The imposition of sanctions against three Morgan & Morgan attorneys marks a significant moment in the legal industry’s adaptation to artificial intelligence. U.S. District Judge Kelly H. Rankin sanctioned the attorneys for submitting court documents containing fabricated legal cases generated by AI. These events come in the context of Morgan & Morgan’s standing as the 42nd largest U.S. law firm by headcount, underscoring the broader implications for legal practices nationwide.
The case, Wadsworth v. Walmart Inc. and Jetson Electric Bikes, LLC, revealed deficiencies in the verification processes undertaken by Morgan & Morgan attorney Rudwin Ayala, who utilized the firm’s in-house AI platform, MX2.law, to draft motions containing eight fictitious cases. This misstep resulted in the revocation of Ayala’s pro hac vice admission and a financial penalty of $3,000, while supervising attorney T. Michael Morgan and local counsel Taly Goody were fined $1,000 each. Judge Rankin’s order underscored a breach of Rule 11 of the Federal Rules of Civil Procedure, which mandates that attorneys perform a reasonable inquiry into legal citations.
- Rudwin Ayala incorporated AI-generated citations without verification.
- Supervisors T. Michael Morgan and Taly Goody participated by signing the erroneous documents, which is viewed as a nondelegable responsibility to ensure accuracy.
In response, Judge Rankin emphasized the sanctity of reasonable inquiry within legal practice, stating that “failure to read a contract does not relive a signor of their contractual obligations.” The judge further clarified that despite the medium of AI, the requirement to verify the legitimacy of legal sources remains unchanged.
Importantly, the court did consider the attorneys’ proactive measures—such as withdrawing the deficient motions, acknowledging the error, compensating opposing counsel’s fees, and implementing preventive protocols—as mitigating circumstances. Notably, no sanctions were levied against Morgan & Morgan itself, as the firm had already prescribed guidelines against using AI in a manner comparable to Ayala’s approach and required affirmation that AI-derived information would be independently validated.
The ruling echoes earlier concerns such as those in Mata v. Avianca, Inc., a decision from the Southern District of New York concerning AI hallucinations in legal documents. Judge Rankin’s ruling serves as a cautionary tale for law firms embracing AI, reiterating that while the technology can offer efficiencies, the fundamental duty of legal accuracy and verification remains paramount. As attorneys navigate the AI landscape, Judge Rankin’s advice is straightforward: “Make a reasonable inquiry into the law before signing (or giving another permission to sign) a document, as required by Rule 11.”
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