H.G. v. Inter-Continental Hotels Corp.

Citation489 F.Supp.3d 697
Decision Date23 September 2020
Docket NumberCase No. 19-cv-13622
Parties H.G., an individual, Plaintiff, v. INTER-CONTINENTAL HOTELS CORPORATION and Marriott International, Inc., Defendants.
CourtU.S. District Court — Eastern District of Michigan

Tiffany R. Ellis, Weitz & Luxenberg, P.C., Detroit, MI, for Plaintiff.

Derek D. McLeod, Jaffe, Raitt, Heuer & Weiss, P.C., Southfield, MI, Ellen E. Dew, Michael P. O'Day, DLA Piper LLP (US), Baltimore, MD, for Defendant Marriott International, Inc.

Audrey J. Forbush, Plunkett & Cooney, Flint, MI, John M. Hamrick, Holland & Knight, Atlanta, GA, William Newton Shepherd, Holland & Knight LLP, West Palm Beach, FL, for Defendant Inter-Continental Hotels Corporation.

OPINION AND ORDER (1) GRANTING DEFENDANTSMOTIONS TO DISMISS (ECF Nos. 19, 20) AND (2) GRANTING PLAINTIFF'S MOTION TO PROCEED UNDER A PSEUDONYM (ECF No. 2)

MATTHEW F. LEITMAN, UNITED STATES DISTRICT JUDGE

In this action, Plaintiff H.G. alleges that she was the victim of sex trafficking at two hotels in Michigan: the Holiday Inn Express and Suites – Downtown Detroit (the "Holiday Inn") and the Fairfield Inn, by Marriott – Ann Arbor (the "Fairfield Inn"). She pleads facts suggesting that staff at these hotels knew or should have known that she was being sex trafficked, that they could have acted to prevent or interfere with the trafficking, and that they failed to do so. But she has not sued the owners of the hotels or the staff members who worked at the hotels. Instead, she has sued the franchisors who granted franchises to the owners of the hotels: Defendants Inter-Continental Hotels Corporation ("IHC") and Marriott International, Inc. ("Marriott"). She brings claims against Defendants under the federal William Wilberforce Trafficking Victim Protection Reauthorization Act of 2008 (the "TVPRA") and under Michigan law for negligence.

Defendants have now moved to dismiss H.G.’s claims. (See Mots. to Dismiss, ECF Nos. 19, 20.) The allegations that H.G. makes are deeply disturbing, and the Court feels horribly about what she apparently had to endure. But the Court nonetheless must conclude that her claims fail as a matter of law. Her allegations do not satisfy the state-of-mind element of her TVPRA claims, and her negligence claims are barred by Michigan's three-year statute of limitations. The Court therefore GRANTS Defendantsmotions to dismiss and dismisses H.G.’s claims with prejudice.

I
A

H.G. is a native of the Detroit, Michigan area.1 (See Am. Compl. at ¶89, ECF No. 15, PageID.218.) In the summer of 2003, when H.G. was 17 years old, she was introduced to a sex trafficker. (See id. ) That trafficker "would thereafter find her at school or in the community and forcibly remove her, bringing her to [the Fairfield Inn and the Holiday Inn] against her will." (Id. ) At these hotels, "from approximately 2003-2011," H.G. was "subject[ed] to repeated instances of rape, physical abuse, verbal abuse, exploitation, psychological torment, kidnapping, and false imprisonment." (Id. at ¶88, PageID.217-218.)

H.G.’s trafficker and his associates did not try to hide their sexual exploitation of H.G. from the staff at the Holiday Inn and the Fairfield Inn. On the contrary, "at all times" that H.G. was "kept" at the hotels, "her trafficker or one of his partners was stationed downstairs in the lobby in public view, standing surveillance as H.G. repeatedly serviced buyers of commercial sex." (Id. at ¶¶ 93, 104, PageID.218-220.) Likewise, "H.G.’s trafficker forcefully delivered her to the hotel[s] and escorted her straight through the hotel[s’] front door[s] directly passed [sic] the front desk[s] to [ ] room[s] that he had previously rented. This display occurred numerous times and H.G. was often visibly impaired by drugs."

(Id. at ¶¶ 91, 101, PageID.218, 220.) In addition, on "[t]he days [that] H.G. was kept at [Defendants’ hotels] there was a constant stream of male visitors to her room[s] straight from the main lobby and front doors so that the foot traffic was both voluminous and obvious." (Id. at ¶¶ 94, 103 PageID.219, 220.) Finally, "there would be multiple broken objects, used condoms, and other sex paraphernalia left behind in the rooms. Additionally, blood was often splattered all throughout the rooms from H.G.’s beatings and injuries." (Id. at ¶114, PageID.222.)

At one point, H.G. even "requested help ... from the front desk [at the Holiday Inn] as she displayed blood running down her leg." (Id. at ¶106, PageID.221.) On that occasion, even though "H.G. was visibly in danger and requir[ed] immediate medical attention, [ ] she received no assistance and her trafficker pushed her back upstairs." (Id. ) At other times, "H.G. left the Fairfield Inn [ ] through the front door and past the staffed front desk in apparent need of medical assistance and would go directly to the hospital." (Id. at ¶96, PageID.219.)

