Model sues retailer over AI-generated likeness

New York City model Francheska Pujols sued retailer Rainbow USA (Rainbow Shops) in New York State Supreme Court, alleging the company used AI-generated images of her in sexualized poses she never agreed to after her modeling contract expired, according to the New York Post, WWD, and PetaPixel. Pujols says her original photos were taken against a plain white background in neutral poses, while the ads that ran showed an AI-generated version of her likeness in scenes including straddling a barstool and seated with one leg raised. In an affidavit cited by PetaPixel, Pujols states her contract covered only images taken during the actual photo shoots and "does not in any way authorize the creation of entirely new images, scenes, poses, or compositions that did not exist in the original content." Rainbow's chief digital officer, David Cost, told Business Insider, as reported by PetaPixel, that the company is "responsibly evaluating emerging AI technologies in the marketplace" and that it "has acted appropriately and in accordance with its commitments, including contracts signed by models."

1. May 22, 2026

   Pujols files her lawsuit against Rainbow USA in New York State Supreme Court.

2. May 29, 2026

   Pujols withdraws the case to pursue a private settlement with Rainbow.

3. June 15, 2026

   After settlement talks did not resolve the dispute, Pujols refiles the case at New York State Supreme Court, per WWD.

New York's Fashion Workers Act, effective since June 19, 2025, requires clients to obtain a model's clear, separate written approval before creating or using a "digital replica," defined as a significant AI-enhanced representation of a model's face, body, or voice, and excludes only routine edits like color correction. The law is enforced by the state Department of Labor, carries civil penalties starting at $3,000 per violation, and gives models a private right of action, meaning Pujols' case could test how that consent requirement applies against an existing modeling contract that Rainbow says already covers the images.

PetaPixel, citing Business Insider's reporting, says the dispute follows a June 2025 email in which Rainbow's studio manager, Phil Caraway, told models the company had begun "styling certain products, and generating avatars, with the assistance of AI" and that fewer freelance models would be needed over time. Several other Rainbow models reportedly told Business Insider they separately noticed AI-generated lookalikes of themselves in the retailer's marketing after their bookings slowed, suggesting Pujols' case may not be an isolated dispute.

Teams building or deploying likeness-generation tools for commercial clients should treat existing photo-usage contracts as insufficient authorization for AI-generated digital replicas, particularly in New York, and should build explicit, separately documented consent capture into any workflow that reuses a person's photographed likeness to generate new poses or scenes.

Track the refiled case's progress in New York State Supreme Court, including whether Rainbow's contract language is found to cover AI-generated derivatives, and whether other Rainbow models named in Business Insider's reporting file similar claims. Also watch whether other retailers adjust model contracts or AI-generation practices in response to Fashion Workers Act enforcement.