Category: Rule 11 Sanctions

Fifth Circuit Sanctions Attorney for Hallucinated Reply Brief

Fifth Circuit Sanctions Attorney for Hallucinated Reply Brief

The Fifth Circuit recently decided Fletcher v. Experian Information Solutions, LLC No. 25-00086, (January 6, 2026) itself an appeal dealing with a sanctions issue. Unfortunately, the court noticed potentially spurious or hallucinated citations in the reply brief and issued an order to show cause. On February 18, 2026, the court sanctioned counsel $2500. This is the pertinent discussion:

“But a problem remained. Counsel for plaintiff and a member of the Jaffer & Associates law firm, had filed a reply brief on appeal containing numerous inaccurate citations, quotations, and statements of fact. We issued a show-cause order, enumerating 16 instances of fabricated quotations and 5 additional serious misrepresentations of law or fact. We directed Counsel, the only attorney to sign the brief, to “explain whether and how she verified the accuracy of the propositions in her brief.” We strongly suspected that Counsel had used AI to draft a substantial portion—if not the entirety—of her brief. 

Counsel’s response was disappointing. She asserted that she had “relied on publicly available versions of the cases, which [she] believed were accurate.” Believing that response to be incredible on its face, the court directed Counsel to answer additional questions. Counsel answered these questions, noting that she “endeavored to answer each question directly and transparently.” We address each question and Counsel’s response in turn.

First, when asked when she became aware of the inaccuracies in the brief, Counsel replied that it was at the time of our show-cause order. We do not at this time have reason to doubt that Counsel first became aware of the inaccuracies when we pointed them out. Of course, if Counsel had discovered the inaccuracies in her reply brief in the three months between its submission and our show-cause order, she should have immediately alerted the court and sought leave to file a correct brief.

Second, when asked what “publicly available versions of the cases” had led to the inaccuracies described above, Counsel named several well-known legal databases. The court does not find it credible that these sources produced the hallucinated quotations that appeared in Counsel’s brief. The first source, Google Scholar, does not contain summaries of legal cases that could contain inaccurate quotes. While the second, third, and fourth sources—CourtListener, Justia, and FindLaw—do provide legal case summaries, we have reviewed the summaries for each case cited in Counsel’s reply brief, and the problematic quotations and propositions are nowhere to be found. The remaining two sources, Casetext, which has been spun off into Thomas Reuter’s CoCounsel, and vLex, are both generative AI products.

To the extent these products generated the inaccurate summaries, Counsel’s response is misleading in several respects. For one, in her initial response, Counsel stated that she relied on “publicly available versions of the cases” and that “certain paraphrased summaries did not match the reporter text.” Neither of these descriptions fairly characterizes an AI-generated sentence. In addition, if these products generated the hallucinated quotations, they are not fairly characterized as “free online case repositories,” the use of which phrase suggested that these quotations came from summaries posted that could lead others astray. Further, Counsel did not even mention AI in her first response to the court.

Third, when asked specifically about whether she used AI and how she verified the accuracy of the case citations, Counsel finally admitted to the use of AI, though she neglected to do so in her initial show-cause response. We do not find it credible that Counsel used AI solely to “help organize and structure [her] arguments and to break up overly long paragraphs.” Even when asked directly, Counsel did not explain the steps she took to verify the factual assertions in her brief, so the court concludes that she took none.

Fourth, when asked about inaccurate assertions of record facts, Counsel provided no explanation of how “publicly available sources” could have caused record facts to be inaccurate. She had two such factual misstatements in her reply brief.

Fifth, when asked how the paraphrased summaries caused the inaccurate citations and quotations, Counsel continued to attribute the inaccurate quotations to “paraphrased summaries,” which she claims to have “mistakenly believed . . . reflected the actual language of the cases.” However, Counsel did not point this court to a single one of those summaries. We have put tremendous effort into attempting to find where these summaries could be located and have been unable to find them. To the extent Counsel is referring to a case summary generated by AI as a “paraphrased summar[y],” her response is evasive, misleading, and sanctionable.

In sum, the court finds that Counsel used artificial generative intelligence to draft a substantial portion—if not all—of her reply brief and failed to check the brief for accuracy. It is also likely that she used artificial generative intelligence in her response to the show-cause order. Had Counsel accepted responsibility and been more forthcoming, it is likely that the court would have imposed lesser sanctions. However, when confronted with a serious ethical misstep, Counsel misled, evaded, and violated her duties as an officer of this court.

Modern generative AI may be a new technology, but the same sanctions rules apply, and the rules we have are well equipped to handle these types of cases.[10] First, Rule 46(c) allows us to discipline an attorney who practices before us for “conduct unbecoming a member of the bar or for failure to comply with any court rule.” Discipline under Rule 46(c) may include monetary sanctions. In re Violation of Rule 28(d), 635 F.3d 1352, 1360 (Fed. Cir. 2011); see 16AA Wright & Miller’s Federal Practice and Procedure § 3992.2 (5th ed. 2025).

