September 19, 2021

Volume XI, Number 262


September 17, 2021

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Fyre Festival Merchandise Goes Up for Sale This Week… But Where Does That Leave the Laws Governing the Festival’s Founder, Endorsers & Influencers?

Earlier this week, it was announced that various items, such as hats, wristbands, shirts and other merchandise from the infamously ill-fated 2017 Fyre Festival were going up for auction.[1] Originally intended to be sold at the actual festival, over 100 items were seized from organizer Billy McFarland by the US Marshal, with the intent to use the sale proceeds to the victims of his crimes. The online auction will last through August 13, and bidding on the items has dramatically increased, with some Fyre-printed hats that were originally marked for $15 now being listed as over $300. The US Marshal’s office stated that the items were kept by McFarland with the intent to sell the items and allegedly utilize those funds to commit “… further criminal acts while he was on pre-trial release” and instead of this money benefiting McFarland, it will act as the beginning of restitution for some of the unfortunate victims of his scheme.[2]

So how did it all begin? In 2017, then-entrepreneur Billy McFarland and rapper Ja Rule organized a festival to promote a music booking app called Fyre – their intent was to hold the festival in the Bahamas in April 2017, boasting a list of attractions, including a roster of musical acts such as Blink-182 and Major Lazer, luxury domes as sleeping accommodations, and high-end catered meals.[3] To advertise the event, McFarland orchestrated the filming of a commercial and a photo shoot in the Bahamas featuring some of the world’s top models, including Bella Hadid and Kendall Jenner, which they later posted to their social media accounts. Many online users immediately purchased tickets to the festival after seeing the models’ posts, which contained featured hashtags of #fyrefestival and provided links to the website where the tickets were sold. Many festivalgoers were immediately sold on the online presentation of a music festival with luxury food and lodging in the sunny Bahamas, and were under the assumption that the models that posted about the event would also be present.[4] Yet many of the models, (with the exception of Emily Ratajkowski) failed to label their posts under the hashtag #ad, which is now required by the Federal Trade Commission (FTC) for paid posts.[5] Nevertheless, flocks of people gathered to the Bahamas for the festival, only to discover pieces of sliced cheese instead of promised meals crafted by celebrity chefs, flimsy tents which were soaked from heavy rainfall in lieu of luxury villas or domes, and no showing of any of the assured musical acts.

Ire Festival: Lawsuits Against Organizers & Founders… Where Do They Stand Now?

Needless to say, the thousands of people who showed up to the festival were not happy. Many guests filed lawsuits against McFarland and Ja Rule, including one suit filed in May 2017 for $100 million by plaintiff Daniel Jung, who initially sought class action status with over anticipated 150 plaintiffs to be joined in.[6] That suit is being handled by entertainment lawyer Mark Geragos for breach of contract claims, yet there have also been other attendees who filed lawsuits in New Jersey, Florida, and Boston for various claims such as fraud and negligence. There was little coverage for a couple of years regarding the lawsuit filed by Jung, until last year, when Ben Meiselas of Geragos & Geragos gave an update on the case, indicating that as of 2019, there were now over 1,000 clients added to the suit.[7] He also stated that the primary defendants are not only McFarland and Ja Rule, but added that his clients are also suing Grant Margolin, who was the Chief Marketing Officer for the festival. Meiselas indicated that several events slowed the civil proceedings down, including Fyre Festival LLC filing for bankruptcy and the criminal trial of McFarland himself. Then, this year, Jung asked the court to grant a default judgment against McFarland for an order to pay him and the rest of the class $7.5 million, because McFarland allegedly failed to respond to the complaint.[8] There have been no reports as to the judge’s response, but it is clear that many will be watching.

McFarland & Mayhem: The Organizer’s Criminal Trial

Almost immediately after the Fyre Festival fiasco, McFarland, in the midst of immediate civil lawsuits that were filed against him, being shamed on social media, and labeled as the target of widespread public outcry, still continued to profit off of the unknowing public with his schemes. In 2017, McFarland sold nearly $100,000 of fake tickets to exclusive events set to take place in 2018, such as the 2018 Super Bowl, the Grammy Awards, and the Coachella Music Festival, to name a few.[9] In March 2018, McFarland pleaded guilty to two counts of wire fraud and using fake documents to convince investors to pump over $20 million into his company. Then, just a few months later in June 2018, McFarland was charged with selling the fraudulent tickets while out on bail and awaiting his sentence for his first charge. McFarland was also ordered to pay back the $26 million he admitted to stealing from investors[10] and was sentenced to six years in prison. McFarland is currently serving his time at Elkton Federal Correctional Institution in Lisbon, Ohio, and in April of this year, he was denied compassionate release after contracting COVID-19 in the prison.

