Tag: Sanctions

Bankruptcy Judge Finds AI citations Violate Rule 9011

Bankruptcy Judge Finds AI citations Violate Rule 9011

Bankruptcy rule 11 is known as Rule 9011. In re Martin, 670 B.R. 636 (2025), issued by the Northern District of Illinois sanctions two lawyers for using artificial intelligence to prepare portions of their briefs. One lawyer claimed he was unaware of the prohibition on using artificial intelligence and that he did not know that it might make up fake citations to cases. The court’s response to this is thoughtful:

[Lawyer 1] and [Lawyer 2] ask me not to sanction them at all given that they have already voluntarily: (1) admitted their misconduct and promised not to do it again; (2) withdrawn any application for compensation in this case; and (3) watched an online CLE video. But while I appreciate their candor and efforts, “[t]here must be consequences.” Ferris v. Amazon.com Servs., LLC, No. 24-cv-304, 778 F.Supp.3d 879, 882 (N.D. Miss. Apr. 16, 2025). While I believe this mistake was unintentional, a “citation to fake, AI-generated sources … shatters [] credibility” and “imposes many harms.” Kohls v. Ellison, No. 24-cv-3754, 2025 WL 66514, at *4-5 (D. Minn. Jan. 10, 2025). So the consequences “are steep.” Id. at *5.

The first reason I issue sanctions stems from [Lawyer 1’s] claim of ignorance—he asserts he didn’t know the use of AI in general and ChatGPT in particular could result in citations to fake cases. (Dkt. No. 71 at 3) [Lawyer 1] disputes the court’s statement in Wadsworth that it is “well-known in the legal community that AI resources generate fake cases.” Wadsworth v. Walmart Inc., 348 F.R.D. 489, 497 (D.Wyo. 2025). Indeed, [Lawyer 1] aggressively chides that assertion, positing that 647*647 “in making that statement, the Wadsworth court cited no study, law school journal article, survey of attorneys, or any source to support this blanket conclusion.” (Dkt. No. 71 at 3-4, emphasis in [Lawyer 1’s] brief as filed)

I find [Lawyer 1’s] position troubling. At this point, to be blunt, any lawyer unaware that using generative AI platforms to do legal research is playing with fire is living in a cloud. This has been a hot topic in the legal profession since at least 2023, exemplified by the fact that Chief Justice John G. Roberts, Jr. devoted his 2023 annual Year-End Report on the Federal Judiciary (in which he “speak[s] to a major issue relevant to the whole federal court system,” Report at 2) to the risks of using AI in the legal profession, including hallucinated case citations.[6] To put it mildly, “[t]he use of non-existent case citations and fake legal authority generated by artificial intelligence programs has been the topic of many published legal opinions and scholarly articles as of late.”[7] At this point there are many published cases on the issue—while only a sampling are cited in this opinion, all but one were issued before June 2, 2025, when [Lawyer 1] filed the offending reply. See, e.g., Jaclyn Diaz, A Recent High-Profile Case of AI Hallucination Serves as a Stark Warning,NPR ILLINOIS (July 10, 2025, 12:49 PM), https://www.nprillinois.org/XXXX-XX-XX/a-recent-high-profile-case-of-ai-hallucination-serves-as-a-stark-warning (“There have been a host of high-profile cases where the use of generative AI has gone wrong for lawyers and others filing legal cases…. It has become a familiar trend in courtrooms across the U.S.”). The Sedona Conference wrote on the topic in 2023.[8] Newspapers, magazines, and other well-known online sources have been publicizing the problem for at least two years.[9] And on January 1, 648*648 2025, the Illinois Supreme Court issued a “Supreme Court Policy on Artificial Intelligence” requiring practitioners in this state to “thoroughly review” any content generated by AI.[10]

Counsel’s professed ignorance of the dangers of using ChatGPT for legal research without checking the results is in some sense irrelevant. Lawyers have ethical obligations not only to review whatever cases they cite (regardless of where they pulled them from), but to understand developments in technology germane to their practice.[11] And there are plenty of opportunities to learn—indeed, the Illinois State Bar Association chose “Generative Artificial Intelligence — Fact or Fiction” as the theme of its biennial two-day Allerton Conference earlier this year, calling the topic “one that every legal professional should have on their radar.”[12] Similar CLE opportunities have been offered across the nation for at least the past two years.