Conduct “unbecoming a member of the bar” is broad and includes making frivolous arguments and misrepresenting facts or law. See, e.g., United States v. Martinez-Martinez, 1999 WL 1330642, at *1 (5th Cir. Dec. 15, 1999) (show-cause order under Rule 46(c) for misrepresenting “a critical fact relating to jurisdiction”); Waldon v. Wal-Mart Stores, Inc., Store No. 1655, 943 F.3d 818, 825 (7th Cir. 2019) (noting that “conduct unbecoming a member of the bar” includes “deliberately misleading the court or displaying egregious misjudgment”).

The conduct at issue in this case is certainly “unbecoming a member of the bar.” Fed. R. App. P. 46(c). As discussed above, Counsel failed to check her own brief before submitting it, leading her to repeatedly misrepresent the law to the court. Cf. Fed. R. Civ. P. 11(b) and (c) advisory committee’s note to 1993 amendment (“The rule . . . require[s] litigants to `stop-and-think’ before initially making legal or factual contentions . . . . A litigant’s obligations . . . include reaffirming to the court and advocating positions contained in those pleadings and motions after learning that they cease to have any merit.”); Tex. Disciplinary Rules Prof’l Conduct R. 3.01 (“A lawyer shall not . . . assert or controvert an issue [in a proceeding], unless the lawyer reasonably believes that there is a basis for doing so that is not frivolous.”); Id. 3.03(a)(1) (“A lawyer shall not knowingly . . . make a false statement of material fact or law to a tribunal”); Id. 8.04(a)(3) (A lawyer shall not “engage in conduct involving dishonesty, fraud, deceit[,] or misrepresentation”).

Second, we have the “inherent power to impose sanctions for abuse of the judicial process.” Anderson, 953 F.3d at 315; see also Amarsingh v. Frontier Airlines, Inc., 2026 WL 352016 at *6 (10th Cir. Feb. 9, 2026) (noting a court’s inherent authority to sanction in the context of a brief with AI-hallucinated citations). Submitting a brief riddled with fabricated quotations and assertions is such an abuse. See Park, 91 F.4th at 615 (noting that an “attempt to persuade a court or oppose an adversary by relying on fake opinions is an abuse of the adversary system”). Counsel’s misleading the court as to the source of her errors further justifies sanctions under our inherent powers. See Ben E. Keith Co. v. Dining All., Inc., 80 F.4th 695, 703 (5th Cir. 2023) (affirming inherent-power sanctions where attorney discovered misrepresentation and failed to correct it).

We have recognized, in reviewing a district court’s sanctions order, that “an admonition by the court may be an appropriate sanction, in instances where the attorney’s sanctionable conduct was not intentional or malicious, where it constituted a first offense, and where the attorney had already recognized and apologized for his actions.” Jenkins v. Methodist Hosp. of Dallas, Inc., 478 F.3d 255, 265 (5th Cir. 2007) (reviewing Rule 11 sanctions). These factors do not counsel against sanctions here.

IT IS ORDERED that [the Attorney] shall pay $2,500 in sanctions to the United States Court of Appeals for the Fifth Circuit within 30 days of this order.”

Comment: the lawyer was fortunate to avoid a more serious sanction. We must be ever vigilant about AI and spurious citations. Note: I removed the lawyer’s name from this post.

Another AI Hallucinations Case Draws Sanctions for Lead Counsel and Local Counsel

Another AI Hallucinations Case Draws Sanctions for Lead Counsel and Local Counsel

In Lifetime Well LLC v. IBSPOT.Com, Inc., No 25-5135 (E.D. Pa.) (January 26, 2026), the court imposed Rule 11 sanctions on two attorneys for using fake citations in a legal brief. This is a common situation. A large firm is retained to represent the defendant. None of its lawyers are admitted in the jurisdiction. The large firm hires local counsel, a local attorney who, in theory, is admitted to the bar of that local court.

The introduction: “Out-of-state website retailers sued in this federal court for trademark and intellectual property concerns may not have relationships with lawyers admitted to practice before us. The retailer company (who cannot defend itself in court without counsel) may ask their known counsel to find lawyers admitted to the Bar of our Court to act as co-counsel to defend claims against it. The members of the Bar of our Court then swear they will ensure the out-of-town counsel will fully comply with the Rules of Civil Procedure, our Local Rules, and the Judge’s Policies. We may then grant our Bar member’s motion allowing the out-of-town lawyer the privilege of specially appearing in our Court to assist the local counsel barred in this Court.

