From today's decision by Judge Jeffrey Helmick (N.D. Ohio) in Doe 1 v. Gupta:
On March 19, 2020, Manish Raj Gupta was indicted by a federal grand jury on one count of sex trafficking by force, fraud, or coercion, in violation of 18 U.S.C. §§ 1591(a) and (b)(1), and one count of illegally dispensing a controlled substance, in violation of 21 U.S.C. §§ 841(a)(1) and (b)(7). These charges arose from allegations that Manish had surreptitiously drugged women before engaging in sex acts with them without their consent. Manish subsequently pled guilty to both charges and my colleague, Judge James G. Carr, sentenced him to serve 235 months in prison.
On June 26, 2022, two of Manish's alleged victims initiated this litigation, asserting claims against Manish, his father (Raj Gupta), and his now-former wife (Shraddha Gupta) for: (1) Forced Labor under 18 U.S.C. §§ 1589 and 1595; (2) Trafficking with respect to Peonage, Slavery, Involuntary Servitude, or Forced Labor under 18 U.S.C. §§ 1590 and 1595; (3) Human Trafficking Pursuant to California Civil Code § 52.5; (4) Action by Victim in Human Trafficking pursuant to Nevada Revised Statutes Annotated § 41.1399; (5) Human Trafficking pursuant to Ohio Revised Code § 2905.32; (6) Forced Labor and Labor Trafficking, Michigan Human Trafficking Victims Protection Act M.C.L. § 752.983, § 750.462(b); and (7) fraudulent transfer, pursuant to Ohio Revised Code § 1336.04….
Manish previously was a board-certified plastic surgeon and owner of Artisan Surgery Center, LLC. Plaintiffs allege Manish began drugging and sexually assaulting women, including women like Plaintiffs who worked as escorts, as early as 2013. Manish allegedly used prescription drugs he obtained through his medical practice to incapacitate the women before filming himself performing sexual acts with them.
The court allowed the claim to go forward against the rapist, but not the wife:
In addition to claims against perpetrators, 18 U.S.C. § 1595 permits victims to bring a civil action against "whoever knowingly benefits, or attempts or conspires to benefit, 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 [the TVPA]." …
Plaintiffs allege:
As Manish Gupta's wife, Shraddha Gupta received a letter from Jane Doe 1 in 2016 detailing the horrific acts that Manish forced upon her. Upon receipt of this letter, Shraddha did nothing. She kept the letter, but did nothing to uncover the realities of Manish's behavior. Her inaction enabled Manish Gupta to continue his trafficking of women, which led to his second rape of Jane Doe 2 in 2017….
But neither the statutory language nor caselaw supports Plaintiffs' contention that Congress intended for §§ 1589 and 1590 to impose liability on a defendant simply based upon a spousal or familial relationship. Instead, Plaintiffs must plausibly allege Shraddha knew she was receiving something of value from engaging in a business or commercial relationship….
But even if marriage conceivably could provide part of the required connection between a perpetrator and a beneficiary, Plaintiffs could not stand on this allegation alone. In A.D. v. Choice Hotels International, Inc. (M.D. Fla. 2023), the court dismissed the plaintiff's claims against a hotel franchisor because the plaintiff did "not sufficiently plead that [the franchisor] participated in a sex trafficking venture beyond participation in shared revenue as part of its normal role as a franchisor."
Plaintiffs have not alleged Shraddha had any participation in Manish's alleged venture other than that the two were married. This allegation is not sufficient to establish Shraddha is liable for Manish's actions….
[Plaintiffs argue that:]
Based upon the letter and other indicators Shraddha Gupta knew or should have known that Manish was engaging in human trafficking…. Shraddha Gupta and Manish Gupta co-mingled their assets and Shraddha retained control over Manish's earnings and assets from Artisan and benefit[ted] from them…. The extensive co-mingling and cooperation between the two made Shraddha a participant in Artisan…. Indeed, Shraddha received such extensive benefit from the ventures that the Court in case 3:20CR208 understood that Shraddha would be responsible for paying restitution to Jane Doe 1. Shraddha Gupta accepted approximately 9 million in assets from Manish during their divorce knowing that many of those assets were proceeds were from the venture through which Manish conducted his illegal activities.
[But p]laintiffs offer no basis upon which to infer that the alleged "extensive co-mingling and cooperation" had a business purpose, rather than a marital purpose. Other than the fact of her marriage to Manish, Plaintiffs do not allege any facts which connect Shraddha to Artisan. Nor does Judge Carr's restitution order compel a different conclusion. Shraddha's receipt of the couple's assets in the divorce proceedings, after Manish pled guilty to the criminal charges against him, does not establish Shraddha knowingly participated in a venture within the scope of the statute….
The court held the same as to Ohio human trafficking law:
Plaintiffs contend they should be permitted to proceed with this claim because the Ohio "definition of 'trafficker' is sufficiently broader than under the federal statute. Specifically, the statute reaches those who 'provide, obtain, [or] maintain' another knowing the other will be subjected to sex or labor trafficking."
But Plaintiffs' allegations about Shraddha's conduct do not match up with the statutory provisions. This point is clearest in the original Complaint, where Plaintiffs allege Shraddha "did nothing" after learning of Jane Doe 1's allegations about Manish's actions. Section 2905.32 is a criminal statute which requires an individual act "knowingly" and "as a principal." Plaintiffs do not explain how their allegations about Shraddha's "inaction," plausibly suggest she took any action to "provide, obtain, [or] maintain" either of the Plaintiffs as required by the statute.
Nor do Plaintiffs' proposed amendments help, as Ohio law only provides a civil cause of action against "the trafficker." None of Plaintiffs' new allegations support the necessary inference that Shraddha knowingly took any active steps to compel either of the Plaintiffs to engage in sexual activity. Therefore, I deny as futile their motion for leave to amend the Complaint as to Count Five.
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