The bottom line is this: at this point, no lawyer should be using ChatGPT or any other generative AI product to perform research without verifying the results. Period. See, e.g., Lacey v. State Farm Gen. Ins. Co., No. CV 24-5205, 2025 WL 1363069, at *3 (C.D. Cal. May 5, 2025) (“Even with recent advances, no reasonably competent attorney should out-source research and writing to this technology— particularly without any attempt to verify the accuracy of that material.”); Mid Cent. Operating Eng’rs, 2025 WL 574234, at *2 (“It is one thing to use AI to assist with initial research, and even non-legal AI programs may provide a helpful 30,000-foot view. It is an entirely different thing, however, to rely on the output of a generative AI program without verifying the current treatment or validity—or, indeed, the very existence—of the case presented.”). In fact, given the nature of generative AI tools, I seriously doubt their utility to assist in performing accurate research (for 649*649 now). “Generative” AI, unlike the older “predictive” AI, is “a machine-learning model that is trained to create new data, rather than making a prediction about a specific dataset. A generative AI system is one that learns to generate more objects that look like the data it was trained on.” Adam Zewe, Explained: Generative AI, MIT NEWS (Nov. 9, 2023), https://news.mit.edu/2023/explained-generative-ai-1109 (emphasis added). Platforms like ChatGPT are powered by “large language models” that teach the platform to create realistic-looking output. They can write a story that reads like it was written by Stephen King (but wasn’t) or pen a song that sounds like it was written by Taylor Swift (but wasn’t). But they can’t do your legal research for you. ChatGPT does not access legal databases like Westlaw or Lexis, draft and input a query, review and analyze each of the results, determine which results are on point, and then compose an accurate, Bluebook-conforming citation to the right cases—all of which it would have to do to be a useful research assistant. Instead, these AI platforms look at legal briefs in their training model and then create output that looks like a legal brief by “placing one most-likely word after another” consistent with the prompt it received. Brian Barrett, “You Can’t Lick a Badger Twice”: Google Failures Highlight a Fundamental AI Flaw, WIRED (Apr. 23, 2025, 7:44 PM), https://www.wired.com/story/google-ai-overviews-meaning/.

If anything, [Lawyer 1’s] alleged lack of knowledge of ChatGPT’s shortcomings leads me to do what courts have been doing with increasing frequency: announce loudly and clearly (so that everyone hears and understands) that lawyers blindly relying on generative AI and citing fake cases are violating Bankruptcy Rule 9011 and will be sanctioned. [Lawyer 1] “professed ignorance of the propensity of the AI tools he was using to `hallucinate’ citations is evidence that [the] lesser sanctions [imposed in prior cases] have been insufficient to deter the conduct.” Mid Cent. Operating Eng’rs, 2025 WL 574234, at *3.

The second reason I issue sanctions is that, as described above, I also have concerns about the way this particular case was handled. I understand that Debtor’s counsel has a massive docket of cases. But every debtor deserves care and attention. Chapter 13 cases can be challenging to file and manage—especially when they involve complexities like those in this case. If a law firm does not have the resources to devote the time and energy necessary to shepherd hundreds of Chapter 13 cases at the same time, it should refer matters it cannot handle to other attorneys who can—lest a search for time-saving devices lead to these kinds of missteps. What I mean to convey here is that while everyone makes mistakes, I expect— as I think all judges do—attorneys to be more diligent and careful than has been shown here.[13]

Comment: This is an excellent opinion and it should be carefully read and considered by all lawyers.

Ed Clinton, Jr.

Repeated Failures To Appear In Court Provoke Sanctions

Repeated Failures To Appear In Court Provoke Sanctions

Webber v. Leson Chevrolet, Inc., E.D. Louisiana No. 22-910 is an example of repeated violations that provoked sanctions by the federal court. Sanctions were awarded based on Rule 16 and 28 U.S.C. §1927. The 1927 sanctions were based on repeated efforts to relitigate already resolved issues.

Against this backdrop, the Court turns again to Gorham’s record in this case. The first court-ordered conference Gorham missed in this case was August 16, 2023 — almost two years after being sanctioned $2,000 by Judge Lemelle in an effort to deter such future violations. As was the case with Judge Lemelle’s initial $200 sanction, his subsequent $2,000 sanction clearly did not have had the desired or intended effect, as counsel has now missed three more court-ordered conferences or hearings in this case (to go along with the four from Dunn).

Compounding these failures, Gorham continues to ignore the Court’s orders and directions concerning her ill-advised motion for sanctions and insists on continuing to aggressively litigate that motion and the issues raised therein, despite the Court very pointedly denying that motion and explaining at the June 20, 2024 hearing that her motion to reconsider would also be denied. (Rec. doc. 113).

Notably, the Court-ordered briefing in which Gorham was directed to address her non-appearances in this case was long on grievance and complaints about opposing counsel’s conduct and the Court’s treatment of her and very short on acceptance of responsibility, remorse, or anything approaching a mea culpa for routinely failing to appear.[5] She persists in re-litigating a losing cause (which consists entirely of attacks on opposing counsel’s professionalism), which requires opposing counsel to respond and, of course, requires the Court to continue to grapple with a denied motion.