We today test the role of both sets of lawyers in the misuse of artificial intelligence in briefing. A member of the Bar of our Court moved to dismiss a trademark claim against a website retailer as co-counsel for a specially admitted New York lawyer. Our Bar member admittedly did not read or study the case law. He simply signed his name. The paper he signed along with the New York attorney contained at least eight false case citation hallucinations generated by artificial intelligence. Our talented lawyers in Chambers caught these hallucinations and we directed counsel to show cause as to why we should not impose sanctions. New York co-counsel responded by firing a new lawyer in her office who played some role in preparing the briefing who used artificial intelligence in this case and at least two others. The New York senior lawyer did not explain why she did not catch or perform the basic due diligence in reading the cases in a Memorandum prepared by an attorney under her supervision. She also did not explain why she did not use this mistake as a lesson rather than a reason to fire the new lawyer. She also placed her local co-counsel at risk of sanction without cite checking or reading the cases in the Memorandum. She asked him to sign and file. Both attorneys admit this regrettable lapse in diligence. They both issued updated policies governing their use of artificial intelligence. We find both attorneys violated the obligations owed to the Court and their colleagues forced to track down authorities. They presented false case citations and admittedly did so without checking the artificial intelligence.”

The facts were somewhat ordinary. The out-of-state lawyers hired local counsel to assist them. Local Counsel trusted them and filed a legal brief that they had sent to him. Local counsel did not cite check the brief. Had he done so, he would have noticed that the citations were to nonexistent cases.

This is the court’s discussion of the conduct of Lead Counsel: “Lead Counsel submitted a brief containing citations to fake opinions—authorities which did not stand for the propositions asserted, arose from inapposite jurisdictions, or included inaccurate quotations. She signed the Motion and certified compliance with Rule 11. She did not personally double check the Motion to validate all case citations or to ensure the ultimate accuracy of the filling. Lead Counsel’s defense her firm’s new lawyer used artificial intelligence “unbeknownst” to her firm “rings completely hollow, because [Lead Counsel] had a duty to know by reviewing the document before signing her name to it. Her decision to knowingly sign a brief that she had not meaningfully reviewed was hers and hers alone.”

Opposing counsel then identified a false quotation in the Motion in its Opposition and on the same day Anderson and Associates staff discovered the law clerk who performed the legal research for the Motion had used artificial intelligence without disclosure in two unrelated cases. Lead Counsel and her firm did not review the Motion for additional citation errors. They did not question the law clerk about the research underlying the Motion. Lead Counsel instead filed a reply brief one week later and waited until we identified multiple false citations the next day. Lead Counsel had the opportunity to review the filing, identify erroneous citations, and notify us. The burden should not have fallen on us to expend judicial resources identifying blatantly false cites.

Only after we issued our Order to show cause did Lead Counsel follow up with the new lawyer about the citations in the Motion. The law clerk provided a spreadsheet explaining the cited authorities. Lead Counsel reports “at least two [artificial intelligence] detectors indicated that the case explanations . . . given by the Law Clerk . . . were also 100% [artificial intelligence] generated.” Lead Counsel’s response identifies no point at which she examined the cited authorities, confirmed their existence, or assessed whether they supported the propositions asserted in the Motion. Even after we raised concerns, Lead Counsel’s response describes the use of automated tools to evaluate the law clerk’s work rather than independent review of the case law.”

The court sanctioned Lead Counsel $4000.

The court was perhaps kinder to Local Counsel. The court explains: “We first address Local Counsel’s emphasis on the Motion’s asserted non-frivolous substance and partial success. This framing misses the point. The presence of some meritorious arguments does not excuse the inclusion of others supported by inaccurate, misleading, or fictitious citations. The Supreme Court through Rule 11 asks whether an attorney conducted a reasonable inquiry before signing and filing each legal contention presented to us. Nor does partial success relieve this Chambers of the burden of independently verifying and scrutinizing legal authority certified as accurate by Attorneys Anderson and Goldin. We were required to identify and disregard numerous fabricated citations before reaching the merits of any argument. Rule 11 exists to ensure courts may rely on the accuracy of the legal authority presented to them, not to excuse errors because some arguments ultimately succeed. We cannot excuse false citations because we partially granted the requested relief; we do not allow false submissions when the arguments do not prevail but excuse them if the arguments prevail.

Local Counsel erred in material respects. But the most glaring is based on his near-blind acceptance of papers drafted by an attorney not admitted to the Bar of this Court and his filing of those papers under his own name without checking the cited legal authority. Local counsel is not a rubber stamp. Local Counsel accepted another attorney’s work product without performing basic due diligence and then signed his name to this work product.

At the same time Local Counsel has stepped forward. He accepted responsibility and completed continuing legal education. We find no basis he will continue to engage in local counsel practice at this apparently one-time level of disregard. But Rule 11 sanctions serve not only to address past conduct. They exist to deter repetition of similar conduct by others. Local Counsel’s conduct and today’s sanction upon him serve as an important lesson for lawyers serving as local counsel.

