NEWARK (LN) — A New Jersey federal judge transferred a sex-trafficking lawsuit against Wyndham Hotels & Resorts, Inc. and several of its Texas-based franchisees to the Western District of Texas, holding that New Jersey courts cannot exercise personal jurisdiction over franchisee defendants whose claims do not arise out of or relate to their contacts with the forum, even where those contacts included routine financial reporting and royalty payments to a New Jersey franchisor.
Jane Doe, identified in court filings as A.A.M., alleges she was trafficked at two Days Inn properties in San Antonio and Houston between January 2010 and December 2014. She claims that during her exploitation, hotel rooms were paid for in cash or prepaid cards, she never left the room, the do-not-disturb sign was constantly on the door, housekeeping was refused, and there was constant heavy foot traffic in and out of her room involving men who were not hotel guests.
She sued Wyndham Hotels & Resorts, Inc., its Days Inns Worldwide, Inc. subsidiary, and three Texas franchisees — Hotel OM Sai Ram, LLC, SG Hospitality, LLC, and D. Laxmi, Inc. — under the Trafficking Victims Protection Reauthorization Act, alleging the defendants knowingly benefited from participation in a sex-trafficking venture.
The franchisees moved to dismiss for lack of personal jurisdiction, arguing their contacts with New Jersey were too attenuated to support suit there. U.S. District Judge Esther Salas agreed in part. On the first prong of the specific-jurisdiction analysis, she held that the franchisees had purposefully availed themselves of New Jersey by entering a franchise relationship with a New Jersey-based company. But on the second prong, she held that the plaintiff's claims did not arise out of or relate to those contacts, because the conduct at the core of the lawsuit — the rental of hotel rooms to sex traffickers — happened entirely in Texas. As a sister court in the same district had held in Doe (S.A.T.) v. Wyndham Hotels & Resorts, Inc., the connection between the conduct underlying the plaintiff's claim and the New Jersey forum was too attenuated to support specific personal jurisdiction.
Rather than dismiss the franchisee defendants outright, Salas transferred the entire case to the Western District of Texas under 28 U.S.C. § 1404(a), citing the convenience of parties and witnesses and the interest of justice. She noted that the plaintiff lives in Texas, all three franchisee defendants are Texas entities with their principal places of business there, and most of the evidence and witnesses tied to the alleged trafficking are likely in Texas as well.
Salas declined to reach the merits of Wyndham's separate motion to dismiss for failure to state a claim, leaving that fight for the Western District of Texas to resolve. The Wyndham defendants may re-file that application, post-transfer, at the direction of the transferee court.
The case is one of several filed in the District of New Jersey seeking similar relief under the TVPRA for alleged sex trafficking at hotel properties across the country, and Salas's ruling tracks a line of decisions from her colleagues on the same bench transferring materially identical cases to the districts where the trafficking occurred.
Doe filed her original complaint on December 30, 2024, naming eleven defendants; by the time of the transfer order, six had been voluntarily dismissed, leaving Wyndham Hotels & Resorts, Inc., Days Inns Worldwide, Inc., and the three franchisees to face her claims in a Texas courtroom.