The Trained A-Eye
A New Jersey attorney “glibly” relied on AI and cited four non-existent cases. When confronted about the hallucinations, his response “stunned” the court.
Case
AmTrust North America v. Liberty Mutual Ins. Co., No. A-2587-24 (N.J. Super. Ct. App. Div. 03/27/206, unpublished)
What Happened
While working, a New Jersey worker was injured by a third-party tortfeasor when he was a passenger in a vehicle struck by the tortfeasor. The employer’s workers’ compensation carrier paid benefits to the worker totaling $75,339.52. Through subrogation, the carrier sought reimbursement from the third-party tortfeasor and received $15,000, the third party’s policy limit.
The carrier issued an underinsured and uninsured motorist policy to the employer covering the worker and sought to recover the remainder of the paid-out benefits from the third party,
The trial court dismissed the complaint and found that the carrier had no right to subrogation.
Along the way, the carrier’s attorney cited four non-existent cases in his merits brief. When he was made aware of the issue, the attorney failed to take responsibility for his misuse of artificial intelligence and did not revise the brief or advise the court of the hallucinated case law.
In particular, the carrier’s attorney cited to the following cases, none of which exist:
+ “Aetna Cas. & Sur. Co. v. Hanna, 224 N.J. Super. 462 (App. Div. 1988).” The attorney cited this case with the following parenthetical: (“the Appellate Division affirmed a workers’ compensation carrier’s right to subrogation against an employee’s personal UIM benefits.”) This case does not appear in the New Jersey Superior Court Reports.
+ “Hodge v. Allstate Ins. Co., 130 N.J. Super. 437, 440 (Law Div. 1974), aff’d o.b., 134 N.J. Super. 274 (App. Div. 1975).” This case, and the decision purportedly affirming it, do not appear in the New Jersey Superior Court Reports.
+ “New Jersey Mfrs. Ins. Co. v. Quality Textile Co., 386 N.J. Super. 269, 279 (App. Div. 2006).” This case does not exist in the New Jersey Superior Court Reports.
+ “Wickner v. Food Fair Stores, Inc., 116 N.J. Super. 331, 335 (Law Div. 1971), aff’d o.b., 120 N.J. Super. 262 (App. Div. 1972).” This case, and the decision purportedly affirming it, does not exist in the New Jersey Superior Court Reports.
When opposing counsel mentioned that they could not locate the Aetna case, the carrier’s attorney responded, “While the [d]efendant’s search may have been unsuccessful, a review of legal databases confirms the existence of a case involving a New Jersey Appellate Division opinion with a similar citation. In any event, the cases cited by AmTrust in its primary brief … clearly establish the legal foundation for the subrogation claim against UIM benefits.”
The carrier appealed to Appellate Division.
Rule of Law
New Jersey Rule of Professional Conduct 3.3 requires a lawyer to uphold candor to the tribunal, including by not knowingly making “a false statement of material fact or law” or offering “evidence that the lawyer knows to be false.” The New Jersey Supreme Court’s preliminary guidelines on AI direct that a lawyer who uses AI in the preparation of legal pleadings, arguments, or evidence remains responsible to ensure the validity of those submissions. While the RPCs do not require a lawyer to disclose the use of AI, such use does not provide an excuse for the submission of false, fake, or misleading content.
What the Appellate Division Said
“We are stunned by the carelessness and dismissiveness of [the carrier’s attorney’s] statement in a filed appellate brief,” the court wrote, noting that citing to hallucinated caselaw violated the RPCs.
“Non-existent cases such as the four cited by plaintiff’s counsel are ‘hallmarks of… generative artificial intelligence,'” the court wrote, citing Green Bldg. Initiative, Inc. v. Peacock, 350 F.R.D. 289 (D. Or. 2025). “As we have seen too many times already, hallucinated cases look like real cases as they are identified by a case name, a citation to a reporter, the name of a district or appellate court, and the year of the decision. But they are not real cases.”
The court noted that while not every AI mistake will warrant a sanction, the attorney’s actions in this case called for a fine.
“Even after the non-existent “Aetna” case was pointed out in defendants’ opposition brief, plaintiff’s counsel flippantly disregarded the error and failed to make the appropriate retraction,” the court wrote. “He failed to ‘present any reasonably competent analysis of the law,’ … but instead, glibly ignored the issue in his reply brief, in contravention of his duty of candor to the tribunal.”
As a result, the court imposed a $1,000 fine on the attorney thanks to “utter indifference to his obvious misstatements of law to the court.”
Verdict: On the dispositive issue in the case, the court affirmed in part and remanded for an order dismissing the complaint without prejudice.
Takeaway
Attorneys have a duty of candor that cannot be outsourced.