We find a non-monetary sanction is most appropriate as an instructional measure. Local Counsel shall send a cover letter to the President of the Philadelphia Intellectual Property Lawyers Association enclosing today’s Order, this Memorandum, and his artificial intelligence policy and respectfully advise the President of our request these attachments be shared with the Association’s membership during its next Association membership meeting as a lesson on the risks of artificial intelligence and the duties of local counsel as members of the Bar of this Court.”

Note: I removed the names of the lawyers involved from this blog post. The purpose of this blog is to instruct and warn lawyers, not to call people out or embarrass them. I’m sure both lawyers regret this error and have taken steps to make sure it does not happen again.

Edward X. Clinton, Jr.

Another Lawyer Using AI To Draft A Brief Gets Embarrassed

Another Lawyer Using AI To Draft A Brief Gets Embarrassed

Once again, a lawyer has used generative AI to draft a brief, with embarrassing consequences. In Mid-Central Operating Engineers Health and Welfare Fund v. Hoosiervac, LLC SD Indiana 2025, the 2:24-cv-00326, a lawyer got into trouble for using Generative AI to draft a brief. The court that Rule 11 was violated and that there were violations of the Indiana Rules of Professional Conduct.

On October 29, 2024, attorney Ramirez filed a brief in support of Defendant’s Motion to Reconsider the Court’s Denial of Motion to Transfer. [Dkt. 65.] In that brief, Mr. Ramirez cited to In re Cook County Treasurer, 773 F.3d 834 (7th Cir. 2014)—a case the Undersigned was unable to locate. In response to the Undersigned’s Order to file a Notice with the correct citation, [Dkt. 82], Mr. Ramirez filed a Notice in which he stated that he was unable to locate the case, “acknowledge[d] that the referenced citation was in error,” “withdr[ew] the previously cited authority[,] and apologize[d] to the Court and opposing counsel for the confusion.” [Dkt. 86 at 1.]

On December 23, 2024, the Undersigned explained that “filing a brief with a non-existent citation falls far short of an attorney’s duty to the Court, his client, and opposing counsel.” [Dkt. 87.] Accordingly, pursuant to Federal Rule of Civil Procedure 11(c)(3), the Undersigned ordered Mr. Ramirez to appear in-person and show cause why he should not be sanctioned for violating Federal Rule of Civil Procedure 11(b). Id. In that Order, the Undersigned noted that a non-exhaustive review of Mr. Ramirez’s other filings in this case revealed citations in two other briefs that the Undersigned was unable to locate: Knoedler Manufactuers, Inc. v. Cox, 545 F.2d 1033, 1035 (7th Cir. 1976), cited in [Dkt. 39]; and Brown v. Local 58, IBEW, 628 F.2d 441 (6th Cir. 1980), cited in [Dkt. 52].

On January 3, 2025, the parties in this matter appeared by counsel for a hearing on the Order to Show Cause. [Dkt. 88.] Mr. Ramirez admitted that he had relied on programs utilizing generative artificial intelligence (“AI”) to draft the briefs. Mr. Ramirez explained that he had used AI before to assist with legal matters, such as drafting agreements, and did not know that AI was capable of generating fictitious cases and citations. These “hallucination cites,” Mr. Ramirez asserted, included text excerpts which appeared to be credible. As such, Mr. Ramirez did not conduct any further research, nor did he make any attempt to verify the existence of the generated citations. Mr. Ramirez reported that he has since taken continuing legal education courses on the topic of AI use and continues to use AI products which he has been assured will not produce “hallucination cites.” Mr. Ramirez agreed during the hearing that he did not fully comply with Rule 11, but he emphasized that at no point did he act in bad faith or proceed with malice.

The court recommended a sanction of $15,000, one for each of the briefs with fake citations.

The court also found three violations of the Indiana Rules of Professional Conduct.

At least three of the Indiana Rules of Professional Conduct are implicated here, and the Undersigned will address them each in turn.

A. Rule 1.1. Competence

“A lawyer shall provide competent representation to a client. Competent representation requires the legal knowledge, skill, thoroughness and preparation reasonably necessary for the representation.” Ind. R. of Prof. Conduct 1.1. It is clear that Mr. Ramirez failed to provide competent representation when he submitted false legal bases to the Court. These actions flouted the requisite legal knowledge, skill, preparation, and especially thoroughness reasonably necessary for Mr. Ramirez’s representation of his client.

B. Rule 3.1. Meritorious Claims and Contentions

“A lawyer shall not bring or defend a proceeding, or assert or controvert an issue therein, unless there is a basis in law and fact for doing so that is not frivolous, which includes a good faith argument for an extension, modification or reversal of existing law.” Ind. R. of Prof. Conduct 3.1. This Rule mirrors the requirements of Rule 11(b)(2), and likewise proscribes presenting unfounded legal bases. There is no merit in relying on non-existent cases, so Mr. Ramirez’s conduct clearly disregards this Rule.

