Fiduciary duty and litigation

AI hallucinations in an ERISA tobacco surcharge case

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“Lawyers cannot outsource their ethical obligations to an AI program.”

That’s what a judge in Tennessee said this week in an order on another ERISA tobacco surcharge case.

In Bailey v. Sedgwick (W.D. Tenn., June 8), Judge Thomas Parker gave preliminary approval to an ERISA settlement over a tobacco surcharge. Standard order. But footnote 1 opens with a warning.

Plaintiff’s counsel had filed a motion citing cases that did not exist, with quotes that appeared in no real opinion. Counsel conceded an AI tool likely hallucinated them. The court ordered a corrected motion and declined to sanction this time.

Then it pointed to the Sixth Circuit. In United States v. Farris, that court imposed significant sanctions for the same conduct. In Whiting v. City of Athens, it held that citing even a single fake case can be sanctionable, because no filing should contain a citation a lawyer has not personally read and verified.

The Sixth Circuit’s point is hard to misread.

The tools make all of us faster. They don’t move our names off the signature line.

Sources

  • Bailey v. Sedgwick
  • United States v. Farris
  • Whiting v. City of Athens

Originally posted on LinkedIn, where the discussion and source links live in the comments.

About the author

Chris Vanderwolk is Director of Compliance and Innovation at OneDigital | Kistler Tiffany Benefits General Agency, where he helps brokers and employers navigate the regulatory complexity of employee benefits. An ERISA attorney with more than 19 years in the benefits industry, he specializes in translating what the law actually requires into language people can use.

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