Based upon all this, the Court finds that Gorham’s third non-appearance in this case is a violation of Federal Rule of Civil Procedure 16 and that a sanction is appropriate for that violation. Unlike Rule 11, Rule 16 proscribes certain acts regardless of purpose or motivation. Failure to attend a scheduled hearing falls within this category — no doubt serial failures qualify. Improper motive, bad-faith, even reckless behavior, is not a prerequisite for finding a violation of the Rule. So long as the court is convinced counsel or her office received proper and timely notice, a negligent failure to attend the scheduled conference amounts to a violation of the Rule.

In addition to this violation, the Court also finds that Gorham’s insistence on re-litigating the matters raised in her motion for sanction is a violation of 28 U.S.C. § 192 7, which provides, Any attorney or other person admitted to conduct cases in any court of the United States or any Territory thereof who so multiplies the proceedings in any case unreasonably and vexatiously may be required by the court to satisfy personally the excess costs, expenses, and attorneys’ fees reasonably incurred because of such conduct. 28 U.S.C. § 1927. Gorham’s Motion for Sanctions was denied due to her own non-appearance at the hearing on that motion as well as on the merits. (Rec. doc. 100). At the oral argument on her “Motion for Objections to the Magistrate’s Order and Rule to Show Cause,” the Court made it abundantly clear that the time for trying to support those arguments had passed and warned counsel against continuing to lash out at opposing counsel. (Rec. doc. 113, passim). The Court even short-circuited Defense Counsel’s argument with this closing observation:

MR. BEEBE: Thank you, Your Honor. I’m attempting to avoid that we have any more vitriol.

THE COURT: I’ve just spent 15-20 minutes doing the same thing.

MR. BEEBE: Very good.

THE COURT: I feel like Ms. Gorham is hearing what I’m saying.

(Id. at 19) (emphasis added). The Court was wrong about that last bit, given that Gorham followed up immediately with yet another pleading doubling down on her attacks on counsel’s professionalism and taking the additional step of including declarations made under penalty of perjury repeating those same attacks.

This is all wasteful in the extreme. The Court finds that Gorham’s conduct along this continuum rises to the level of conduct that has unreasonably and vexatiously multiplied the proceedings, in violation of Section 1927.

Seventh Circuit Affirms Censure For Frivolous Claim Against State Prosecutor

The Seventh Circuit has affirmed the district court’s decision to censure a lawyer who brought a claim that was barred by existing law.

Plaintiff alleged that a state prosecutor violated his civil rights by deciding to charge him with obstructing a police investigation. The prosecutor moved to dismiss on the ground that his decision to charge a defendant was entitled to absolute immunity.Imbler v. Pachtman, 424 U.S. 409, 427 (1976) The lawyer sought leave to amend the complaint. The district court, on its own motion, ordered the lawyer to show cause why he should not be sanctioned:

The district court denied leave to amend, reasoning that the proposed claims against the second prosecutor would be frivolous because the prosecutor would have absolute immunity in her individual capacity, and the Eleventh Amendment would bar any claims against her in her official capacity. The court also ordered Foreman to show cause why the claims against prosecutor Leisten should not be dismissed for the same reasons. Additionally, because in a previous case Foreman’s lawyer, Lawrence Redmond, had raised similar claims against prosecutors that were dismissed because of absolute immunity, the court ordered Redmond to show cause why he should not be sanctioned under Federal Rule of Civil Procedure 11(c).

…

The district court granted Leisten’s motion for judgment on the pleadings, noting that Foreman had not offered a basis for challenging the existing law of prosecutorial immunity. In addition, the court reasoned that a claim against Leisten in his official capacity would not fall under the exception to the Eleventh Amendment for injunctive relief because Foreman’s complaint did not sufficiently allege an ongoing constitutional violation, as opposed to a claim for damages to remedy a past injury.

After the claims against prosecutor Leisten were dismissed, a magistrate judge issued a report recommending that attorney Redmond be publicly censured under Rule 11(c) for advancing frivolous claims without offering any argument or authority that would support a change in existing law. The magistrate judge concluded that a censure would be an appropriate punishment and deterrent, especially in light of Redmond’s previous censure by the Supreme Court of Illinois in a post-conviction capital appeal.

The Seventh Circuit affirmed the decision to censure the attorney because he failed to raise a non-frivolous argument to change the law.

Comment: the lawyer was sanctioned because he filed a claim against a prosecutor that was barred by existing precedent and he offered no reason to show why his case was different or existing law should be changed. If you wish to change existing law, you need to be upfront with the court and explain why the existing law is unjust or incorrect or does not apply to your case.

Source: Foreman v. Wadsworth, Court of Appeals, 7th Circuit 2016 – Google Scholar