New York Courts

New York Appellate Court Fines Attorney for Use of AI-Generated “Fake” Cases

John C. Lane

It is the first appellate case in the State. The Appellate Division, Third Department, excoriated an attorney for the misuse of generative AI in legal papers. In five filings during an appeal, the attorney included “no less than 23 fabricated cases, as well as many other blatant misrepresentations of fact and law from actual cases.” In all, he was fined $7,500 for conduct ruled inappropriate, in Deutsche Bank National Trust Co. v. LeTennier, decided on January 8, 2026.

It all started as a garden-variety real estate foreclosure action on property in upstate New York. The defendant, Jean LeTennier, originally acting as attorney pro se, was unsuccessful in the trial court, including a number of post-judgment motions. At that point the attorney stepped in to represent the defendant in the appeal. The Court notes that there are distinct legal grounds for setting aside a foreclosure, if the facts and law are followed. But the attorney relied upon generative artificial intelligence to do his legal research, and did not check to see if the case precedents generated by AI actually existed, or actually stood for the proposition assigned to them by AI. Most were non-existent.

“Hallucinated cases” may look like real cases, “but their citations lead to cases with different names, in different courts and on different topics – or even to no case at all.” The attorney using AI as an assistant has an absolute obligation to check, and read, every case he cites, whether generated by AI, or by genuine, old-fashioned legal research. That didn’t happen here, to the Court’s consternation.

According to the Court, defendant submitted at least 23 fabricated legal authorities (“AI hallucinations”) across five filings during the pendency of the appeal. The attorney acknowledged that the papers were actually his own and that by signing a paper, an attorney or party certifies that the papers and their presentation or the contentions are not frivolous. In his own defense, the attorney argued that 90% of his citations were accurate! That alone was “simply unacceptable by any measure of candor to any court.”

The Court noted that attorneys and litigants are not prohibited from using AI to assist with the preparation of court filings. But they must not rely upon the technologies if they are not trained on their dangers and without human oversight. The attorney has an obligation to fact check and cite check every document filed with a court.

Perhaps most offensive to the Court was the attorney’s attitude on oral argument. “Rather than taking remedial measures or expressing remorse, defense counsel essentially doubled down . . . on his reliance of fake legal authorities as not ‘germane’ to the appeal.”

Added to all of that, the Court found that the attorney and his client had pursued a baseless appeal. And for all of that, the attorney was fined $7,500, and his client, $2,500, both as a punishment and a deterrence to others.

Courts throughout the country are facing these problems and sanctioning attorneys. Federal district courts in New York and New Jersey have imposed monetary sanctions under Federal Rule 11 against attorneys who have cited to generative AI-produced fake cases. The New Jersey Federal District Court put it this way last September in OTG N.Y., Inc. v. Ottogi Am., Inc.:

Unfortunately, attorneys’ use of generative AI without proper oversight has become a prevalent issue for courts across the country. Examples abound where district courts have found legal briefs containing AI hallucinated case law masked as actual legal authority. In other words, AI can generate a legal proposition that appears to come from a judicial opinion and is even properly cited under The Bluebook Uniform System of Citation; but there is just one problem – it’s not real. AI made it up. And those who rely on AI blindly, do so at their own peril.

We hope these stern warnings and stiff penalties will help to stem this unacceptable practice in our courts.

What are Plaintiffs Doing to Skirt the Graves Amendment?

John C. Lane

The Graves Amendment, passed in 2005 and codified at 49 U.S.C. § 30106, bars an action for vicarious liability under state law against commercial lessors of motor vehicles involved in motor vehicle accidents, provided that the lessor is free from negligence or criminal wrongdoing. Courts across the country have used the Amendment to protect lessors of tractors, trailers, and intermodal chassis. New York courts have been leaders in protecting rights under the Graves Amendment, especially against New York’s infamous vicarious liability statute, Vehicle and Traffic Law § 388. So, what are the plaintiffs’ lawyers doing to avoid the Graves Amendment?

A double-truck head-on collision, and a downtown New York terrorist attack, illustrate the cleverness of the plaintiffs’ bar. The former is seen in the Illinois federal court case of Favorite v. Sakovsky (August 16, 2019). The terrorist attack is at the center of Grandelli v. City of New York, in Manhattan state court (September 24, 2019). In each horrible case the plaintiffs’ attorneys attempt to increase the pool of financially viable defendants, and to avoid the Graves Amendment.

In Favorite, widow Stephanie Favorite sued the Sakovski estate, BB Wolf, Inc., and Compass Truck Rental and Leasing, the company that leased the Sakovski truck to BB Wolf. She alleged that Compass negligently entrusted the truck to BB Wolf, and should have known that BB Wolf might employ an incompetent driver. Specious as the allegation was, the court denied Compass’s Graves Amendment motion to dismiss because there had been no discovery as yet. A full fact development might support Compass, but the bare complaint did state a cause of action for negligent entrustment.

In Grandelli, Sayfullo Saipov rented a pick-up truck from Home Depot and drove it into a crowd of pedestrians and bicyclists in lower Manhattan, killing eight people. The estate of one victim brought suit against the City and several agencies, and also against Home Depot, alleging that the truck’s lessor negligently entrusted the truck to Saipov, in spite of certain “red flags” from law enforcement publications to be on the lookout for customers who might use a truck to commit terrorist attacks. Home Depot made a Graves Amendment motion to dismiss before conducting any discovery. The court in New York County denied the motion without prejudice, on the incomplete record before it. The court held that the complaint sufficiently stated a case for negligent entrustment, which circumvents the Graves Amendment.

Only one appellate court has considered whether a negligent entrustment claim is barred by the Graves Amendment. In Carton v. GMAC (2010), the Eighth Circuit ruled that vicarious liability claims are barred, but a claim of negligent entrustment, not just negligent maintenance of a leased vehicle, can create an exception to the Graves Amendment. But in this case, the court held plaintiff’s allegations failed to rise to the level of negligent entrustment.

For now, equipment lessors will continue to face negligent entrustment claims, likely unprotected by the Graves Amendment. Lessors should be prepared to present proof of careful practices and procedures to thwart claims of negligent entrustment.