The lawsuit alleges Vuori violated the California Labor Code by failing to properly calculate overtime premiums for retail employees. But the court’s sanctions were unrelated to the merits of the overtime claims and instead focused on counsel’s use of unverified AI-generated legal authority.
Plaintiffs’ attorney James Dal Bon sought preliminary approval of a proposed class and collective action settlement that would have required Vuori to pay more than $1 million to its retail employees. According to the court, Dal Bon’s motion included eight hallucinated quotations and one nonexistent case citation.
After an initial motion for preliminary approval failed, Dal Bon filed a second motion and later submitted a corrected version. But U.S. Magistrate Judge Nathanael M. Cousins found the motion “rife with hallucinated quotes and a nonexistent case,” reported Law360. Dal Bon acknowledged that he had used six different AI tools to draft and review the filing, including one tool to check the others, but admitted he did not manually verify the citations before submitting the motion.
Sanctions Imposed
The court found that Dal Bon violated his duty of candor to the tribunal under California Rule of Professional Conduct 3.3 by citing nonexistent cases and quotations and by certifying through his signature that he had conducted a reasonable inquiry when he had not.
Judge Cousins imposed sanctions under the Federal Rules of Civil Procedure, citing several failures:
- Citing nonexistent cases and quotations to the court;
- Submitting legal authority without conducting a reasonable inquiry; and
- Relying solely on unverified AI output — even when cross-checked by multiple tools — in violation of professional duties of candor and competence.
Penalties Imposed
As a result of the fabricated citations, the court:
- Ordered Dal Bon to pay $250 to the clerk of court;
- Struck the settlement motions permanently;
- Found Dal Bon inadequate to represent the class, barring him from filing further settlement approval motions in the case; and
- Referred the matter to the court’s Standing Committee on Professional Conduct.
In explaining the sanctions, Judge Cousins warned that “the rise in non-existent cases and quotations hallucinated by artificial intelligence tools” is of “particular concern.”
While the court acknowledged Bon’s “transparency and candor in admitting the unverified use of AI,” Judge Cousins said the conduct was “highly problematic and simply unacceptable,” particularly given the growing number of widely publicized cases involving AI-generated fake citations.
“False case citations have real harms,” the judge wrote, including burdening courts and opposing parties, undermining client advocacy, and diminishing trust in the judicial system.
Courts Nationwide Issue Warnings
Judge Cousins isn’t alone. In one case, a Michigan federal judge sanctioned counsel for submitting filings containing AI-generated false quotations and citations. “Attorneys who rely on AI to supplement their research do so in light of the well-known risks inherent in using those tools,” wrote U.S. District Judge F. Kay Behm.
In another case reported by Bloomberg Law, courts flagged a rise in AI misuse in legal filings, resulting in fines and disciplinary warnings across multiple jurisdictions.
Canadian Lawyer Magazine reported in February 2025 that two attorneys from U.S. personal injury firm Morgan & Morgan faced sanctions from a Wyoming federal judge after including AI-hallucinated case citations in a lawsuit against Walmart. One attorney later apologized, calling the error inadvertent, according to Reuters.
Vuori Lawsuit
READ MORE CALIFORNIA LABOR LAW LEGAL NEWS
The Vuori wage and hour lawsuit, filed by former Vuori hourly employee Terrence Buchanan, alleges the company miscalculated overtime pay by failing to include commissions or bonuses when determining overtime premiums. The proposed settlement would have provided approximately $1.1 million to about 2,895 current and former retail employees. The sanctions ruling, however, addressed only counsel’s conduct and did not involve any findings on the merits of the overtime claims against Vuori.
AI Hallucinations in Court Filings
Judges have stressed that using AI tools is not improper, but failing to independently verify citations violates attorneys’ duties of candor and competence. Courts have rejected arguments that cross-checking multiple AI tools satisfies due diligence, warning that false citations waste judicial resources and undermine trust in the legal system. Sanctions imposed in recent cases reflect a growing consensus: AI may assist legal research, but human verification remains mandatory.
Source link
