Labor & Employment Law Daily Wrap Up, REMEDIES, DAMAGES—N.D. Miss.: Attorneys for both parties sanctioned for AI generated hallucinations, (Jun 10, 2026)

By Kathleen Kapusta, J.D.

“This Court is yet again ‘burden[ed] [with] addressing AI hallucination in court filings.”

Noting that it was presented with the unusual scenario of attorneys for both parties in the underlying action having engaged in similar sanctionable misconduct, the submission of filings containing hallucinatory AI citations, a federal district court in Mississippi found monetary and nonmonetary sanctions were warranted against the four attorneys. Explaining that the sanctions were necessary to deter similar conduct by members of the larger bar and that no lesser sanction would serve that purpose, vindicate the court’s interest, or rectify the misconduct, the court revoked two attorneys’ pro hac vice admissions in this case, barred them from appearing before it for two years, and fined them both. The court also disqualified the two local attorneys involved from further participation in the case and fined them each $1,000 (Withers v. City of Aberdeen, No. 1:24-CV-218-SA-RP (N.D. Miss. June 8, 2026)).

The underlying action here involves a contract dispute over legal fees between an attorney licensed in Louisiana and the City of Aberdeen. At some point, the case was transferred to the Northern District of Mississippi by the federal court in Louisiana. The attorney and the city were both represented by a Mississippi-licensed attorney and an attorney who was admitted pro hac vice.

Hallucinations. After the plaintiff was awarded reasonable attorneys’ fees stemming from his efforts to obtain and defend a default judgment, which was later set aside, the city filed a motion for summary judgment, to which the plaintiff responded, as well as a motion challenging the reasonableness of the plaintiff’s accounting of attorney fees and expenses. Upon reviewing the briefs submitted in support of the parties’ respective positions, the court was unable to locate certain legal authorities cited within them.

Show cause hearing. The court accordingly held a show cause hearing at which all four attorneys expressed embarrassment and apologized. The two out-of-state attorneys took responsibility for drafting the filings at issue with the one who represented the city admitting to using an AI tool to conduct legal research and the other to using generative AI to draft her filings. Neither of them verified the legal authority output by AI before filing their briefs.

Both local attorneys admitted to failing to review the filings submitted to the court, claiming they were unaware of their respective co-counsel’s use of AI. All four attorneys, the court observed, first became aware that hallucinated cases were cited in their respective filings after receiving the court’s show cause order.

Rule 11 and inherent authority. Pursuant to Rule 11 of the Federal Rules of Civil Procedure, said the court, “[a]n attorney has a duty to conduct a ‘reasonable inquiry into the facts and law of a case at the time [at] which [he or] she affixes her signature on any papers to the court’” and a court can impose sanctions against attorneys for failing to comply. Further, the court stated, “district courts have inherent authority to sanction the misuse of AI as such constitutes an abuse of the judicial process.”

Plaintiff’s out-of-state attorney. In addressing the conduct of the four attorneys here, the court turned first to the pro hac vice attorney for the plaintiff, noting she is licensed to practice law in Louisiana and owns her own firm, which has no policy governing the use of AI. She accepted the responsibility for drafting the plaintiff’s filing opposing summary judgment, which contained two citations to nonexistent cases. She explained that she used “First Drafts,” an AI-powered program for drafting legal documents and admitted to failing to verify the AI output.

She claimed that she was unaware AI could produce hallucinated cases and that she did not know what a hallucinated case was. Finding this to be incredulous, and that she knew or should have known of the risks associated with the use of AI in the legal context, the court noted that there have been “enough repeated incidents” throughout the country “of attorneys’ misuse of [AI] technology that the pitfalls associated with using [AI] are well-established.” Accordingly, the court found she acted in bad faith in failing to verify the legal authority in her AI-generated brief.

Further, a subsequent motion to file a corrected memorandum that was signed by the plaintiff’s local counsel stated that a thorough analysis had been conducted of each proposition and citation contained in the plaintiff’s filings since the case had been transferred to Mississippi. Because the pro hac vice attorney confirmed that local counsel had prepared the motion, the court attributed minimal credit to her for the mitigation effort. The court also noted that the motion disclosed several other filings containing misrepresentations of law and hallucinated cases.

The court also noted its concern that the attorney has continued to misuse AI after she was put on notice of her violations here as several months after the show cause hearing, she was sanctioned by another court for submitting filings containing AI hallucinations that were filed two months after the show cause hearing. This continued AI use, said the court, “demonstrates an extreme dereliction of professional responsibility.”

