A case does not have to be decided to be over. On August 28, 2026, Molly Tranchin filed two paragraphs in the Northern District of California and ended the lawsuit she had brought against the intimates brand EBY eleven weeks earlier. No judge ruled on whether a brand may run a creator’s licensed footage through an AI tool and post the result. No judge ruled on anything. The case died on a question about where Tranchin lives.

We covered the filing in July, in Influencer’s AI Deepfake Suit Against EBY Tests Creator Rights. This is what happened next, read from the docket rather than the coverage.

The short version

Tranchin, a Texas content creator who posts as FashionVeggie to roughly 400,000 Instagram followers, alleged that EBY took the modest user-generated content she delivered under a September 2025 agreement, altered it so that her breasts and nipples were visible through a sheer bra, and posted it directly to her own Instagram account under the whitelisting arrangement their contract allowed. She sued on June 9, 2026, pleading thirteen counts. On August 17, EBY moved to dismiss. On August 28, she withdrew the case herself.

The argument that ended it

EBY’s motion led with a jurisdictional problem, and it was not a small one. Tranchin’s own complaint described her as a permanent resident of Texas who “currently lives temporarily in Copenhagen, Denmark.” She had invoked federal diversity jurisdiction under 28 U.S.C. section 1332, which requires that the parties be citizens of different states.

For diversity purposes, citizenship follows domicile, not residence. Domicile is where you actually live combined with an intent to remain there indefinitely. And a United States citizen who is domiciled abroad is, in the language courts use, stateless: not a citizen of any state, and therefore not a party who can be on either side of a diversity case. If Tranchin had moved her domicile to Denmark, the court had no power to hear the dispute at all, regardless of how strong her claims were.

EBY did not have to prove she was domiciled in Denmark. It only had to show the complaint did not establish she was domiciled in Texas. The pleading offered no facts about a maintained Texas home or an intent to return, and that gap was enough to put the court’s power in doubt.

Eleven days later

On August 28, Tranchin filed a notice of voluntary dismissal without prejudice under Rule 41(a)(1)(A)(i), which a plaintiff may use unilaterally so long as the defendant has not yet answered or moved for summary judgment. The notice states plainly that, based on the arguments in EBY’s Rule 12(b)(1) motion, she understands the court lacks subject-matter jurisdiction, and that she intends to refile in a court of competent jurisdiction. Without prejudice means she keeps the right to bring the same claims elsewhere. As of this writing, no refiled complaint has surfaced.

The forum clause that was not enough

This is the part worth carrying into your own contracts. Tranchin was not in California by accident. The EBY agreement contained a mandatory forum selection clause requiring that any action arising under it be brought in the federal or state courts located in the Northern District of California, and EBY had irrevocably consented to personal jurisdiction there.

None of that mattered. A forum selection clause allocates where a dispute may be heard and waives objections the parties are free to waive. Subject-matter jurisdiction is not one of those. It is the court’s constitutional and statutory power to hear a category of case, and parties cannot consent it into existence, agree to it in advance, or forfeit an objection to its absence. A federal court is obliged to notice the defect on its own even if nobody raises it.

So a clause can send you to a federal courthouse that has no authority over your dispute. If you are signing an agreement with a federal forum clause, the practical question is not only where it points but whether a federal court there will actually have jurisdiction: complete diversity plus more than $75,000 at stake, or a genuine federal claim. Tranchin pleaded thirteen counts and every one of them was state law. There was no federal question to fall back on when diversity wobbled.

The other arguments, still unanswered

The rest of EBY’s motion never got a ruling, but it maps the terrain a refiled case will cross. EBY argued that California’s deepfake, publicity, and privacy statutes do not reach a Texas plaintiff suing a Delaware corporation headquartered in New York over conduct not alleged to have occurred in California. It argued that the aiding and abetting provision at Cal. Civ. Code section 1708.86(b)(3), added by AB 621, did not take effect until January 1, 2026, more than a month after the November 25, 2025 conduct alleged. It argued that the non-consensual pornography count is barred by section 1708.85(c)(1), which excludes material created under an agreement for public use and distribution, which is what UGC is. And it argued that the copyright count fails because Cal. Civ. Code section 980(a)(1) protects only works that are not fixed in a tangible medium, while anything fixed belongs to federal law and is preempted.

