If you have ever signed a modeling release without reading the fine print on 'edits,' pay attention to what just happened in a New York courtroom. A judge has allowed Rainbow Shops to keep running AI-altered images of a model who says she never posed for them, while her lawsuit plays out. Rainbow's next move was bolder still: it told the court that the model's own contract already gave it permission to do this, no matter what technology was used to do it. This is the case to watch if you sign releases for a living, because it is the first real test of whether decades-old contract language can quietly absorb generative AI.
The claim
The case is Pujols v. Rainbow Shops, Inc., pending in New York Supreme Court. Model Francheska Pujols did a catalog shoot for Rainbow in 2024 against a plain white backdrop. She alleges Rainbow later used AI to generate new images of her in poses and settings from that shoot never happened, images her complaint calls crude and damaging to her reputation as a professional model. Her theory is straightforward: the release let Rainbow make minor edits to the photographs she actually posed for, not manufacture new depictions out of whole cloth. Pujols filed suit in New York state court in June 2026, accusing Rainbow of exceeding the scope of their September 2024 modeling release by using AI to create altered versions of the original photographs she posed for and approved, arguing the agreement permitted certain modifications but did not authorize entirely new AI-generated depictions featuring her recognizable likeness with digitally altered hair, clothing, body positioning, backgrounds, poses, and compositions. On July 16, the court handed her a setback. The court denied Pujols' motion for a preliminary injunction, declining to immediately bar Rainbow from using the challenged images while the litigation proceeds. Her motion for a preliminary injunction was denied by the New York Supreme Court, in a case alleging that Rainbow used artificial intelligence to create images of her in poses and settings she never appeared in, including at least one image exposing her undergarments. Rainbow has since pressed its advantage. Rainbow argues in a new motion to dismiss that its model release gives it broad rights to use images, regardless of the tech involved, and that existing contract law should decide the case.
Why it matters
This is not really a case about artificial intelligence. It is a case about the words a model, or a designer, signed years before anyone thought to ask what those words might permit a machine to do. The case signals that early AI advertising disputes may turn less on AI technology than on the terms of parties' existing contracts. That should worry anyone who has ever waved through a release with a phrase like 'minor edits' or 'stylistic alterations,' assuming it meant cropping and color correction. A brand's lawyers can now argue that same phrase covers full synthetic recreation. A recently filed lawsuit against Rainbow USA raises an increasingly important question for brands, agencies, retailers and content creators using generative AI tools: when does an authorized modification of a licensed image become an entirely new depiction of an individual requiring separate permission, as alleged in a complaint claiming Rainbow exceeded the scope of a license agreement. New York has tried to close this gap by statute, at least for models working with agencies. Since last June, agencies have faced new obligations under state law. Since June 19, modeling agencies have been required to register as part of the New York State Fashion Workers Act, which prohibits model management companies from creating or altering a model's digital likeness through AI without clear, conspicuous and separate written consent from the model. But that statute governs agencies, not every retailer, and it does not retroactively rewrite a 2024 release. Independent designers who license their own images, or who hire models directly without an agency in between, are not automatically covered by it. If your release is silent on AI, a court may read that silence generously, in the brand's favor, not yours.
What to watch
Rainbow's motion to dismiss is now the real fight. If a New York judge accepts the argument that old edit clauses stretch to cover generative AI outright, expect similar language to show up in defense filings across the industry almost overnight. A parallel case, Molly Tranchin's suit against underwear brand EBY in federal court in California, raises the identical question from the other side, whether a brand's contractual right to make 'reasonable edits' extends to AI-altered content the creator never approved. Watch for a ruling on Rainbow's motion in the coming months, and watch your own paperwork now. If you are a designer or model signing releases today, do not rely on the phrase 'edits.' Ask, in writing, whether AI-generated derivative images are covered, and if the answer is vague, treat that vagueness as the brand's leverage, not yours.