A recent University of Texas study estimated that “234,000 people of all ages work under involuntary servitude or debt bondage in Texas. Meanwhile, about 79,000 children and young adults are coerced or deceived into prostitution…”~ Austin American Statesman, Jan. 24, 2017
Effective June 19, 2009, the Texas Legislature enacted Chapter 98 of the Texas Civil Practice and Remedies Code imposing tort liability for the “Liability for Trafficking of Persons”. That chapter was enacted with little fanfare. However, in 2015, the Texas Legislature amended Chapter 98 by adding Section 98.0025, entitled “Shareholder and Member Liability”. This relatively recent amendment gives the statute more teeth in the continuing fight against human trafficking by imposing individual civil liability, including money damage awards, against shareholders and members of business entities found to have benefitted from human trafficking in certain situations. Creative plaintiff attorneys are beginning to use the amendment to their and their clients’ advantages.
Damages, Costs, and Fees
If a person or business venture is found to have “engage[d] in the trafficking of persons or who intentionally or knowingly benefits from participating in a venture that traffics another person,” section 98.003(a) provides for the mandatory award of:
actual damages, including mental anguish damages without showing any physical manifestation of same;
court costs; and
reasonable attorney’s fees.
Additionally, section 98.003(b) provides for the discretionary award of exemplary damages.
While Chapter 98 originally provided for joint and several liability as between liable co-defendants, the 2015 amendment goes one giant step further by imposing joint and several liability on any shareholder or member (whether or not they are a named defendant) of any business venture found liable under Section 98.002, if the plaintiff demonstrates that “the shareholder or member caused the entity to be used for the purpose of trafficking that person and did traffic that person for the direct personal benefit of the shareholder or member.” Section 98.0025.
Houston Sex Trafficking Suit
This recent amendment was used in a suit filed in January, 2018 in Houston, Texas against Backpage.com, and several local and national truck stops and hotels that allegedly profited from human trafficking and prostitution. As such activity can occur in any hotel, regardless of price-point or location, we will follow this suit closely and advise our hospitality clients accordingly.