A swimwear brand and a group of influencers have dodged a lawsuit accusing them of misleading consumers by promoting products on Instagram without disclosing that the posts were paid for. In an opinion handed down on August 1, the U.S. Court of Appeals for the Eleventh Circuit upheld a Florida district court’s dismissal of claims against Luli Fama and several influencers, finding that while the consumer-plaintiff’s allegations resembled a fraud case, they did not meet the strict requirements for pleading fraud in federal court.
The Background in Brief: The dispute got its start in 2022 when Alin Pop filed a proposed class action, claiming that Luli Fama and a group of influencers, including Tequila Taylor, Cindy Prado, Priscilla Ricart, Haley Ferguson, Gabrielle Epstein, Alli Martinez, and Alexa Collins, deceived consumers by posting undisclosed sponsored content for the brand on Instagram. Pop alleged that he purchased Luli Fama swimwear based on what appeared to be genuine, unpaid recommendations from influencers he followed, only to later learn that the posts were actually part of a paid campaign.
According to Pop, this strategy – designed to mimic organic consumer enthusiasm – led him and other shoppers to overpay for products they otherwise would not have bought.
A Fraud Claim or Consumer Protection?
In its opinion, the Eleventh Circuit found that Pop’s lawsuit essentially accused the company and social media influencers of engaging in fraud, which meant it had to meet the heightened pleading standard, which requires a plaintiff to spell out the “who, what, when, where, and how” of the alleged misconduct. The problem, according to the appeals court, was that Pop’s complaint did not come close to meeting that standard. It did not identify which influencer posts he saw, when he saw them, which products he bought, or how those posts actually influenced his purchase. Without those specifics, the court said, the claim couldn’t stand.
The panel also clarified that while Florida’s consumer protection law, which was the basis of Pop’s complaint, does not require a plaintiff to prove common law fraud, a claim that closely mirrors fraud (as Pop’s did) still has to follow the stricter pleading rules. In the court’s words, Pop’s complaint “closely track[ed] the elements of common law fraud,” with his theory being rooted in omissions: that the influencers failed to disclose material financial relationships with the brand.
To strengthen his case, Pop pointed to Section 5(a) of the Federal Trade Commission (“FTC”) Act, which prohibits “unfair or deceptive acts or practices,” arguing that the defendants’ failure to disclose paid endorsements was inherently deceptive under federal advertising standards. He claimed this should automatically trigger a violation of Florida’s consumer protection law.
But the court was not convinced. While it acknowledged the relevance of the FTC endorsement guidelines, it made clear that citing them is not enough – plaintiffs still need to include specific, detailed facts to meet the stricter requirements for pleading fraud. The absence of factual specificity – including which influencers he relied on, when he saw the posts, which products he purchased, or how the undisclosed sponsorships materially influenced his decision – proved fatal.
Disclosure Rules, Legal Gaps
The appeals court’s opinion highlights a key tension in the well-established realm of influencer marketing: while the FTC’s endorsement guidelines stress disclosure of paid relationships, courts are not automatically in step. Specifically, a failure to follow the FTC’s rules will not, on its own, lead to liability unless plaintiffs can clearly connect the dots between a brand’s marketing tactics and consumer harm.
At the same time, the court’s decision makes clear that influencer promotions are not immune to scrutiny. The panel of judges accepted that undisclosed endorsements can, in theory, support a deceptive trade practice claim. But vague allegations will not suffice; plaintiffs must point to specific posts, specific influencers, and specific harm.
Still yet, the court treated the influencers not as bystanders, but as potentially active participants in the alleged scheme, indicating that as creators play a bigger role in brand-building, their legal exposure may grow in tandem.
THE TAKEAWAY: For brands and influencers alike, the Eleventh Circuit’s decision serves as a reminder that undisclosed paid posts remain a legal risk but challenging them in court requires precision. A compelling narrative is not enough; without detailed allegations of how consumers were misled, these cases will not get far.
The case is Pop v. LuliFama.com LLC, 24-11048 (11th Cir.).
Share