That last one is the quiet warning for creators. A delivered video is fixed. State common-law copyright will not carry an AI-alteration claim, which means the theory has to be built under the federal Copyright Act, and that route runs through registration and the unauthorized derivative work analysis. It is a harder, slower, and more expensive path than a state statute, and it is the path that is actually available.

A footnote that is not a footnote

Filed alongside the motion to dismiss was a one-page document titled Notice Regarding Use of Artificial Intelligence. In it, EBY’s counsel disclosed that multiple AI tools were used to assist in drafting portions of the motion, and committed to keeping records identifying which portions, as required by Magistrate Judge Peter H. Kang’s standing order for civil cases.

Sit with the shape of that. A creator sued a brand for using AI on her image without telling her. The brand’s lawyers used AI to write the defense and told the court in writing, because a judge required it. The obligation that was missing from the commercial relationship existed in the courtroom, and it existed because someone with authority wrote it down. That is a reasonable summary of where AI disclosure stands in 2026: mandatory where a rule reaches, voluntary everywhere else.

What is still open

Every question that made this case interesting survives it. Whether California’s deepfake statute reaches a licensed commercial relationship rather than a stranger’s fabrication. Whether whitelisting access, where the brand can post to the creator’s own account, changes the analysis of who published what. Whether an AI-altered version of licensed footage is an unauthorized derivative work. Whether a contractual right to one round of reasonable edits can be read to cover generative alteration. A dismissal without prejudice leaves all of it standing, waiting for the next plaintiff or for this one, refiled.

What to do about it before you need to

The contract lesson from July has not changed, and the ending has added one more. Write down what kinds of AI alteration are and are not permitted, and say that generative alteration is not an edit. Keep copyright in your submitted content and withhold the right to make derivative works, and register the work you care about so a federal claim is available to you. If a deal includes whitelisting, define what may be posted to your account and require your written approval of the final asset.

And read the forum clause as a practical question rather than a formality. Ask where it sends you, whether a court there can actually hear the case, and what your citizenship looks like on paper if you are living abroad or between homes. If you are a US citizen spending a year in another country, a domicile paragraph in your complaint is not boilerplate. It is the difference between a case and no case.

We will report the refiling if it comes.

Sources

Court records, Tranchin v. EBY, Inc., No. 3:26-cv-05559-PHK (N.D. Cal.):

  • Complaint, Tranchin v. EBY, Inc., No. 3:26-cv-05559-PHK (N.D. Cal. filed June 9, 2026), ECF No. 1.
  • Civil Cover Sheet, Tranchin v. EBY, Inc., No. 3:26-cv-05559-PHK (N.D. Cal. filed June 9, 2026), ECF No. 1-1.
  • Defendant EBY, Inc.’s Notice of Motion and Motion to Dismiss, and Memorandum of Points and Authorities in Support, Tranchin v. EBY, Inc., No. 3:26-cv-05559-PHK (N.D. Cal. filed Aug. 17, 2026), ECF No. 22.
  • Notice Regarding Use of Artificial Intelligence, Tranchin v. EBY, Inc., No. 3:26-cv-05559-PHK (N.D. Cal. filed Aug. 17, 2026), ECF No. 22-1.
  • Notice of Voluntary Dismissal Without Prejudice, Tranchin v. EBY, Inc., No. 3:26-cv-05559-PHK (N.D. Cal. filed Aug. 28, 2026), ECF No. 26.

Reporting and commentary:

This article is editorial analysis, not legal advice. For questions about your specific situation, consult a qualified attorney.