Moreover, said the court, the attorney’s violation as it related to opposing the city’s summary judgment motion occurred at an important stage of the litigation. Not only was the court unable to resolve that dispositive motion given the tainted filings, it effectively inhibited the case from proceeding further.

Plaintiff’s local counsel. As to the plaintiff’s local counsel, she appeared as a signatory on the filing at issue and admitted to not reviewing or verifying the accuracy of the cited legal authorities. While she stated that she was unaware of her co-counsel’s AI use, she did not attempt to excuse herself on that basis, said the court. She also stated that she did not personally use AI and that her firm has a policy pertaining to AI use. She also conducted a thorough analysis of all filings submitted on behalf of the plaintiff after entry of the court’s show cause order.

Moreover, she admitted to violating the court’s local rule requiring that resident attorneys provide guidance and oversight of nonresident attorneys to ensure that they are complying with procedural and ethical rules. While the court did not take violation of this duty lightly, it found she acted negligently and carelessly but not in bad faith.

City’s out-of-state attorney. Regarding the city’s pro hac vice attorney, she admitted to relying on AI research tools without independent verification that resulted in four citations in the city’s filings that could not be verified. According to her, her Texas-based law firm does not use open-ended AI but has acquired software that was built for in-house legal research.

While she acknowledged that the software was built to produce results from jurisdictions in which her law firm typically practiced, which did not include Mississippi, after the court expressed concern that she relied on software that was not designed to include Mississippi cases, “she contradicted herself by stating that the tool was supposed to provide regional results and that Mississippi was certainly within her firm’s region.” Based on this, the court found she acted in bad faith in using the software.

The court also pointed out that her firm’s AI policy required attorneys to independently verify the software’s output. Thus, the court found it particularly egregious that as a partner and presumed leader in the firm, she disregarded the AI policy by blindly relying on the AI research tool. Moreover, she admitted to attending CLEs related to AI and was thus well aware of the dangers and risks associated with unverified AI output. In deliberately disregarding her firm’s safeguard anyway, said the court, she again acted in bad faith.

As to her assertion that she had not misrepresented any proposition of law in her filings, the court pointed out that other “courts have squarely rejected the notion that a Rule 11 violation has not occurred merely because the legal propositions accompanying fake case citations are otherwise true or supported by other cases.”

City’s local counsel. Addressing finally the city’s local counsel who was signatory to two filings containing hallucinatory citations, the court noted that he admitted he had given his co-counsel permission to affix his signature on filings without reading the documents. He also stated that he did not use AI in his practice, did not have an AI policy in place, and did not know his colleague had used an AI research tool to conduct legal research in the case. He also acknowledged that he should have reviewed the filings and expressed remorse for failing to have done so.

As with the plaintiff’s local attorney, the court found he also violated his duties as a sponsoring resident attorney pursuant to the court’s local rules. But because he was not the drafter of the filings at issue and did not use AI in this case, the court found no reason to believe he acted in bad faith as opposed to having acted negligently and carelessly. While the court credited his candor and steps taken toward holding himself accountable, it noted that “In an era of rampant unverified AI usage within the legal field, this case presents a prime example of the risk associated with serving as a rubberstamp when acting as local counsel.”

Sanctions. Based on all of the above, and cognizant of the Fifth Circuit’s directive to impose the least severe sanction necessary to accomplish deterrence, the court revoked both out-of-state attorneys’ pro hac vice admissions in this case and barred them from appearing in any case before the U.S. District Court for the Northern District of Mississippi for two years. It also ordered the plaintiff’s attorney to pay $2,500 to the court’s registry and the city’s attorney to pay $3,500. And because the plaintiff’s attorney had not attended a CLE on the AI usage, the court ordered her to complete a CLE on AI with an ethics component addressing the obligations of counsel regarding the use of AI in the legal field.

As to local counsel, the court disqualified both from further participation in the case and fined them each $1,000. Though it acknowledged that this left the litigants here without representation, it explained that “even if there is some minor hardship, it must yield to the seriousness of the misconduct here.” It allowed the city 60 days to find new counsel.

Lastly, the court found that referral of all attorneys to the applicable disciplinary body for disciplinary proceedings is warranted and justified under the circumstances.

The case is No. 1:24-CV-218-SA-RP.

Judge: Aycock, S.

Attorneys: Shauncey Hunter Ridgeway (Christian & Small) for Tom Withers, III. Helen M. Daniel (Daniel, Williams & Associates PLLC) for City of Aberdeen.

Companies: City of Aberdeen

Cases: RemediesDamages Procedure AINews MississippiNews GCNNews