There is still much room for improvement. In recent years, hotel-related entities across the country have found themselves accused of enabling human trafficking. Lawsuits have alleged that hotels have turned a blind eye to sex trafficking within their facilities in order to make money, in violation of the federal Trafficking Victims Protection Reauthorization Act (TVPRA).  Businesses confronted by such lawsuits range from local franchisees and hotel management companies to international franchisors and branch parent companies.

In 2021 alone, plaintiffs filed 42 civil sex trafficking cases; nearly half of those cases (17) were filed against hotels on a “financially benefiting” theory. In 2022, there were more than 100 civil sex trafficking cases filed and more than 50 of those cases were filed against hotels. In addition, 2022 saw a hotel criminally charged in a sex trafficking case.

In this article, we explore the rise in human trafficking lawsuits targeting the hotel industry, as well as the legal backdrop. We then discuss steps that hotel owners, operators and franchisors can take to protect themselves from liability while making a difference in combatting the scourge of trafficking.

The key statute is the TVPRA, which enables both civil and criminal actions for forced labor and sex trafficking.

CIVIL LITIGATION

The increase of human trafficking lawsuits against hotel entities is largely traceable to Congress’s 2008 reauthorization of the TVPRA. The 2008 reauthorization expanded the private right of action to include a penalty for those who knowingly benefit from participating in a venture that engages in human trafficking.

So expanded, the TVPRA provides victims an avenue to file civil lawsuits against their traffickers as well as anyone 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.”

To state a claim, a plaintiff must allege facts plausibly establishing that the defendant(s) “(1) knowingly benefitted (2) from participation in a venture (3) that they knew or should have known has engaged in trafficking the plaintiff.”  A plaintiff may satisfy these elements in one of two ways: a plaintiff may (1) “show that the defendant’s own acts, omissions, and state of mind establish each element,” i.e., that such defendant is directly liable under the statute; or (2) “impute to the defendant the acts, omissions, and state of mind of the agent of the defendant,” i.e., that the defendant is indirectly, or vicariously, liable under the statute.

In a civil action, victims may recover damages. While the TVPRA does not explicitly mention punitive damages, courts have held that such damages are available under the statute.

A typical lawsuit alleges that hotels “should have known” that they were being used to enable sex trafficking.  In discovery, plaintiffs seek to connect the dots between the alleged sex trafficking and the hotel, either by showing a continuous business relationship between the trafficker and the hotel (such that one might infer that there was a tacit agreement between the two), or by showing that sufficient red flags came to the hotel’s attention (such that the hotel knew or should have known that it was being used for sex trafficking).

For example, in S.W. v. Lorain-Elyria Motel, Inc., the district court concluded that plaintiff had sufficiently pleaded constructive knowledge based on allegations that defendants “were on notice about the prevalence of sex trafficking generally at their hotels and failed to take adequate steps to train staff in order to prevent its occurrence,” as well as “facts specific to [plaintiff’s] own sex trafficking, including a number of signs she alleges should have alerted staff to her situation.”

CRIMINAL LITIGATION

The TVPRA also has a criminal counterpart. Title 18, United States Code, Section 1591 broadly criminalizes sex trafficking. To prove a violation, the defendant must have (1) benefited financially or received something of value, (2) known of or recklessly disregarded the use or threat of force, fraud, or coercion that caused the person to engage in a commercial sex act, and (3) participated in the venture.

As noted, prosecutors have brought criminal cases against the hospitality industry. These cases typically involve evidence of an agreement between the sex trafficker and the hotel or motel owner indicating that the owner knew full well that his or her facility would serve as a conduit for sex trafficking.

Consider, for example, the aforementioned United States v. Dadarwala et al. In addition to the hotel owners and their son, the hotel entity itself was charged with conspiracy to engage in sex trafficking, in violation of 18 U.S.C. § 1594(c). The charging document indicates that the entity was a money-making refuge for prostitution, as the owner and employees conspired with pimps to traffic individuals in their hotel for financial gain. Several women, including a minor, were subjected to trafficking, drug addiction and physical violence. The conspirators posted ads on the internet for commercial sex acts at set rates to occur at the facility.

Although the evidence of knowledge in Dadarwala seems strong, evidence of this nature and magnitude is not necessary to trigger criminal scrutiny. For example, if there are—from the prosecutor’s perspective—a critical mass of red flags of sex trafficking, the prosecutor might conclude that the hotel or motel knew that there was sex trafficking occurring on its premises yet turned a blind eye. In such a case, a hotel or motel could very well find itself a target of a criminal investigation.

COMPLIANCE IS PARAMOUNT

Given the civil and criminal exposure in this area, and the prospect of hotels being held liable for what they should have known or recklessly failed to learn, hotels would do well to strengthen their training and compliance programs in order to identify and address perceived red flags.

For example, hotel staff may be trained to identify indicia of human trafficking so they can report any red flags to appropriate hotel personnel.  Among other things, hotel staff may be trained to note the following:

  • Room paid for with cash or pre-loaded credit cards.
  • Occupant has few or no personal items, such as luggage or other bags.
  • Occupant shows signs of malnourishment, poor hygiene, fatigue, sleep deprivation or unusual behavior.
  • Occupant has visible injuries.
  • Refusal of cleaning services for multiple days.
  • An excessive amount of sex paraphernalia in the hotel room.
  • Room is frequently visited by various different non-registered guests.
  • Individuals loitering in the hallways or appearing to monitor the area.

In terms of compliance, hotels may consider implementing strict control measures, including but not limited to: (1) requiring presentation of an ID for all room occupants; and (2) regular contact with all rooms, including daily room visits by hospitality staff and installation of cameras in the hallways outside of all rooms in an effort to detect indicia of human trafficking.

Compliance should also be risk-based.  For example, during sporting events and similar large-scale functions, hotels in the area should implement measures to increase vigilance with respect to possible human trafficking, including ensuring that more security personnel are hired to surveil the property.

CONCLUSION

Ultimately, preventing human trafficking is more than a matter of legal compliance; it’s a human imperative. Put differently, implementing effective policies and procedures will protect hotel franchisors, franchisees, owners and operators, while also combating and preventing human trafficking. Toward these ends, hotels should consider retaining counsel to conduct an independent privileged assessment of their controls around human trafficking.  Our experience with advising hospitality clients and providing compliance counseling to mitigate exposure confirms that forewarned is forearmed.