C. Rule 3.3. Candor Toward the Tribunal

“A lawyer shall not knowingly: . . . make a false statement of fact or law to a tribunal or fail to correct a false statement of material fact or law previously made to the tribunal by the lawyer.” Ind. R. of Prof. Conduct 3.3(a)(1). It is undisputed that Mr. Ramirez made false statements of law to the Court when in three separate submissions he relied on at least three cases which do not exist. Moreover, Mr. Ramirez did so “knowingly”—he knowingly failed to fulfill his duty of verifying that the law he presented was “good law.” As such, the Undersigned believes that discipline for violation of Indiana Rule of Professional Conduct 3.3 is appropriate as well.

Conclusions: (a) Do your own work; (b) don’t use generative AI to draft briefs because it can hallucinate; (c) even if you use AI, make sure to check the end product against real cases.

Use of Generative AI Leads To An Order To Show Cause in Federal Court

Use of Generative AI Leads To An Order To Show Cause in Federal Court

This is the case of Coomer v. Lindell, No. 22-cv-01129, pending in federal court in Colorado. Mike Lindell’s lawyers used Generative AI to respond to a brief and filed it without cite-checking the brief. This District Court entered an order to Show Cause why they should not be sanctioned. Lawyers don’t understand that Generative AI will hallucinate cases if it cannot find the citations you want it to find. This is problem with Generative AI. It is also why AI is useful. This is a path towards creativity in AI. We can’t say it enough, “Don’t Do This!”

www.clintonlaw.net

Rule 11 Does Not Apply To Pre-Removal Pleadings

Rule 11 Does Not Apply To Pre-Removal Pleadings

Cases are often filed in state court and removed to federal court by a petition for removal. Can the defendant seek sanctions under Rule 11 for the pre-removal pleadings? Most Courts say “No.”

Rule 11 provides that “[e]very pleading, written motion, and other paper must be signed by at least one attorney of record[.]” Fed. R. Civ. P. 11(a). And by presenting such a document to the Court, “whether by signing, filing, submitting, or later advocating it,” an attorney certifies that to the best of his or her knowledge it is not presented for an improper purpose, its legal contentions are warranted, and its factual contentions or denials of factual contentions have support. Fed. R. Civ. P. 11(b). If a document violates one of these certifications, then the Court may sanction the attorney, law firm, or party. Fed. R. Civ. P. 11(c).

But “Rule 11 is an extraordinary remedy, one to be exercised with extreme caution.” Mason Classical Acad., Inc v. Arnn, No. 2:22-CV-513-JLB-NPM, 2023 WL 6196855, at *5 (M.D. Fla. Sept. 22, 2023) (citation omitted). This extraordinary remedy is inappropriate at this juncture for two reasons.

First, when a case is removed from state court (like here), “Rule 11 does not apply to pleadings filed before removal.” Worldwide Primates, Inc. v. McGreal, 26 F.3d 1089, 1091 (11th Cir. 1994). JM Family Defendants’ sanctions motion relies exclusively on the amended complaint filed in state court. (See, e.g., Doc. 48 at 13, 16 (reciting paragraphs of the amended complaint)). And, while post-removal advocacy can support Rule 11 sanctions, the Defendants’ motion does not rely on any of Plaintiff’s post-removal filings. This is problematic, as Rule 11 mandates that the sanction motion “describe the specific conduct that allegedly violates Rule 11(b).” Fed. R. Civ. P. 11(c)(2) (emphasis added).

The case is Lynch v. Filice, District. Court MD Florida 2025 2-24-cv-340-SPC-NPM. It is unpublished.

Edward X. Clinton, Jr.

Dershowitz Sanctioned By Arizona District Court

Dershowitz Sanctioned By Arizona District Court

On July 14, 2023, the District Court for Arizona issued an order denying Alan Dershowitz’ Application for an Order to Show Cause. The effect of this order is that Mr. Dershowitz was sanctioned by the district court for signing pleadings in the case captioned Kari Lake, et al. v. Adrian Fontes. No. 22-cv-00677-PHX-JJT. The plaintiff is a former candidate for governor of Arizona. The defendants are Maricopa county election officials.

The procedural history of the lawsuit is complicated. In April 2022, Lake filed suit against Maricopa County election officials to prohibit the use of electronic voting machines. The Court dismissed the case on August 22, 2022. Lake v. Hobbs, 623 F.Supp. 3d 1015 (D. Ariz. 2022). The Defendants moved for sanctions under Rule 11(b)(3). They “argued that Plaintiffs and their counsel made false allegations about Arizona elections in violation of Rule 11(b)(3) and brought this case for the improper purpose of ‘sowing doubts about the reliability and trustworthiness of elections for own financial and political benefit’ in violation of Rule 11(b)(1). Defendants further argued that the lawyers violated Rules 11(b)(2) and (3) and 28 U.S.C. § 1927. After briefing the court granted the motion and held that sanctions were warranted under Rule 11 and Section 1927. Dershowitz then filed an Application for Order to Show Cause to order the Maricopa Defendants to “show cause as to why an award of sanctions should be entered against Mr. Dershowitz personally or his consulting firm.” Dershowitz argued that his role in the matter was very limited and noted that he signed the complaint and first amended complaint as “of counsel.” Dershowitz argued that the words “of counsel” meant that his involvement was too limited for him to be sanctioned.

