The 11 Biggest Hotel Lawsuits in U.S. History
The hotel industry is one of the biggest sources of employment in the United States. Statista shows that the industry is currently valued at $258.13 billion. It is perhaps the industry that was affected most by the COVID-19 pandemic, with its value going to the lowest in 2020 ($127 billion). Some of the biggest hotel companies in the world are based in the U.S. They include Marriott International, Hilton Worldwide Holdings Inc., and Intercontinental Hotels Group PLC, among others. On several occasions, they have found themselves in court either as accused or as plaintiffs (a few times). This article will discuss the ten biggest hotel lawsuits in U.S. history.
11. Attorney General Elliot (of San Diego City) Versus Jim Neil, Kidder Mathews & Others, Overvaluation of Hotels ($1 million)
In one of the deals the State’s attorneys approved and council members disagreed with, the attorney general of San Diego City announced a lawsuit settlement between the parties mentioned above. Mr. Elliot argued that the respondents overvalued their hotels when selling them to the city. He based his argument on the hotels constructed before COVID-19 when the property’s value was lower. The city had paid $67 million for the Residence Inn Hotel. It also paid $39.5 million for another hotel in Kearny Mesa in 2020. While defending the deals, the city’s housing commission argued that it was necessary to purchase the hotels for they would be used in times of public health crisis.
The deal raised eyebrows when Jim Neil bought 40,000 shares of the Hotel Circle, the commission’s principal seller of the houses. This was a case of conflict of interest. In presenting his case, the Attorney general relied on valuation, which different property evaluators did, and they concluded that the hotel had been overvalued. Council members protested the settlement saying that they were not served with notices of the outcome of the case, a position which Elliot through two separate press releases.
10. EEOC Versus SLS Hotel, A Discriminative Termination ($2.5 million)
The Berkshire reported that in August 2018, The SLS Hotel had agreed to pay $2.5 million to settle a case which had been brought by the Equal Employment and Opportunities Commission (EEOC). The EEOC had argued that black dishwashers in the hotel were wrongfully terminated due to their color, face, and national origin. The hotel then recruited the services of a staffing agency which replaced them with Hispanics with fairly light skin. During the proceedings, the terminated employees testified that some of their supervisors would call them enslaved people and that they were reprimanded whenever they spoke their native language, Creole (the majority were from Haiti). In contrast, their counterparts would freely speak Spanish.
The monies were meant for 17 employees who conjointly registered their claims to the EEOC. In addition, the hotel was required to train all persons in positions of responsibility on how they should value diversity. The EEOC was also allowed to receive data from past terminations, involuntary separations, and layoffs, which could have taken place in all other hotels under the same ownership.
9. New York Attorney General Versus Doral Arrowwood Hotel & Conference Center, Illegal Termination ($2.7 million)
COVID-19 was one of the most exploited situations by the world’s hotel and transport (air) industry. The respondent, Doral Arrowwood, is one of the largest hotels in Rye Brook, New York, and it occupies a 114-acre piece of land featuring hotels, conferences, and a golf course. In December, the hotel announced to its workers that it would close for three weeks and that some employees would be terminated from the start of 2020. Through the State’s attorney general, the workers filed a lawsuit in which the workers accused the hotel of violating the New York Worker Adjustment and Retraining Notification Act (WARN), which requires employers to give notices to employees before terminating them.
In its defense, the hotel argued that it did so due to the unpredictable nature of the effects of the pandemic. However, the hotel acted maliciously, for there were other honorable ways in which it could have amicably solved the matter. Finally, in October 2021, the wait was over. The workers were awarded a lump sum of $2.7 million for catering for damage that could have been incurred due to the unlawful termination.
8. Banquet Workers Versus Davenport Hotels, Failure to Submit Service Fee ($3 million)
The Washington law requires that after receiving food, entertainment, and porterage services, the hotel must disclose to customers the percentage of the fee that goes to the workers. It was the position of the banquet flowers that between March 2018 and April 2020, they offered banquet-related services to the hotel, and the majority of them were not paid, or those who were paid did not receive the right amount. Through their representatives, Thomas & Solomon LLP (New York), they argued that the acts of the hotels were in contravention of the existing laws on the service fee. In its defense, Davenport Hotel argued that the said employees did not qualify to be among those who were supposed to receive the said monies.
According to Spokesman.com, the hotel agreed to settle the matter by paying a sum of $3 million without admitting liability. In the settlement, the law firm managed to identify 272 workers who were supposed to enjoy the benefits. The three million included a $750,000 legal fee for the law firm. Notably, the hotel agreed to make the settlement when it was one month away from being acquired by the KSL Capital Group.
7. Julie Dembitzky Versus Hampton Inn Woodbridge Hotel, A Slip-and-Fall Injury, ($4.75 million)
If you are visiting a hotel in Florida, the law demands that you should find the property clean and in the right condition. Any hotel’s responsibility is to ensure that it has taken all measures to eliminate any reasonable cause of injury to visitors. On March 26, 2025, the plaintiff, a former skier, stepped off an elevator while residing at the respondent’s place. Notably, the athlete was born without a left leg, so her prosthetic leg broke out in the fall. According to Yahoo! Finance, she did not suffer any broken bones. However, she sustained a serious injury to the articular cartilage (right knee), and it demanded that she undertake three surgical procedures. She sued the hotel through the Martin, Kane & Kuper law firm.
