Button v. McCawley

What sanction did the court impose?

On February 4, 2026 (ECF No. 87), the court adopted the R&R and awarded the defendant $11,740, the anti-SLAPP fee award the R&R recommended, not an AI sanction. It overruled the objections on clear-error review and, additionally, "under its inherent authority due to Plaintiffs' bad faith conduct," calling that a sanction to "redress the wronged party." It said it was "inclined to further sanction Plaintiffs under Rule 11, including but not limited to payment of some or all of the attorneys' fees not recommended," and ordered them to show cause, with a signed certification on whether they personally reviewed the filing and how they verified its authorities, warning that failure "will result in the imposition of sanctions without further notice." On June 2, 2026 (ECF No. 99), referring to "purported hallucinated and fabricated authority," the court declined "to impose sanctions at this time" and discharged the show-cause. It recorded the Buttons' concession that they now have notice of their errors and warned that "any subsequent filings that contain similar errors may be deemed to be filed in bad faith." The case remains closed. The Buttons' March 10, 2026 notice of appeal (ECF No. 90) is not public; its scope and status are unknown.

Why does Button v. McCawley matter for law firms using AI?

Button v. McCawley shows a court moving from admonition to a bad-faith finding over the course of one fee dispute. The magistrate judge flagged nonexistent cases and a misattributed Parekh quotation and told the pro se plaintiffs to make sure their citations were accurate, without recommending sanctions because it was, in the district court’s words, “ostensibly pro se Plaintiffs’ first time having their citations called into doubt.” The Buttons then repeated the Parekh citation in their objections with the quotation marks removed, cited a Schwartz v. Millon Air quotation the court could not find in the opinion, and described the magistrate judge’s analysis in language the court said “appears nowhere” in her order. Judge Leibowitz concluded that bad faith was “the only reasonable conclusion” and overruled the objections under the court’s inherent authority as well as on clear-error review.

The two orders need to be read together. The February 4, 2026 order awarded $11,740, but that figure is the anti-SLAPP fee award the magistrate judge recommended; the court’s AI-related steps were the inherent-authority overruling and a Rule 11 show-cause, in which the court said it was inclined to include payment of some or all of the fees not recommended and required a signed verification certification. On June 2, 2026, after further briefing, the court declined to impose Rule 11 sanctions “at this time” and discharged the show-cause. It recorded the plaintiffs’ concession that they are now on notice and, in its own words, warned that similar errors in later filings “may be deemed to be filed in bad faith.”

Footnote 3 of the February order cites decisions from the Central District of California, the Southern District of New York, and the Western District of Washington addressing the same plaintiffs’ citations. Here the court used those decisions as further support for its view that the Buttons were on notice. Firms documenting compliance may wish to consider how a court’s earlier admonition, in the same case or another, can shape a later finding about the filer’s state of mind.