AI Hallucinations Challenge Legal Integrity in Bay Area Courts

Legal Profession Grapples with AI-Generated Errors

The legal landscape in the Bay Area is facing a novel challenge as artificial intelligence, particularly large language models like ChatGPT, introduces a new dimension of error: “hallucinations.” These AI-generated fabrications, which produce inaccurate or nonsensical information, are causing significant professional embarrassment and legal repercussions for attorneys who rely on the technology without adequate verification. What was once a rare occurrence in mid-2023 has become a growing concern, with legal professionals increasingly facing reprimands, fines, and disciplinary actions for submitting court filings that cite nonexistent cases or fabricated legal precedents.

This escalating issue underscores a critical collision between the rapidly advancing world of AI and the stringent requirements of legal procedure. Generative AI, while offering powerful tools for research and document preparation, carries inherent risks due to its reliance on pattern analysis and sophisticated guesswork rather than factual recall. Errors can arise from insufficient training data, flawed assumptions within the AI models, or other technical limitations. The consequences extend beyond the legal realm, as seen in instances where AI has provided dangerously incorrect advice to general users, such as suggesting consuming rocks or adding glue to food. In the legal sector, however, these errors can have life-altering impacts on individuals involved in cases ranging from child custody disputes to disability claims, emphasizing the critical need for accuracy and diligence.

Bay Area courts are increasingly confronting these AI-induced missteps. Judges, accustomed to precise legal arguments and verifiable citations, are now encountering filings that contain information conjured entirely by artificial intelligence. This situation not only disrupts judicial proceedings but also raises serious questions about professional responsibility and ethical conduct within the legal community. The novelty of these AI-generated errors means that many attorneys, even seasoned practitioners, are navigating uncharted territory, often learning harsh lessons about the necessity of rigorous verification protocols. The mounting number of reported incidents suggests that this trend is likely to continue, necessitating a proactive approach from both legal professionals and regulatory bodies to mitigate the risks associated with AI adoption in legal practice.

Cases of AI-Induced Legal Missteps

A prominent example of this emerging challenge involves Palo Alto attorney Jack Russo, a specialist in computer law with nearly five decades of experience. This past summer, Russo admitted to an Oakland federal judge that legal cases cited in a crucial court filing did not exist and appeared to be creations of artificial intelligence hallucinations. Russo described the situation as a “first-time” incident for him and expressed profound embarrassment. He attributed the oversight to a lengthy recovery from COVID-19 and delegating tasks to support staff without adequate supervision, given his age over 70. However, internet law professor Eric Goldman of Santa Clara University dismissed this explanation, asserting that lawyers are obligated to double-check all filings, irrespective of personal circumstances.

U.S. District Judge Jeffrey White, who also found the AI-dreamed fabrications to be a first in his court, noted that Russo had violated a federal court rule by failing to properly verify his motion to dismiss a contract dispute case. Judge White observed that the court’s resources were diverted from other cases to address this issue and issued a preliminary order requiring Russo to cover some of the opposing side’s legal fees. In response, Russo’s firm, Computerlaw Group, stated they had implemented measures to prevent future occurrences, though Russo declined further comment on the matter.

Another notable incident involved San Francisco attorney Ivana Dukanovic, who, along with colleagues at Latham & Watkins, submitted a filing containing hallucinated material in a music copyright case. Representing AI giant Anthropic, Dukanovic admitted to an “embarrassing and unintentional mistake” in U.S. District Court in San Jose. Ironically, Dukanovic, whose professional profile lists artificial intelligence as a practice area, attributed the false information to Claude.ai, Anthropic’s flagship chatbot product. Although Judge Susan van Keulen ordered the removal of the problematic section from the court record, Dukanovic and her firm seemingly avoided direct sanctions, and she did not respond to media inquiries. These cases highlight the pervasive nature of AI hallucinations and the significant scrutiny they draw from the judiciary, regardless of the attorneys’ experience or the sophistication of their clients.

The Broadening Impact and Escalating Consequences

The issue of AI-generated fabrications in legal documents is far from isolated, with its prevalence rapidly expanding across the U.S. Damien Charlotin, a senior fellow at HEC Paris, maintains a comprehensive database tracking legal filings worldwide that contain AI hallucinations. His research indicates that what was once a rare disciplinary issue for lawyers has now become an almost daily occurrence. Charlotin’s database currently lists 113 U.S. cases since mid-2023 where court decisions have addressed lawyers submitting filings with hallucinated content, primarily nonexistent legal-case citations. He further suggests that numerous AI-generated fabrications likely go undetected, potentially influencing case outcomes without judicial oversight.

Professor Goldman underscores the critical stakes involved, particularly in cases with “life-changing consequences” such as those concerning child custody or disability claims. He warns that any distortion of a judge’s decision-making process due to AI-generated falsehoods can fundamentally undermine the integrity of the legal system. The potential for such disruptions has spurred judges to take increasingly firm action. Sanctions range from financial penalties, with fines reaching up to $31,000 in some U.S. cases and a California record of $10,000 recently, to more severe measures. Judges are flagging attorneys to their respective licensing organizations for disciplinary review, dismissing cases entirely, rejecting critical filings, or viewing all future submissions from the implicated lawyer with intense skepticism. Clients may also pursue malpractice lawsuits, and orders to pay opposing counsel’s legal fees can result in six-figure payments.

Despite these significant risks, the legal profession’s adoption of AI tools continues to accelerate. An April survey by the American Bar Association revealed that AI use by law firms nearly tripled in the past year, from 11% in 2023 to 30% of responding offices, with ChatGPT being the most popular choice across all firm sizes. This trend indicates that while the dangers of unverified AI output are becoming increasingly apparent, the perceived benefits of the technology—such as enhanced information retrieval and document preparation—are driving its widespread integration into legal practices. The challenge lies in balancing the efficiency gains offered by AI with the unwavering demand for accuracy and ethical responsibility that defines the legal profession.

Mitigating Risks and Ensuring Accountability

The accelerating rate of AI adoption in the legal sector necessitates robust strategies for mitigating the risks posed by “hallucinations” and ensuring accountability. While AI tools can be invaluable for legal research, identifying relevant information, and drafting documents, their output must be treated with a high degree of skepticism and subjected to thorough human verification. Professor Goldman acknowledges the utility of AI when used judiciously, noting that it can enhance legal professionals’ performance. However, he stresses that this utility is contingent upon wise and careful application, making the responsibility for accuracy ultimately rest with the attorney.

Charlotin’s database is expected to continue growing, suggesting that the problem of AI fabrications in legal documents is unlikely to diminish soon. He observes “a surprising number” of lawyers who exhibit sloppiness, recklessness, or plain incompetence in their use of AI. This highlights a need for better training and clear guidelines for legal professionals on how to effectively and responsibly integrate AI into their workflows. The judiciary is also actively responding to these challenges, with court decisions frequently involving warnings, referrals to disciplinary bodies, the purging of hallucinated content from court records, or mandates for fee payments. One federal appeals court in California even dismissed an appeal that was found to be “replete with misrepresentations and fabricated case law,” including citations to two nonexistent cases.

To navigate this evolving landscape, law firms and individual attorneys must establish stringent internal protocols for verifying all AI-generated content before it enters any official legal filing. This includes cross-referencing AI-provided case citations with established legal databases, meticulously checking facts, and applying critical human judgment to all information. The emphasis must shift from simply delegating tasks to AI to actively overseeing and validating its contributions. By prioritizing diligent human review and maintaining a strong ethical commitment to accuracy, the legal profession can harness the transformative potential of AI while safeguarding the integrity of the justice system and protecting clients from adverse outcomes.