Brankle v. Schmell

What sanction did the court impose?

In a memorandum decision, the Court of Appeals affirmed on all issues and remanded. It held that the local rule did not give litigants "carte blanche to serve interrogatories ad infinitum once they have obtained leave of court," so the motion to compel was properly denied. On the expense award under Trial Rule 37(A)(4), it rejected Brankle's argument that his motion was substantially justified, stating that "[a] motion riddled with citations to hallucinated authorities is hardly 'substantially justified.'" Brankle did not expressly challenge the amount of the award, and the court held any reasonableness challenge waived for lack of cogent reasoning. It held his argument that the award was unjust waived for lack of supporting authority and record citations, and noted that he did not address the trial court's findings that he cited inapplicable Commercial Court Rules and hallucinated authorities. In a footnote it also listed his own Appellate Rule 46 violations, including attaching an unrelated order of the Court of Appeals instead of the order being appealed. The court reiterated that a pro se litigant is held to the same standards as a trained attorney. Because Schmell prevailed, it held she is entitled to the reasonable appellate attorneys' fees she incurred in defending the award, and remanded for the trial court to determine that amount.

Why does Brankle v. Schmell matter for law firms using AI?

Brankle ties AI-style citation failures to a specific fee-shifting standard. Indiana Trial Rule 37(A)(4) requires the court to award expenses against a party whose motion to compel is denied unless the motion was “substantially justified” or other circumstances make an award unjust. The Court of Appeals answered the first exception directly: “A motion riddled with citations to hallucinated authorities is hardly ‘substantially justified.’” The quality of the authority, in other words, was treated as part of whether the motion had a reasonable basis at all.

The AI attribution comes from the trial court, and it was framed as an opinion rather than a finding: Brankle’s “repeated citations to rules that do not exist or fictitious cases” led the trial court “to opine that Brankle is using ChatGPT or other form of artificial intelligence to prepare his numerous motions, responses, and notices to the Court which is a violation of Ind. Trial Rule 11(A).” The Court of Appeals quoted that passage and itself described the authorities as hallucinated. What it said Brankle failed to address on appeal was “the trial court’s findings that he cited to inapplicable Commercial Court Rules and hallucinated authorities,” not the ChatGPT remark. It made no finding about which tool, if any, he used.

The decision also shows how an appeal can compound a sanction. Because Rule 37(A)(4) expenses include the cost of defending the award on appeal, Schmell’s success carried an entitlement to her appellate attorneys’ fees, with the amount left to the trial court on remand. Firms documenting compliance may wish to consider that the downstream cost of a discovery motion built on unverified authority can exceed the original award.