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A US judge has revoked a lawyer’s admission to practice and fined three attorneys a total of $5,000 for citing non-existent cases generated by artificial intelligence in a lawsuit against Walmart.
In an order issued on 24 February, US district judge Kelly Rankin sanctioned the lawyers representing the Wadsworth family, who are suing Walmart and Jetson Electric Bikes over an allegedly defective hoverboard that caught fire and burned down their house.
The most severe sanction was imposed on Rudwin Ayala of Morgan & Morgan, who drafted the motions in limine that contained eight fake case citations. Judge Rankin revoked his admission to practice in the case and ordered him to pay a $3,000 fine.
“While technology continues to evolve, one thing remains the same—checking and verifying the source,” Judge Rankin wrote. “As attorneys transition to the world of AI, the duty to check their sources and make a reasonable inquiry into existing law remains unchanged.”
T. Michael Morgan of Morgan & Morgan and Taly Goody of Goody Law Group were each fined $1,000 for failing to review the document before their electronic signatures were applied to it. Morgan is the son of the founder of Morgan & Morgan, one of America’s largest personal injury law firms.
The judge’s order details how Ayala uploaded a draft motion to “MX2.law,” an in-house AI database launched by Morgan & Morgan, asking it to “add to this Motion in Limine Federal Case law from Wyoming setting forth requirements for motions in limine” and similar queries. The AI program then generated fake cases which Ayala incorporated into the filing without verification.
This case joins a growing trend of AI hallucinations causing problems in legal proceedings. According to court documents, judges across the United States have questioned or disciplined lawyers in at least nine lawsuits over the past two years for including AI-generated cases and quotations in court filings, highlighting a new risk in the legal profession’s adoption of artificial intelligence.
“When done right, AI can be incredibly beneficial for attorneys and the public,” Judge Rankin noted in his order. “Legal advocates will likely be able to quickly furnish on-point research and draft motions, which may save costs for the clients.”
The judge found that the attorneys had violated Rule 11 of the Federal Rules of Civil Procedure, which requires lawyers to certify that legal contentions are warranted by existing law. “A fake opinion is not ‘existing law’ and citation to a fake opinion does not provide a non-frivolous ground for extending, modifying, or reversing existing law, or for establishing new law,” Judge Rankin wrote, citing a previous case.
After the court’s order to show cause, the lawyers promptly withdrew the motions, paid opposing counsel’s fees, and Morgan & Morgan implemented additional policies requiring users to “independently verify” any AI-generated information before using or relying on it.
Despite the sanctions, Judge Rankin acknowledged the attorneys’ remedial steps, transparency, and apologetic sentiments, which helped lead to less severe punishment than might otherwise have been imposed.
The underlying case, which alleges that Walmart and Jetson Electric Bikes sold a defective hoverboard that caused a destructive house fire, is scheduled to go to trial next month. Walmart has denied the allegations. The Wadsworth family will continue to be represented by five other attorneys of record.