Besides suffering the injury, she was dismissed from her workplace where she was working as a software trainer-reason: she not no longer travels. The question on determination was whether the hotel had raised a potential warning on the conditions of the floor versus whether the plaintiff acted careless. The hotel took the chance of settling the matter before it went for full determination and agreed to pay her $4.75 million.
6. Ace Hotel Versus Ken Friedman, Financial Fraud ($5 million)
In October 2018, the Axe hotel sued Ken Friedman for cooking accounting records in one of their subsidiaries-the Breslin & John Dory Oyster Bar. In a suit seeking a $5 million compensation, the hotel alleged that the respondent misrepresented profits. The plaintiff alleged that the respondent was aware of a clause in the contract between the two parties, which alluded that if the restaurants they were running were not making enough profits, they would be closed, and the employees would lose their jobs. To prevent such a scenario, Friedman cooked the records even though he was making losses. The hotel also alleged that some mismanagement practices, such as double charging of service rooms and monies, were diverted to fund other businesses owned by the respondents. As per the Ace Hotel, the actions amount to high dishonesty and malicious misrepresentation of business facts.
5. Mrs. Jeannette Ortiz Versus Chipotle, Malicious Termination ($8 million)
Chipotle Mexican Grill is an American food chain that specializes in fast food. In 2015, it terminated one of its managers, the plaintiff, on the ground that she had stolen $626, which had been kept in a safe. Upon asking her superiors about the evidence they relied on, they alleged she had been captured on a surveillance tape. They told her it had been destroyed when she demanded to see it. Feeling aggrieved, she filed a lawsuit for wrongful termination. In 2018, a jury awarded her $8 million for wrongful termination. $6 million was for emotional distress, while the remaining amount was to cater to her wage losses. It also agreed that she was being targeted because she had claimed compensation for an injury she had sustained on her hand.
4. Washington Attorney General Versus Motel 6, Disclosure of Client information ($12 Million)
Hotels are expected not to give out client information without their consent. Between 2015 and 2017, Motel 6, according to NPR, gave out guest details to Immigration and Enforcement officers. This affected 80,000 guests, which led to improper questioning of the hotel’s visitors by ICE officers. According to the attorney general, Bob Ferguson, this led to unfair targeting of persons with Latino-like names. The end result is that innocent families were separated by ICE officers who would use the data to arrest and detain innocent people without questioning. Committing to the settlement of $12 million, the hotel stressed that it would not do this again and it would put enough measures to protect its guests.
3. Kathleen Ann Dawson Versus Hilton LLC &Larry Joe Clowers, Facilitating a Sexual Assault ($44 million)
The Cision reported that on November 2021, a Harris County Jury slapped the respondent with a $44 million verdict after it established that the hotel had placed vulnerable guest n the wrong which led to her sexual assault. The hotel was sued alongside the alleged attacker, Larry Clowers. The matter was bought to light after another guest called the police and informed them that she had noticed what appeared to be a man raping a woman in the hotel. Upon arrival at the hotel, the police found the plaintiff unconscious and intoxicated, and they had to use a wheelchair to transport her. The hotel’s security footage showed the plaintiff entering Mr. Clower’s room. The jury observed that the hotel failed to adhere to its key policy.
2. Erin Andrews Versus West End Hotel & Windsor Capital, Customer Stalking Case ($55 Million)
It is the responsibility of hotels to ensure they have taken enough measures to secure the privacy of their clients. According to the SI, the plaintiff, a Fox Sports broadcaster, was awarded $55 million in 2016 after she accused the respondents of failing to take enough measures to prevent a stalker, Michael David Barret, from stalking her. Her position was that David Barret was a renowned stalker who had pleaded guilty to the same offense in 2009, and the security apparatus of the two hotels should have been able to identify him. In penetrating the offense, in the respondent’s hotels, the stalker would create small holes in rooms next to the plaintiff and record videos of her changing her clothes. He posted them online, and many people saw them. According to Andrews, it cost her a lot of psychological torture and money.
1. “Jane Doe” Versus Hilton Worldwide, A lawsuit on Secretly Recording a client ($100 million)
If it gets the attention of CNN, then be sure that it is big. In December 2018, a woman identified as “Jane Doe” (to conceal her identity) sued Hilton Worldwide alleging that its employee recorded her when she was taking a shower and posted it on different pornographic sites. When she tried to have them pull it down, they blackmailed her. She said that the incident occurred in the Hampton Inn and suites, Albany, NY, where she was residing when taking her law exams in 2015.
She was unaware of the incident until September, when the material was uploaded on pornographic sites with her name and email address. Then, she added that people would send her messages requesting more photos of her. According to her fillings, when she did not buy the blackmail attempts, the person sent the video to her friends and college mates. The person she was unaware of was demanding $1,000 for every month of a year. She sued the Albany Hotel alongside Hilton Worldwide because it is the parent owner of the business.