Motel 6 has agreed to pay $7.6 million to settle a class-action lawsuit filed by a Latino civil rights organization after the motel chain systematically shared guest information with U.S. Immigration and Customs Enforcement agents.
The company will compensate Motel 6 guests who were questioned by ICE or placed in deportation proceedings. After paying these damages to plaintiffs in the class, remaining funds will go to nonprofit organizations serving immigrants through legal aid and scholarships.
In a practice revealed by Phoenix New Times last year, Motel 6 locations shared guest lists with ICE officers on a nightly basis, leading to the arrest of at least 20 undocumented guests in Phoenix.
In January, the Mexican American Legal Defense and Educational Fund (MALDEF) sued Motel 6 and parent company G6 Hospitality in U.S. District Court in Arizona on behalf of eight anonymous Latino plaintiffs who were detained.
Attorneys said that by conspiring with ICE, Motel 6 employees discriminated against Latino guests. The motel chain violated their Fourth Amendment right to remain free from unreasonable searches, as well as Arizona privacy and consumer-protection laws, MALDEF argued.
All of the anonymous plaintiffs represented by MALDEF were detained by ICE after they stayed at Motel 6 locations in Phoenix, and one guest was deported. It's unclear how many people may be eligible for compensation because they were interrogated or placed in deportation proceedings, but according to the settlement, they may be numerous.
"Motel 6 fully recognizes the seriousness of the situation and accepts full responsibility for both compensating those who were harmed and taking the necessary steps to ensure that we protect the privacy of our guests," G6 Hospitality and MALDEF said in a joint statement to New Times.
MALDEF reached a settlement with Motel 6 over the summer, but the terms of the settlement have not been disclosed until now.
Under the settlement, which was filed for the judge's preliminary approval on Friday, three groups of people who came into contact with the Motel 6-ICE dragnet are set to receive monetary damages.
Each person who stayed at a Motel 6 location between February 1, 2017, and November 2, 2018, whose information was turned over to immigration authorities will receive $50, up to a total of $1 million for the class.
The largest monetary damages will go to Motel 6 guests who were placed in immigration removal proceedings because of the budget chain's collusion with ICE. These guests will receive at least $7,500 each, up to a class-wide total of $5.6 million.
Guests who were not placed in removal proceedings but were interrogated or questioned by ICE will receive $1,000 each, up to $1 million for the class.
Motel 6 also agreed to donate any unclaimed funds from the settlement to certain immigrant-rights nonprofit organizations approved by the court.
The two parties proposed that the remaining funds are distributed as follows: 40 percent to the Arizona-based Florence Immigrant and Refugee Rights Project, 40 percent to the Washington-based Northwest Immigrant Rights Project, 10 percent to the National Immigrant Justice Center, and 10 percent to TheDream.US, which provides college scholarships for undocumented youth.
Even more significant are stipulations imposed under the settlement as a two-year consent decree that are designed to prevent Motel 6 from providing guest information to ICE in the same sweeping way again.
Motel 6 must not share guest information with ICE absent a warrant, subpoena, or the immediate risk of harm to a guest, employee, or another individual, according to the settlement. Additionally, these warrants and subpoenas from immigration officials must be handled by either Motel 6's legal department or other individuals trained to comply with the policy.
The company is also required to establish a 24-hour hotline to assist employees when they receive a request for guest information from immigration authorities, and create "an online mechanism" for guests to report when they believe the policy may have been violated.
Likewise, the budget motel chain has to establish a standard across the brand to prohibit all franchise locations from giving guest information to ICE.
"As part of the agreement, Motel 6 has implemented additional controls to protect private information and enhance corporate oversight in cases where law enforcement requests information, including when lawful requests are made," G6 and MALDEF said in the statement. "The agreement, if approved by the court, would also establish a claims process for both named plaintiffs and others who were impacted by the sharing of guest information with immigration authorities."
Because of the costs and uncertainty of litigation, both sides agreed to settle, according to the joint motion filed in U.S. District Court.
However, the filing notes that Motel 6 "vigorously" denies any wrongdoing or liability. "Defendants deny that they had or employed a policy and/or practice that was discriminatory, unconstitutional or violative of any state laws," the settlement states.
The terms of the settlement remain subject to approval by U.S. District Judge David G. Campbell. Motel 6 has agreed to pay $300,000 in attorney's fees and costs to attorneys for MALDEF, plus up to $1 million to cover the costs of distributing notice of the settlement and administering the claims.
Founded in 1968, MALDEF is an influential legal nonprofit dedicated to defending the civil rights of Latinos. Along with the American Civil Liberties Union, MALDEF participated in the racial-profiling lawsuit against former Maricopa County Sheriff Joe Arpaio, which led to the pivotal guilty verdict for the sheriff's office in Melendres v. Arpaio in 2013.
Prior to MALDEF filing the lawsuit against Motel 6, Washington attorney general Bob Ferguson sued the company in January in King County Superior Court after his office conducted its own investigation following New Times' reporting.
Contradicting Motel 6's claim that the guest list practice was limited to two locations in Phoenix, Ferguson announced that six corporate-owned Motel 6 locations in Washington had been providing thousands of guests' information to ICE.
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In an interview on Monday, MALDEF president and general counsel Thomas Saenz said his organization is pleased that there will be "a significant pool of money" to compensate victims of the Motel 6 practice. The two-year consent decree will allow oversight of the company's policy changes to prevent this from happening again, he said.
Nevertheless, it's hard to quantify the fallout from the Motel 6-ICE coordination, Saenz explained, especially for those guests who were placed in deportation proceedings as a result.
"Obviously, some of them have suffered some very serious and almost incalculable effects because of what happened," Saenz said. "But they are gratified that they will receive some compensation for those damages."