On May 20, 2022, the Maricopa Defendants sent Dershowitz and the other lawyers for Kari Lake a safe-harbor letter advising them that the Defendants believed the lawsuit was frivolous.

The District Court rejected Dershowitz’s argument that he did not violate Rule 11. To be sanctioned under Rule 11, the lawyer had to have signed the pleading. Here, Dershowitz signed both the original complaint and the amended complaint. By signing a complaint, the lawyer certifies that the filing is “not being presented for an improper purpose” and that the “legal contentions are warranted by existing law or by a non frivolous argument for extending, modifying, or reversing existing law or for establishing new law” and “the factual contentions have evidentiary support or, if specifically so identified, will likely have evidentiary support after a reasonable opportunity for further investigation or discovery.” Once the lawyer signs the pleading, Rule 11 applies even if the lawyer later withdraws from the case.

The District Court rejected the argument that Dershowitz had very limited involvement in the case because Dershowitz did sign the complaint and the amended complaint. The Court also rejected Dershowitz’s argument that he was listed as “of counsel” on the Complaint. “A contrary ruling here could diminish the significance of attorney signatures and cause courts to question whether they can be relied upon with confidence. If would offer safe harbor to attorneys who designate themselves ‘of counsel’ no matter the inadequacy of the filings they sign.” p. 23.

“Failing to impose meaningful sanctions here might very well encourage others to follow suit by lending their credibility to documents filed in court without facing any real consequence if their certifications prove hollow or incomplete. The need for general deterrence is therefore significant.” p. 25.

The Court upheld the Rule 11 sanctions and the 28 U.S.C. §1927 sanctions against Dershowitz. Because of his limited involvement, the court held that Dershowitz would only be held responsible for 10% of the attorney fee award in favor of the Defendants. Dershowitz has the right to appeal the decision and the Ninth Circuit may view matters differently.

Comment: the opinion is thoughtful and well-written. Generally, sanctions cases come down to a number of factors. In this case, the Defendants warned the lawyers that Defendants believed the lawsuit was frivolous and the lawyers did not heed those warnings. Additionally, I agree with the Court’s holding that listing a lawyer as “of counsel” should not give that lawyer a defense to sanctions litigation. The opinion also recognizes the limited role that Dershowitz played in the litigation and it reduces his portion of the attorney fee award. Increasingly, courts and attorney disciplinary bodies have been highly unsympathetic to lawyers who made false allegations about voting machines and the conduct of recent elections. Courts may regard these lawsuits as a threat to the fabric of democracy. Numerous lawyers for former President Trump have been sanctioned by courts and subjected to attorney disciplinary investigations.

Before you sign a complaint, consider whether you have a factual basis to claim that the allegations in the complaint are true. If you do not have any such basis, do not sign. Ask yourself “Is there evidence that voting machines miscount votes or favor candidates of one party over another party?” Is the evidence credible or is it merely conjecture?

Filing Complaint Without Authorization of Client Leads to Rule 11 Sanctions

Filing Complaint Without Authorization of Client Leads to Rule 11 Sanctions

In Edwards v. Wells Fargo Bank, 19-cv-14409 D. New Jersey January 5, 2003, the Court awarded Rule 11 sanctions against plaintiff’s counsel for failing to obtain the authorization of his client before filing the case. At a hearing the lawyer conceded that he lacked authorization to file the case. It is difficult for me to comprehend the court’s rulings. The pertinent parts of the ruling are quoted below:

WHEREAS, the Court held a hearing on the Order to Show Cause on July 7, 2021, with both Thomas and Edwards in attendance, (ECF No. 29), and where Thomas conceded on the Record that Edwards had not hired him to bring this case and that in fact Thomas had never met Edwards prior to the Order to Show Cause hearing on July 7, 2021, (ECF No. 38 at 23:22-23); and

WHEREAS, the Court noticed Thomas at both the hearing and in the Order issued on July 8, 2021 that the Court was contemplating sanctions under Rule 11 of the Federal Rules of Civil Procedure and the Rules of Professional Conduct and gave Thomas a second chance to Show Cause to the Court; and

WHEREAS, Thomas received two extensions and nearly two months of time to prepare his second response to the July 8, 2021 Order to Show Cause (ECF Nos. 30, 31, 32, 33, 34, 36, 37); and

WHEREAS, the Court found Thomas’ explanations as to why this case was brought under Edwards’ name were insufficient, (ECF No. 39); and

WHEREAS, the Court found that Thomas was not authorized by Edwards to bring this action, (ECF No. 39 at 34-35); and…

