$31,000 Sanction in Lacey v. State Farm Tied to Purportedly Undisclosed Use of LLMs and Erroneous Citations

April 15, 2025

Two law firms were sanctioned $31,000 for submitting a legal brief containing reportedly erroneous citations generated using AI tools. The court found that the lawyers failed to disclose the use of AI and neglected to verify its output, resulting in improper and misleading legal filings. This incident highlights the importance of transparent, responsible AI governance in preventing errors and maintaining trustworthy AI practices.

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Matched TAIM controls

Suggested mapping from embedding similarity (not a formal assessment). Browse all TAIM controls

MAP 4.1 — similarity 0.644, rank 1. TAIM detail and related incidents →
MEASURE 2.10 — similarity 0.638, rank 2. TAIM detail and related incidents →
MAP 3.2 — similarity 0.635, rank 3. TAIM detail and related incidents →

Alleged deployer: kandl-gates-llp, ellis-george-llp
Alleged developer: unknown-large-language-model-developers
Alleged harmed parties: michael-wilner, kandl-gates-llp, judicial-process-integrity, ellis-george-llp, defense-counsel-in-lacey-v.-state-farm

Source

Data from the AI Incident Database (AIID). Cite this incident: https://incidentdatabase.ai/cite/1073

Data source

Incident data is from the AI Incident Database (AIID).

When citing the database as a whole, please use:

McGregor, S. (2021) Preventing Repeated Real World AI Failures by Cataloging Incidents: The AI Incident Database. In Proceedings of the Thirty-Third Annual Conference on Innovative Applications of Artificial Intelligence (IAAI-21). Virtual Conference.

Pre-print on arXiv · Database snapshots & citation guide

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