Allen v. Mercedes-Benz USA, LLC

How did the court address the AI-related conduct?

The court found that Whitman violated Federal Rule of Civil Procedure 11, because he did not act reasonably to ensure his legal contentions accurately represented existing law, and Local Rule 180(e), through a knowing violation of California Rule of Professional Conduct 3.3(a)(1). It referred the matter to the State Bar of California "for whatever proceedings the State Bar deems appropriate" and directed the Clerk to serve the order on the State Bar. The order imposes no monetary or other sanction and does not describe the referral as a sanction.

Why does Allen v. Mercedes-Benz USA, LLC matter for law firms using AI?

In a reply brief supporting a motion to remand, plaintiff’s counsel attributed two quotations to Ninth Circuit opinions that do not contain them. One, attributed to Crum v. Circus Circus Enterprises, 231 F.3d 1129 (9th Cir. 2000), concerned determining jurisdiction at the time of removal; the court noted that Crum was not a removal case at all. The other, attributed to Matheson v. Progressive Specialty Ins. Co., 319 F.3d 1089 (9th Cir. 2003), concerned post-removal evidence, which the court said Matheson does not address.

Judge Calabretta ordered counsel to “explain the origin of” the quotations. The response did not do so. It offered a revised discussion of the two cases, which the court found still misrepresented Crum, and a further quotation attributed to Voss-Curry v. Crown Equipment Corp. (W.D. Wash. 2022) that the court could not find in that decision or in any Westlaw or Lexis result. The court added that the closest passage in Voss-Curry described the plaintiff’s argument there, which the court in that case rejected.

The court found violations of Rule 11 and of Local Rule 180(e), the latter through Rule 3.3(a)(1) of the California Rules of Professional Conduct, because counsel “knowingly made, and failed to correct, false statements of law.” The only consequence ordered was a referral to the State Bar of California and service of the order on the State Bar. The order does not discuss artificial intelligence or say how the quotations were produced.

For firms documenting compliance, the sequence is the notable feature: the court’s finding of a knowing false statement drew on the response to the order to explain as much as on the original brief. Whether and how the referral affects any particular attorney is a matter for the State Bar; firms with questions about their own obligations should consult a licensed California attorney.