"H.G. kept trying to escape [her traffickers] but the harassment continued until she moved to the west coast in June 2011." (Id. at ¶117, PageID.223.) In 2017, H.G. "was medically treated for what was long term effects of repeated physical trauma" suffered as a result of her "being trafficked for commercial sex" at the Holiday Inn and Fairfield Inn. (Id. at ¶120, PageID.223.)

B

The Holiday Inn and the Fairfield Inn are owned and operated by entities or individuals who are not parties to this civil action. (See id. at ¶74, PageID.200.) Those owner/operators are franchisees of Defendants. (See id. )

H.G. insists that even though Defendants neither own nor operate Holiday Inn and Fairfield Inn directly, they "exercise [ ] an ongoing and systemic right of control" over those hotels. (Id. ) According to H.G., Defendants assert this control by directing "the means and methods of how [the hotels] conduct[ ] daily business through one or more of the following actions":

1. hosting online bookings on Defendant[s’] domain;
2. requiring [the hotels] to use Defendant[s’] customer rewards program;
3. setting employee wages;
4. making employment decisions;
5. advertising for employment;
6. sharing profits;
7. standardized training methods for employees;
8. building and maintaining the facility in a manner specified by the owner;
9. standardized or strict rules of operation;
10. regular inspection of the facility and operation by owner;
11. fixing prices; and/or
12. other actions that deprive [the hotels] of independence in business operations.

(Id. at ¶86(a)(vi), PageID.205-206; see also id. at ¶87(a)(v), PageID.212-213.) Moreover, the hotels pay "around 10% of their total revenue back to [Defendants] and [are] required to develop and maintain [their] propert[ies] in accordance with [Defendants’] brand standards as they are laid out in franchise agreement[s]." (Id. at ¶77-78, PageID.201.) Defendants enforce these "standards through periodic inspections and even termination of the [franchise] agreement[s] ... if the [hotels are] found to be inadequate." (Id. at ¶¶ 79-80, ECF No. 201-202.)

C

H.G. contends that Defendants "knew or should have known that sex trafficking in hotels was industry wide, includ[ing] at its hotels, and that a significant portion of all sex trafficking was taking place at [their] hotels." (Id. at ¶41, PageID.192.) She says that "between at least 2003 and 2011, each Defendant held meetings among its executives, directors and managers at which sex trafficking in hotels was discussed." (Id. at ¶29, PageID.190.) And "during at least the 2003 to 2011 time period, emails were exchanged by employees of each Defendant that related to sex trafficking in hotels including Defendants’ hotels." (Id. at ¶30, PageID.190.) Finally, "from 2003 until 2011, each Defendant received information from media reports and/or law enforcement indicating that sex trafficking had occurred at one of its hotels." (Id. at ¶50, PageID.194.)

II

H.G. filed her initial Complaint on December 9, 2019. (See Compl., ECF No. 1.) She brought two counts against each Defendant. Counts I and II alleged that Defendants were negligent under Michigan law. Counts III and IV alleged that Defendants violated the TVPRA. (See id. )

Defendants moved to dismiss under Federal Rule of Civil Procedure 12(b)(6). (See Mots., ECF Nos. 10, 11.) They argued that H.G.’s TVPRA claims failed on the merits as a matter of law because, among other things:

She did not plausibly allege that Defendants participated in a sex trafficking venture involving her. (See , e.g. , IHC Mot. to Dismiss, ECF No. 10, PageID.109.);
• Her "allegations concerning purported trafficking at other [hotels under Defendants’ brands did] not sufficiently show that [Defendants], the purported franchisor[s], had knowledge of this alleged sex trafficking." (Id. , PageID.118; emphasis in original.);
She failed to "allege any facts that ‘should have alerted’ [Defendants] (as opposed to, perhaps, the franchisee hotel owner or hotel operator) to [her] trafficking." (Id. ); and
• To the extent she was seeking to hold Defendants vicariously liable for the acts and/or omissions of their franchisees, she did not "plead facts sufficient to allege that [Defendants], as [ ] purported franchisor[s], or as [ ] alleged principal[s] in an agency relationship with the franchisee[s], [were] liable for the alleged acts of the franchisee hotel owner[s]." (ECF No. 10, PageID.119.).

In the alternative, Defendants argued that H.G.’s TVPRA and negligence claims were barred by the applicable statutes of limitations. (See id. , PageID.109.)

On February 11, 2020, the Court entered an order granting H.G. leave to file a First Amended Complaint. (See Order, ECF No. 13.) In that order, the Court highlighted Defendants’ arguments that H.G.’s claims were barred by the statutes of limitations and that H.G. had "failed to plead sufficient facts to support the essential elements of her TVPRA claim and to hold Defendants liable for the alleged trafficking." (Id. , PageID.166.) The Court then granted H.G. "the opportunity to file a First Amended Complaint in order to remedy...

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