Souza v. Exotic Island Enterprises, Inc., 21-2149

Background

Plaintiffs are current/former professional models whose images were used without consent in social‑media posts promoting Mansion Gentlemen’s Club, operated by Exotic Island and Keith Slifstein; the posts were published by a third‑party vendor (Think Social/Exclusive Events).
Posts (2014–2018) paired revealing photos of plaintiffs with promotional captions; plaintiffs claim reputational and lost‑earnings harm.
Plaintiffs sued under the Lanham Act (false endorsement §1125(a)(1)(A) and false advertising §1125(a)(1)(B)) and New York Civil Rights Law §§50–51 (right of publicity); district court granted summary judgment for defendants and excluded portions of plaintiffs’ expert (Martin Buncher).
The district court relied on this Circuit’s Electra precedent holding weak recognition of models defeats false endorsement claims; it also applied Lexmark’s zone‑of‑interests/proximate‑cause framework to reject the false advertising claim.
Most state publicity claims were held time‑barred under New York’s one‑year CPLR §215(3)/single‑publication rule; the district court declined supplemental jurisdiction over the remaining timely publicity claims.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
False endorsement — strength of mark (recognizability) & expert evidence	Models argue the court wrongly treated “strength” as mere fame/recognizability and improperly excluded Buncher’s survey evidence	Defendants argue plaintiffs lack recognizability and the expert survey was methodologically unreliable	Court: Electra controls; recognizability is the operative strength inquiry here; district court did not abuse discretion excluding Buncher; strength factor favors defendants.
False endorsement — actual confusion & bad faith (Polaroid balancing)	Plaintiffs contend the Polaroid factors were misweighed and court should have found a genuine dispute	Defendants contend (and court found) no reliable evidence of actual consumer confusion and no bad‑faith targeting of specific plaintiffs	Court: Actual confusion evidence unreliably founded; bad faith factor favors defendants; Polaroid balancing (following Electra) supports summary judgment for defendants.
False advertising — zone of interests / injury & proximate cause (Lexmark)	Plaintiffs claim reputational loss and loss of licensing/fees (fair market value) from unauthorized image use satisfy Lanham Act injury	Defendants say plaintiffs are not direct competitors, plaintiffs offer no evidence of reputational or sales diversion injury, and lost licensing is not the kind of consumer‑deception injury Lexmark protects	Court: Applying Lexmark + Merck, plaintiffs are not direct competitors; they failed to show economic/reputational injury proximately caused by deception (speculative lost opportunities or unpaid licensing do not suffice).
Right of publicity — statute of limitations and supplemental jurisdiction	Plaintiffs argue the one‑year CPLR §215(3) limitation does not apply to publicity (property) claims and ask for state‑law certification	Defendants say NY treats §§50–51 publicity claims as encompassed by the statutory privacy cause of action subject to the one‑year rule	Court: New York law treats right of publicity as encompassed by §§50–51; §215(3)’s one‑year single‑publication accrual applies; most claims time‑barred; district court permissibly declined supplemental jurisdiction over remaining claims.

Key Cases Cited

Electra v. 59 Murray Enters., Inc., 987 F.3d 233 (2d Cir. 2021) (controls recognizability analysis and affirmed summary judgment on similar facts)
Lexmark Int’l, Inc. v. Static Control Components, Inc., 572 U.S. 118 (U.S. 2014) (zone‑of‑interests and proximate‑cause limits on Lanham Act standing/injury)
Polaroid Corp. v. Polarad Elecs. Corp., 287 F.2d 492 (2d Cir. 1961) (sets out the eight Polaroid likelihood‑of‑confusion factors)
Merck Eprova AG v. Gnosis S.p.A., 760 F.3d 247 (2d Cir. 2014) (false‑advertising injury requires diversion of sales or lessening of goodwill; evidence required unless direct competitor)
Car‑Freshner Corp. v. Am. Covers, LLC, 980 F.3d 314 (2d Cir. 2020) (de novo review of legal judgments in Polaroid analysis)
Kelly‑Brown v. Winfrey, 717 F.3d 295 (2d Cir. 2013) (false endorsement protects against consumer belief of endorsement/sponsorship)
Tiffany & Co. v. Costco Wholesale Corp., 971 F.3d 74 (2d Cir. 2020) (procedural guidance on Lanham Act summary judgment and factual findings)
Two Pesos, Inc. v. Taco Cabana, Inc., 505 U.S. 763 (U.S. 1992) (discussion of inherent distinctiveness and secondary meaning)