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Medium reported severity

New York federal court enters default judgment against a defendant and orders its lawyer to pay $38,877 after false citations it found AI produced

In a federal trademark suit in the U.S. District Court for the Southern District of New York, the court on 5 February 2026 struck a company defendant's motion papers and entered default judgment against it as a sanction on its lawyer, after his filings repeatedly cited nonexistent cases and misattributed quotations. The lawyer said he had found and cite-checked cases with AI tools (vLex and Paxton AI) and used NotebookLM to review a later submission; the court rejected his explanations and found he acted in bad faith. On 9 October 2026 the court described the citations as produced by generative AI and ordered the lawyer to pay $38,877.59 in fees and costs to the firm of a co-defendant's former lawyer, who had reported the false citations to the court.

AI system
vLex, Paxton AI and NotebookLM (reported)
Occurred
5 Feb 2026 to 9 Oct 2026
Reported
5 February 2026
Event location
United States
What the AI did
Communicated with the person · Informed a human decision about the person
Reported harm
Legal HarmProfessional HarmFinancial Loss
Whose AI use
Their own AI use
Setting
Justice · Work
Evidence
AI involvement supported · Causal attribution established · 2 sources, 1 underlying account
5 claims: 5 documented. 3 open questions
People reported harmed
At least 1 person

AI system as recorded: AI legal research and cite-checking tools the lawyer said he used (vLex with AI functionality, Paxton AI) and NotebookLM, which he said he used to review his response to the court; the court found the citations were produced by generative AI

What Happened

The filings. In June 2025 a defendant's lawyer filed a brief supporting its motion to dismiss a trademark suit. A co-defendant's lawyer told the court that the brief cited at least thirteen cases that did not exist and eight real cases that did not contain the quoted words, and suspected that a large language model had written it. The lawyer's response to the court's order to show cause contained another false citation, and a proposed reply brief contained more.

The lawyer's account. He said he had located unreported cases through Google Scholar, Google search and the AI-assisted platform vLex, and then cite-checked the brief by running it through AI programs (vLex or Paxton AI), which he said introduced errors he mistook for corrections. He said he used NotebookLM to review the content of his response to the court. The court did not find his account of how the errors arose credible, found his account of the NotebookLM use extremely difficult to believe, and found he acted in bad faith.

The sanctions. On 5 February 2026 the court struck the client's motion papers and entered default judgment against the client, holding that a client is bound by its lawyer's acts. On 9 October 2026, describing the sanctioned filings as false citations produced by generative AI, the court awarded the firm of that co-defendant's former lawyer $38,877.59 in fees and costs, payable by the lawyer within 30 days.

Limits. The two orders are the sources read. Which tool generated each false citation is not established: the lawyer's account names several tools and the court rejected parts of it.

Reported harm

According to the court's orders, the defendant's motion papers were struck and default judgment entered against it as a sanction for its lawyer's filings with false citations, which the court describes as produced by generative AI, and the lawyer was ordered to pay $38,877.59 in fees and costs.

Outcome

Ongoing

U.S. District Court for the Southern District of New York, case 24 Civ. 9429 (KPF): Opinion and Order of 5 February 2026 (ECF 227) sanctioned the lawyer under Rule 11 and the court's inherent powers by striking his client's motion papers (docket entries 153 to 156) and entering default judgment against the client, with damages to await the claims against the remaining defendants, and permitted a fee application. Opinion and Order of 9 October 2026 (ECF 364) awarded $38,877.59 in fees and costs, payable by the lawyer within 30 days. The suit continues against other defendants.

What remains unknown

  • Which tool generated each false citation; the lawyer's account names several tools and the court rejected parts of it.
  • Whether the lawyer has paid the award, appealed, or been referred to a disciplinary body; neither order mentions a referral.
  • The amount of damages to be assessed against the defaulted client.

What the evidence supports

AI involvement: supported. The lawyer told the court he found cases through the AI-assisted platform vLex and cite-checked his brief by running it through AI programs (vLex or Paxton AI), which he said introduced the errors, and that he used NotebookLM to review a later submission (communicated_with). The court's 9 October 2026 order describes the sanctioned filings as false citations produced by generative AI. The court read those citations and, because of them, struck the client's papers, entered default judgment against the client and ordered the lawyer to pay fees (informed_decision_about). Which tool generated each false citation is not established.

5 claims: 5 documented. What the statuses mean

Documented In June 2025 the defendant's lawyer filed a brief supporting its motion to dismiss that, a co-defendant's lawyer showed, cited at least thirteen cases that did not exist and eight real cases that did not contain the quoted words; a later response to the court and a proposed reply brief also contained false citations.

Causal attribution. The court's findings in its sanctions opinion.