How the World’s Top Models Are Now Paying the Price for their Posts

McFarland is not the only person who has had to face some serious consequences for his involvement in the ill-fated festival. Many of the models that participated in the video advertisements, photoshoots, and social media posts have tried to right some of the major wrongs committed in various ways. First and foremost, whether motivated by moral regret or business damage control, many of the models involved removed all traces of their endorsement of the festival once it ended so disastrously. Kendall Jenner deleted all forms of evidence that she was involved, particularly on Instagram, where she has over 100 million followers.[11] Other women have given the sums of money they were compensated to greater causes, such as model Hailey Baldwin, who claimed earlier this year that she donated the sum that she was paid for endorsing the festival to an undisclosed charity.[12] Some models have publicly articulated their sorrow in misleading attendees through their posts, including Bella Hadid, who issued an apology in April 2017, expressing her regret in her involvement in the festival and proclaiming she only had good intent in her participation.[13] Finally, some models have had to pay the price in court as a result of their association. Specifically, Kendall Jenner (who was paid $275,000 to endorse the festival in 2017) was sued last year by Gregory Messer, the court-appointed trustee for Fyre Media, for failing to disclose to her social media followers that she was being paid for advertising the festival and for misleading them as to the nature of the event.[14] This past May, Jenner agreed to pay a $90,000 settlement for her involvement in promoting the festival.[15]

Influence Over Influencers: How the Fyre Festival Changed Laws Regarding Social Media Ads

In 2019, two documentaries were released regarding the festival on Netflix and Hulu, “Fyre: The Greatest Party the Never Happened” and “Fyre Fraud,” respectively, and sparked not only renewed interest in the case, but changes in the law about advertisements on social media apps. Influencer marketing has now become a reported multi-billion dollar industry,[16] and up until recently, there were very few legal guidelines set in place for it. Social media influencers are typically regulated by the FTC, which issued a new guide in November 2019 called “Disclosures 101 for Social Media Influencers”, that outlines how influencers must disclose sponsorships and ads to their followers.[17] Influencers are required to comply with these guidelines, which indicate that “… if an influencer is being paid by a company to promote its product on social media, it must be disclosed somewhere on the post that the influencer is being paid.”[18] The guidelines state that these rules are intended to protect consumers from deceptive ads, a move which many state has been strongly needed.[19] If one of Kendall Jenner’s many followers sees she that has posted about a particular product (but she has not disclosed she is being paid to advertise that company’s item), then they may be more influenced to purchase the product if they believe Jenner is a genuine fan. As such, the rules state that influencers must place “simple and clear” ad disclosures in an easy-to-spot fashion, such as placing #ad in the beginning of a caption or repeating it on a livestream video. Additionally, many influencers have been using the “paid partnership” feature on Instagram, which can be seen at the very top of a user’s post and helps to eliminate any potential public confusion or violations of the FTC.

The Fyre Festival brought economic loss and damages to not only the attendees, but many of the companies, workers, and businesses involved. Caterer Maryann Rolle lost her life savings after spending her own money in order to provide 1,000 meals to the festival’s attendees, and was thankfully able to recoup the amount after a GoFundMe page was set up once viewers watched her story unfold in the Netflix documentary.[20] It remains to be seen as to how the civil class action lawsuit will proceed, and even though the festival caused so much negativity, the silver lining is that it has caused lawmakers to become more stringent about regulations regarding social media posts and hopefully influencers, users, and the public alike will exercise a greater deal of caution when scrolling through their latest ad. 

[1] Here.

[2] Here.

[3]  Here.

[4]  Here.

[5] Here.

[6] Here.

[7] Here.

[8] Here.

[9] Here.

[10] Here.

[11] Here.

[12] Here.

[13] Here.

[14] Here.

[15] Here.

[16] Here.

[17] Here.

[18] Here.

[19] Here.

[20] Here.

© The National Law Forum. LLCNational Law Review, Volume X, Number 219

About this Author

Elizabeth Vulaj IP Litigation Lawyer

Elizabeth Vulaj is an Albanian-American attorney born and raised primarily in New York City. 

Elizabeth attended Bard High School Early College on the Lower East Side of Manhattan, where she obtained both her High School Diploma and Associate of Arts Degree in four consecutive years. She transferred her academic credits to SUNY Purchase, where she graduated with her Bachelor of Arts degree in journalism at just age 19. She then matriculated at New York University, where she obtained her Master of Arts degree in journalism at age 21 on a partial academic scholarship. 


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