Insurance claimant loses discovery relief after lawyers submit AI-generated false citations
In a May 2025 order in Lacey v. State Farm, a special master struck supplemental briefs and denied the claimant’s requested discovery relief after her lawyers submitted unverified AI-generated legal material. The order required the two law firms to pay $31,100. It explicitly said the client was not at fault and would not pay that award, and declined further penalties against individual lawyers.
- AI system
- Unidentified legal research tool
- Occurred
- Apr 2025
- Reported
- 6 May 2025
- Event location
- Unknown
- What the AI did
- Acted on the person’s behalf
- Reported harm
- Legal Harm
- Whose AI use
- Someone else’s AI use
- Setting
- Justice
- Evidence
- AI involvement supported · Causal attribution supported · 1 source
- 2 claims: 2 documented. 1 open question
- People reported harmed
- At least 1 person
AI system as recorded: Unspecified AI legal-research tools
Reported harm
The special master struck the claimant’s briefs and denied requested discovery relief after her lawyers relied on unverified AI-generated citations.
What remains unknown
- The later effect on the merits of the insurance case and the location of the AI use are unknown.
What the evidence supports
AI involvement: supported. The retained filed court order directly establishes the discovery sanction and allocation of the monetary award.
2 claims: 2 documented. What the statuses mean
Documented The special master struck the claimant’s briefs and denied requested discovery relief after her lawyers relied on unverified AI-generated citations.
Causal attribution. The order expressly connects the discovery sanction to counsel’s AI use and failures of verification.
- lawnext.com(opens in new tab) supports · English
ECF 119, pages 2–4, paragraphs 5–9; page 8 paragraph 20; page 10 conclusion.
Documented The $31,100 award falls on the firms; the order says the client was not at fault and would not be financially responsible.
Causal attribution. Allocation of financial responsibility is directly recorded in the order.
- lawnext.com(opens in new tab) supports · English
ECF 119, page 10 paragraphs 24–25 and conclusion.
Sources
1 source inspected. Sources that repeat one account do not corroborate each other.
- Lacey v. State Farm General Insurance Company, ECF 119, order filed 6 May 2025(opens in new tab)
s1 · lawnext.com · Court order · English · Inspected · Primary
How the sources were read, and where the events happened
Event countries: Unknown. Affected-person countries: Unknown. Court countries: United States.
The order is in the Central District of California. The location of the AI-assisted drafting and the claimant’s residence are not established by the passages used.
Reviewed for publication 2026-09-29: The retained filed court order directly establishes the discovery sanction and allocation of the monetary award.
People reported harmed in this case
At least 1 person
0 AI participants · 1 other person harmed
One claimant directly affected by the denial of discovery relief. Firm costs are not counted as personal losses to every lawyer.
Counted once within this case. The same person may appear in other cases. This count does not establish AI causation.
Cite this case
Compiled per our published methodology: verification statuses, sourcing standards, and corrections process.
APA
NOPE. (2026). Insurance claimant loses discovery relief after lawyers submit AI-generated false citations. AI incidents. https://nope.net/incidents/2025-lacey-insurance-discovery-relief-denied-ai-citations
BibTeX
@misc{2025_lacey_insurance_discovery_relief_denied_ai_citations,
title = {Insurance claimant loses discovery relief after lawyers submit AI-generated false citations},
author = {NOPE},
year = {2026},
howpublished = {AI incidents},
url = {https://nope.net/incidents/2025-lacey-insurance-discovery-relief-denied-ai-citations}
} Related cases
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