Ellis George LLP and K&L Gates LLP sanctioned $31,100 for AI hallucinations
Attorneys from Ellis George LLP and K&L Gates LLP were jointly sanctioned $31,100 for submitting AI-generated citations in Lacey v. State Farm General Ins. Co., with some citations found to be nonexistent and others erroneous. The sanctioning decision was described as a collective debacle by a special master.
The sanctions were the result of a collective debacle where AI-generated citations were submitted without proper human verification.
Key facts
- What
- Attorneys from Ellis George LLP and K&L Gates LLP were jointly sanctioned $31,100 for submitting AI-generated citations in Lacey v.
- Incident date
- May 5, 2025
- Who
- Ellis George LLP and K&L Gates LLP
- Failure mode
- Hallucination
- AI surface
- Copilot
- Severity
- Medium
What happened
In Lacey v. State Farm (C.D. California), attorneys from Ellis George LLP and K&L Gates LLP submitted filings that included nine incorrect citations, two of which were entirely nonexistent. A special master described the situation as a collective debacle and imposed a joint and several sanction of $31,100 on both firms. The errors persisted even in corrected versions of the briefs.
What broke inside the model
- 01 · TriggerA user asks for a fact, a citation, or a figure.
- 02 · Model stepThe model writes a fluent, confident answer.
- 03 · Control gapNothing ties the claim back to a real source.
- 04 · FailureA fabricated fact ships as if it were verified.
- 05 · ConsequenceThe false claim reaches a customer, a court, or the public.
Confidence holds, and even spikes, as the claim detaches from any source.
The failure was caused by the use of generative AI tools, including CoCounsel, Westlaw Precision, and Google Gemini, which hallucinated legal citations. The attorneys failed to perform a manual verification of the citations before submitting them to the court.
What it cost
Sources
- PressThis Was a Collective Debaclejdsupra.com
- PressJudge imposes sanctions for collective debacle involving AI hallucinationsabajournal.com
- Reader-SubmittedSanctions for AI Misuse in U.S. Federal Litigationddg.fr
Cite this entry
https://failureindex.ai/failures/ellis-george-llp-gates-llp-sanctionedAI Failure Index. "Ellis George LLP and K&L Gates LLP sanctioned $31,100 for AI hallucinations" (FI-0268). Realm Labs. https://failureindex.ai/failures/ellis-george-llp-gates-llp-sanctioned (indexed Jun 5, 2026).Data fields CC-BY 4.0, prose citation permitted. Incident ID FI-0268. Full dataset at /data.
Note from Realm Labs, the Index steward
How Realm would have caught this
- Prism
- OmniGuard
- AI Detection & Response (AIDR)
A runtime layer that watches the model's internal state can flag the moment a model commits to a claim it has no support for, and hold or reroute the response before it reaches a user. Realm reads those signals in real time rather than grading the transcript after the fact.