WHEREAS, the Court found that Thomas filed and pursued this lawsuit for improper purposes, violating Federal Rule of Civil Procedure 11(b)(1), (among other violations) (ECF No. 39 at 20-21)[2] (“the Court is unable to conceive of any proper basis Thomas could have had for filing this Complaint”) (emphasis in original); and

WHEREAS, with the Court finding a violation of Rule 11(b)(1), the case was brought improperly ab initio, without Edwards’ knowledge or consent;

No Rule 11 Sanctions Where Lawyers Had Reasonable Basis To Make Alter Ego Claim

No Rule 11 Sanctions Where Lawyers Had Reasonable Basis To Make Alter Ego Claim

In Jingdong Logistics United States Company v. Ready Acquisition, Inc, Case No. 5:22-cv-01018-ODW (SHKx), Central District of California, plaintiff alleged that Ready Acquisition was the alter ego of its two owners. The owners alleged that the allegations were baseless and sought Rule 11 sanctions. The court denied sanctions by reasoning that there was an adequate factual and legal basis for the alter ego claim.

Here, the Court finds that the alter ego allegations in Jingdong’s Complaint were neither factually nor legally baseless “at the time that the position [was] adopted,” that is, at the time Jingdong filed its Complaint. Golden Eagle Distrib. Corp. v. Burroughs Corp., 801 F.2d 1531, 1538 (9th Cir. 1986). In reaching this conclusion, the Court “avoid[s] using the wisdom of hindsight,” limiting its inquiry to whether a reasonable basis for alter ego allegations existed at the time the Complaint was filed, regardless of what Jingdong learned or discovered after it filed the Complaint. Id. at 1537 (quoting Fed. R. Civ. P. 11 advisory committee’s note to 1983 amendment).

Prior to filing the Complaint, Jingdong’s attorneys investigated Ready Acquisition by sending a field agent to Ready Acquisition’s registered principal office address and to Lawrance’s personal address. (See Decl. Sijiu Ren ISO Opp’n (“Ren Decl.”) ¶¶ 3-5, ECF No. 22-1.) In so doing, Jingdong discovered that (1) Ready Acquisition’s office was occupied by new tenants, and that (2) packages addressed to Ready Acquisition were located on the front porch of Lawrance’s residence. (Id.; Decl. Greg Lawrance ISO Reply (“Lawrance Decl.”) ¶¶ 6-7, ECF No. 28.) Jingdong’s attorneys conducted additional research and determined that Ready Acquisition’s business status in the State of New Hampshire was “Not In Good Standing.” (Ren Decl. Ex. A (“Business Information Inquiry”), ECF No. 22-2; Ren Decl. ¶ 6.) These discoveries provided Jingdong’s counsel with a reasonable factual basis for including alter ego allegations against Lawrance and Gunter in Jingdong’s Complaint.

Lawrance and Gunter argue otherwise, pointing to facts and developments that occurred after Jingdong filed its Complaint, (Mot. 6-8), but these facts are not relevant to whether the Court should sanction Jingdong for allegations made in the Complaint. Fed. R. Civ. P. 11(b); Golden Eagle, 801 F.2d at 1538.

Lawrance and Gunter further argue that Jingdong is withholding $400,000 of Ready Acquisition’s inventory and thus contributing to the very insolvency Jingdong alleges supports alter ego liability. (Reply 5.) This argument is not well taken because there is no actual evidence of a causal link between Jingdong’s withholding of inventory and Ready Acquisition’s purported insolvency; and in any case, this attack on one component of Jingdong’s alter ego theory, even if successful, would not render the alter ego theory factually or legally baseless.

The court also held that the legal theory did not merit sanctions either.

Comment: Plaintiff did an extensive investigation of the facts before it brought the alter ego claim. That investigation and the facts that were discovered was a sufficient basis to bring an alter ego claim.

http://www.clintonlaw.net

That Will Cost You $50,000.

That Will Cost You $50,000.

Trump v. Clinton is a purported RICO lawsuit filed by Trump attorneys against Hillary Clinton (who lost the 2016 Presidential Election) and a number of other defendants. It was dismissed with prejudice two months ago. One of the defendants, Charles Dolan, filed a motion for Rule 11 sanctions. The district court granted the motion with some stern words for Trump’s lawyers. Dolan was a mere volunteer for the Clinton campaign and did not have the roles that the complaint, and the amended complaint, alleged that he had.

The Court found that the allegations that Mr. Dolan was involved in a conspiracy to harm Donald Trump or his campaign were false and reckless. The court noted that the lawyers for Dolan sent a detailed warning letter to the attorneys for Trump explaining the various flaws with the Complaint. Instead of taking the letter seriously, the lawyers made a few cosmetic changes and filed an Amended Complaint. The court’s discussion of the Rule 11 warning letter is instructive:

The Warning Letter. 

