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 involvement supported · Causal attribution established · 2 sources, 1 underlying account · Added 16/10/2026