Court of Appeal sanctions attorney for relying on AI to fabricate legal authority: Noland v. Land of the Free, L.P.

In Noland v. Land of the Free, L.P. (2025) 114 Cal.App.5th 426, the Court of Appeal (Second Appellate District, Division Three) affirmed the dismissal of a plaintiff’s Labor Code and other claims and imposed sanctions on her counsel for fabricating legal authority using generative artificial intelligence (AI).

Plaintiff, a leasing agent, resigned after discovering Defendant lacked necessary permits to lease its commercial facility. She sued, alleging numerous wage and hour violations, constructive termination, IIED, and other claims. The trial court initially denied Defendant’s motion for summary judgment as untimely but later granted a refiled motion after the parties stipulated to a trial continuance. The court found Plaintiff was an independent contractor, was not owed commissions, did not suffer any adverse action, and lacked triable issues for her IIED claim. Plaintiff appealed.

On appeal, the Court of Appeal affirmed summary judgment against Plaintiff.Although the court noted that “nearly all of the quotations in plaintiff’s opening brief, and many of the quotations in plaintiff’s reply brief, have been fabricated,” and many cited cases did not support the propositions cited or did not exist, the court exercised its discretion to decide the case on its merits rather than dismiss the appeal. It rejected Plaintiff’s argument that the trial court lacked discretion to review Defendant’s second motion for summary judgment, which lacked new facts or a change of law, following Le Francois v. Goel (2005) 35 Cal.4th 1094. 

After rejecting Plaintiff’s remaining arguments, the court imposed sanctions on Plaintiff’s counsel for relying on AI to generate legal authority. In response to the court’s order to show cause, Plaintiff’s counsel admitted relying on AI but being unaware of its propensity to “hallucinate” legal sources, arguing the appeal was not frivolous. The Court of Appeal firmly rejected this defense, holding that “relying on fabricated legal authority is sanctionable” and that attorneys cannot delegate cite-checking to any form of technology. The court further found the counsel’s errors were not “isolated” but pervasive, holding that the appeal was frivolous because it “rest[ed] on negligible legal foundation” (Malek Media Group, LLC v. AXQG Corp. (2020) 58 Cal.App.5th 817, 834–835). The court imposed sanctions of $10,000 but declined to order them payable to opposing counsel. It concluded with an admonishment: “There are many instances—hopefully not in a judicial setting—where hallucinations are circulated, believed, and become ‘fact’ and ‘law’ in some minds. We all must guard against those instances.” 

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