On May 31, 2022, counsel for Mr. Dolan wrote the attorneys for Mr. Trump. They warned:

1.         That Mr. Dolan had no role in any conspiracy related to the Steele dossier.

2.         That Mr. Dolan was not a source for the allegations of sexual activity.

3.         That Mr. Dolan had not been in contact with any defendant other than Igor Danchenko, and that Mr. Dolan’s contacts with Mr. Danchenko involved business interests and help for a conference in Moscow.

4.         That Mr. Dolan had never been chairman of the DNC.

5.         That Ms. Clinton was on record through a spokesperson as stating she had no recollection of Mr. Dolan.

(DE 268-1).

The court then noted that the Amended Complaint did not make material changes to the allegations against Dolan. Dolan moved for sanctions. The explanation for the decision to grant sanctions is well-written.

Rule 11 sanctions are properly assessed (1) when a party files a pleading that has no reasonable factual basis; (2) when the party files a pleading that is based on a legal theory that has no reasonable chance of success and that cannot be advanced as a reasonable argument to change existing law; or (3) when the party files a pleading in bad faith for an improper purpose. Massengale v. Ray, 267 F.3d 1298, 1301 (11th Cir. 2001) (citing Worldwide Primates, Inc. v. McGreal, 87 F.3d 1252, 1254 (11th Cir. 1996)).

Here, all three are true. In Section A of this Order, I explain why the Amended Complaint lacked a reasonable factual basis as to the allegations against Defendant Dolan. Then, in Section B, I explain why Plaintiff’s legal arguments contained no reasonable chance of success. I have already done so, at great length and in great detail, in my Order granting Defendants’ Motion to Dismiss. But I reiterate those fatal flaws here as relevant to the distinct Rule 11 inquiry. Finally, in Section C, I find that Plaintiff filed his pleadings for an improper purpose.

The order contains a lengthy discussion of the merits of the legal theories in the Complaint as additional bases for sanctions. The court ordered the lawyers for Trump to deposit $50,000 with the Court and pay Mr. Dolan’s legal fees in connection with the motion.

Comment: this is an example where the lawyer failed to conduct due diligence before making claims that were either false or baseless. Even after receiving a Rule 11 warning letter, the lawyers (at least according to the Court) failed to take any measures to correct the problems with the Complaint. Rule 11 requires due diligence and no lawyer should ever sign a pleading without doing that hard work. Don’t sign because the boss tells you to sign. Don’t sign to curry favor. Sign if the allegations are true and well-researched. In the end of the opinion, the Court indicated that other sanctions might be forthcoming.

Note: my apologies for the formatting issues that made the original post impossible to read.

Ed Clinton, Jr.

Trump v. Clinton – A Fertile Ground For Sanctions Motions

The Southern District of Florida recently dismissed Trump v. Clinton 2:22-cv-14102 (Middlebrooks, J.) which alleged a smorgasbord of grievances against various defendants who plaintiff claimed had attempted to rid the 2016 Presidential Election against him. Defendant Charles Halliday, Jr. filed the first of an expected dozen or so Rule 11 motions against the lawyers for the former President. The motion alleges sloppy work by Trump’s lawyers.

“Defendant Charles Halliday Dolan, Jr has been dragged into this lawsuit via speculation, rumor and innuendo.Large and small matters are falsely and cavalierly presented in Plaintiff’s pleadings; any one of these false statements is grounds for sanction.

The original complaint falsely presented Mr. Dolan as a former Chairman of the DNC. Complaint, ¶96.Undersigned counsel sent a Rule 11 letter to Plaintiff’s counsel noting, among other things, that statement was false.See Exhibit A. The Amended Complaint now describes

Mr. Dolan as the former Chairman of a “national democratic political organization.” Amended Complaint, ¶96. Thatdoes not fix the problem, as Mr. Dolan was never the Chairman of any such organization. Mr. Dolan’s resume is available online and could have been easily checked.

The new, Amended Complaint further complicates its prior error by now identifying Mr. Dolan for the first timeas a citizen and resident of New York, Amended Complaint, ¶20. This is a new allegation that is not true at all, andagain could have been easily checked. Mr. Dolan lives and has lived for most of his adult life in Virginia. Mr. Dolan already submitted a declaration identifying himself as an Arlington, Virginia resident.Mr. Dolan is alleged to be the ultimate source of a rumor that Mr. Trump engaged in salacious sexual activity at a Moscow hotel.This is also not true, and there is no basis for this rumor….

There was no factual basis to allege that Mr. Dolan was ever Chairman of the DNC, or former Chairman of any national democratic political organization, and no basis to allege he has ever been a resident of New York. There apparently was not a scintilla of due diligence on the part of the plaintiff’s attorneys. These false statements alone merit sanction, especially since undersigned counsel warned Plaintiff’s counsel of a potential Rule 11 motion via letter. These false facts are indicative of a lack of reasonable diligence generally.”

Comment: I take no position on whether the motion has merit, but will keep readers updated on the results of this (and other expected sanctions motions) in this case.

Ed Clinton, Jr.