Judge hits lawyer with $38,877 bill and default loss over fake AI cases

A federal judge in New York ordered a lawyer to pay $38,877.59 after he repeatedly filed court papers citing cases that do not exist. The cases were made up by AI. His client also lost the lawsuit by default. The judge said AI use was not the problem. Never checking its work was.

What happened

The case is a trademark dispute in the Southern District of New York, handled by Judge Failla. The defense lawyer used AI on three separate filings supporting a motion to dismiss. A brief filed in June 2025 was, in the judge's words, "peppered with false citations." His reply to the court's warning also contained a false citation. A later proposed brief had yet another fake case.

How the fakes were found

At a sanctions hearing on Aug. 22, 2025, the lawyer admitted under oath that he relied on AI. The court found that 14 of the 60 cases in his brief were nonexistent. Other cases had misattributed quotes. He said he found cases through an internet search, then ran the brief through three rounds of AI review. He never personally checked the citations.

Why the penalty was so heavy

The judge found the lawyer acted in bad faith. The court said it was enough that he knew, or deliberately avoided learning, that his method would likely produce faulty citations. What mattered most was the pattern. He kept filing fake citations despite repeated warnings, and he had access to legal research tools through a bar library.

The court struck the defendant's filings and entered default judgment. That means the client lost without the case being decided on its merits. The judge also allowed the other side's lawyers to seek fees.

The bill

The attorney who uncovered the fake citations asked for $43,086.59 in fees and costs. On Oct. 9, the court found the $575 hourly rate and the hours generally reasonable. It cut the fees by 10% because the lawyer is a solo practitioner with limited ability to pay. The total is $38,877.59, due within 30 days.

What to take from it

The judge said the court "does not oppose the use of AI to assist in legal research and writing." The failure was not reading the sources. The court pointed to a Second Circuit rule that lawyers must read and confirm the authorities they rely on. The same logic applies to any business using AI for documents others will rely on.

• Treat AI output as a draft, not a finished source.
• Have a person open and read every source an AI tool cites.
• Do not use AI to check AI. Three AI reviews did not catch the fakes.
• Correct errors quickly when someone points them out.