  • storage.courtlistener.com(opens in new tab) supports · English
    'motion to dismiss that was peppered with false citations'; 'Top alerted the Court to a series of faulty citations'; 'Defendants Top Experience Company LLC (“Top”) and'; 'cited that did not exist, and eight cases that did exist but did not contain the quotes'; 'Once again, his brief contained false citations'
Documented The lawyer said he located unreported cases through Google Scholar, Google search and the AI-assisted platform vLex, cite-checked the brief by running it through AI programs (vLex or Paxton AI) that he said introduced the errors, and used NotebookLM to review the content of his response; the court did not find his account of how the errors arose credible and found his NotebookLM account extremely difficult to believe.

Causal attribution. Documented as the lawyer's statements recorded by the court; his account of how the errors arose is his own and the court rejected it in part.

  • storage.courtlistener.com(opens in new tab) supports · English
    'unreported cases located via Google Scholar, Google search, or the AI-assisted platform vLex, and then cite-checking those cases by running the brief through a different AI program'; 'introduced citation errors that he mistook as corrections and thus neither reviewed nor fixed'; 'I used generative AI to confirm that the information that I wrote was correctly referencing the information that I had'; 'The tool he claimed to use was NotebookLM'; 'The Court does not find the second explanation credible'; 'Court finds that explanation extremely difficult to believe'
Documented The court later described the sanctioned conduct as submitting false citations produced by generative AI and then lying about their origin, and recalled its finding that the lawyer acted in bad faith.

Causal attribution. The court's own characterisation in the 9 October 2026 order.

  • storage.courtlistener.com(opens in new tab) supports · English
    'by submitting false citations to the Court produced by generative artificial intelligence (“AI”) and then lying about their genesis'; 'had acted in bad faith'
Documented On 5 February 2026 the court sanctioned the lawyer by striking his client's motion papers and entering default judgment against the client, holding that a client is not excused from its lawyer's misdeeds.

Causal attribution. The court's order; the court ties the sanction to the false citations.

Documented On 9 October 2026 the court awarded the firm of a co-defendant's former lawyer, who had investigated and reported the false citations, $38,877.59 in fees and costs, payable by the sanctioned lawyer within 30 days.

Causal attribution. The court's order.

  • storage.courtlistener.com(opens in new tab) supports · English
    'then-counsel to Defendant Top Experience Company LLC (“Top”), who had provided substantial assistance to the Court by investigating and reporting'; 'awards his firm $38,877.59'; 'for a total award of $38,877.59'; 'must be made by'; 'within 30 days of this Opinion, unless'; 'Dated: October 9, 2026'

Sources

2 sources inspected, from 1 underlying account. Sources that repeat one account do not corroborate each other.

How the sources were read, and where the events happened

Read in full in English by the research agent (an AI) on 2026-10-16 from CourtListener RECAP storage (HTTP 200, text extracted with pdftotext); no translation was needed. ECF 364, 18 pp. Applies to s1.

Read in full in English by the research agent (an AI) on 2026-10-16 from CourtListener RECAP storage (HTTP 200, text extracted with pdftotext); no translation was needed. ECF 227, 33 pp. Applies to s2.

Event countries: United States. Affected-person countries: Unknown. Court countries: United States.

The filings were made in, and the sanctions imposed by, the U.S. District Court for the Southern District of New York. Where the lawyer and the client are based is not used.

Reviewed for publication 2026-10-16: Published because the court's two orders, read in full, record the lawyer's own account of using AI tools to find and check citations, describe the false citations as produced by generative AI, and impose default judgment on his client and a $38,877.59 fee award on him because of them.

People described

A defence lawyer in a federal trademark suit who, by his own account, used AI tools to find and check citations and was ordered to pay fees; his client, a company, had default judgment entered against it as the sanction.

People reported harmed in this case

At least 1 person

1 AI participant · 0 other people harmed

Additional affected people are described without a reliable count.

One person counted: the lawyer, who described his own use of AI tools and was ordered to pay $38,877.59. The client against which default judgment was entered is a company; the people behind it are not described and are not counted.

Counted once within this case. The same person may appear in other cases. This count does not establish AI causation.

Tags

#united-states#new-york#legal-profession#sanction#hallucinated-citations#default-judgment#attorney-fees

Cite this case

Compiled per our published methodology: verification statuses, sourcing standards, and corrections process.

APA

NOPE. (2026). New York federal court enters default judgment against a defendant and orders its lawyer to pay $38,877 after false citations it found AI produced. AI incidents. https://nope.net/incidents/2026-new-york-federal-court-defaults-client-and-orders-lawyer-to-pay-fees-over-ai-generated-false-citations

BibTeX

@misc{2026_new_york_federal_court_defaults_client_and_orders_lawyer_to_pay_fees_over_ai_generated_false_citations,
  title = {New York federal court enters default judgment against a defendant and orders its lawyer to pay \$38,877 after false citations it found AI produced},
  author = {NOPE},
  year = {2026},
  howpublished = {AI incidents},
  url = {https://nope.net/incidents/2026-new-york-federal-court-defaults-client-and-orders-lawyer-to-pay-fees-over-ai-generated-false-citations}
}

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