II. Legal Standards

A. Rule 12(b)(6)

Rule 12(b)(6) authorizes dismissal for failure to state a claim upon which relief can be granted. Fed. R. Civ. P. 12(b)(6). The Court must "constru[e] all factual allegations in the light most favorable to the plaintiffs." Kopp v. Klein , 722 F.3d 327, 333 (5th Cir. 2013). The Court is not, however, "bound to accept as true a legal conclusion couched as a factual allegation." Bell Atlantic Corp. v. Twombly , 550 U.S. 544, 555, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007) (quoting Papasan v. Allain , 478 U.S. 265, 286, 106 S.Ct. 2932, 92 L.Ed.2d 209 (1986) ).

For a complaint to survive a Rule 12(b)(6) motion, it must contain "enough facts to state a claim to relief that is plausible on its face." Twombly , 550 U.S. at 570, 127 S.Ct. 1955. A facially plausible complaint "must allege more than labels and conclusions, ... factual allegations must be enough to raise a right to relief above the speculative level." Jebaco, Inc. v. Harrah's Operating Co., Inc. , 587 F.3d 314, 318 (5th Cir. 2009) (quoting Twombly , 550 U.S. at 555, 127 S.Ct. 1955 ).

B. Rule 12(b)(2)

When a defendant challenges personal jurisdiction under Rule 12(b)(2), the plaintiff bears the burden of "mak[ing] a prima facie showing that personal jurisdiction is proper." Monkton Ins. Servs., Ltd. v. Ritter , 768 F.3d 429, 431 (5th Cir. 2014) (internal citation omitted). The Court "must accept the plaintiff's uncontroverted allegations, and resolve in [her] favor all conflicts between the facts contained in the parties’ affidavits and other documentation." Id. at 431.

C. Rule 12(f)

Rule 12(f) provides that "[t]he court may strike from a pleading an insufficient defense or any redundant, immaterial, impertinent, or scandalous matter." Both because striking a portion of a pleading is a drastic remedy, and because it often is sought by the movant simply as a dilatory tactic, motions under Rule 12(f) are viewed with disfavor and are infrequently granted. F.D.I.C. v. Niblo , 821 F. Supp. 441, 449 (N.D. Tex. 1993) (internal citation omitted). However, allegations can be appropriately stricken when they have no possible relation to the controversy and may thereby cause prejudice to one of the parties. Jefferson Parish Consol. Garbage Dist. No. 1 v. Waste Mgmt. of La. , Case No. 09-6270, 2010 WL 1731204, at *5 (E.D. La. Apr. 28, 2010) (internal citations omitted); Berry v. Lee , 428 F. Supp. 2d 546, 563 (N.D. Tex. 2006). The Court possesses considerable discretion in ruling on a motion to strike. Niblo , 821 F. Supp. at 449.

III. Analysis

A. Movant Defendants’ Rule 12(b)(6) Motions to Dismiss

Section 1591 of the TVPRA imposes criminal liability for sex trafficking, while § 1595 provides the following civil remedy:

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). To state a claim under a § 1595 financial beneficiary theory, Plaintiff must allege facts from which it can be reasonably inferred that Movant Defendants (1) "knowingly benefit[ted] financially or by receiving anything of value," (2) from participation in a venture, (3) they "knew or should have known has engaged in" sex trafficking under § 1591. See J.C. v. Choice Hotels Int'l, Inc., et al. , Case No. 20-cv-0155, 2020 WL 6318707, at *4 (N.D. Cal. Oct. 28, 2020).

Plaintiff claims that Movant Defendants are both directly and indirectly liable under § 1595. Movant Defendants move to dismiss Plaintiff's § 1595 claims under both theories.³ Best Western and Wyndham argue that Plaintiff's claims under § 1595 are partially barred by the statute of limitations and because the financial beneficiary prong of § 1595 does not apply retroactively. Movant Defendants also argue that the FAC is comprised of improper shotgun or group pleading.

1. Direct Liability

a. Knowingly Benefitted

Movant Defendants argue that the FAC fails to allege sufficiently that the Movant Defendants "knowingly benefitted" from the sex trafficking of Plaintiff.

In the FAC, Plaintiff alleges that Movant Defendants have "financially benefit[t]ed ... by keeping operating costs low, and maintaining the loyalty of the...