Cain v. Hyatt Corporation d/b/a Hyatt Regency Resort Lost Pines Spa and Resort
U.S. District Court, Western District of Texas, Austin Division · W.D. Tex. · Texas bar guidance
Conduct
Here, plaintiffs' response to a partial motion to dismiss cited a nonexistent federal case; one attorney of record said he did not prepare or review the filing.
Consequence
Show-cause hearing ordered for the other attorney of record; after he apologized and described his firm's strengthened verification policy, the court imposed no sanction.
Lesson
Here the court imposed no Rule 11 sanction because the conduct was not intentional, was a first offense, and was acknowledged with an apology.
Verified September 30, 2026
- Citation
- Cain v. Hyatt Corp., No. 1:25-cv-02053-ADA-SH, Order (W.D. Tex. Aug. 19, 2026) (Hightower, M.J.), ECF No. 28 (no sanction imposed); see id., Order (W.D. Tex. Aug. 5, 2026), ECF No. 25 (order to show cause)
- Decided
- August 19, 2026
Summary
In a suit by Jennifer Lynn Cain, individually and as next friend of C.C., a minor, and Danny Cain against Hyatt Corporation, the plaintiffs' Response to Defendant's Motion for Partial Dismissal (Dkt. 9 at 7) cited "nonexistent case Henry v. Kroger Co., No. 4:19-cv-00630, 2019 WL 6311295 (E.D. Tex. Nov. 25, 2019)." At a July 29, 2026 hearing, plaintiffs' counsel Lino Ochoa "represented that he did not prepare or review the response before it was filed." On August 5, 2026, United States Magistrate Judge Susan Hightower, acting on a referral of pretrial matters, ordered the plaintiffs' other attorney of record, Daniel Miguel Hernandez, "to appear and show cause under Rule 11(c)(3) why the conduct described in this Order has not violated Rule 11(b)" at a hearing on August 19, 2026. The order, quoting Duncan v. Gridhawk, recited that counsel are "duty-bound to check and certify that all factual contentions and statements of law are warranted and nonfrivolous."
- AI tool:
- Unidentified (neither the show-cause order nor the order declining sanctions mentions AI or names a tool; both call the cited case nonexistent)
How did the court address the AI-related conduct?
Hernandez filed a response on August 18, 2026 and appeared at the August 19 hearing. According to the court's August 19, 2026 order (Dkt. 28), he "acknowledged and apologized for the mistake, submitted his law firm's citation verification policy, and described how he has strengthened that policy since the Court identified the error." The court imposed no sanction, "agreeing that no further action is needed 'to deter repetition of the conduct or comparable conduct by others similarly situated' under Rule 11(c)(4)," because the conduct "was not intentional or malicious, where it constituted a first offense, and where the attorney had already recognized and apologized for his actions," quoting the Fifth Circuit's decision in Jenkins v. Methodist Hospitals of Dallas.
Why does Cain v. Hyatt Corporation d/b/a Hyatt Regency Resort Lost Pines Spa and Resort matter for law firms using AI?
Cain is a short Rule 11 episode that ended without a sanction. The plaintiffs’ response to a partial motion to dismiss cited Henry v. Kroger Co., complete with an Eastern District of Texas docket number and a Westlaw citation, and Magistrate Judge Hightower identified it as a “nonexistent case.” At a hearing on July 29, 2026, one of the plaintiffs’ two attorneys of record said he had not prepared or reviewed the response. The court then ordered the other attorney, Daniel Miguel Hernandez, to appear and show cause under Rule 11(c)(3), reminding counsel that the Rule 11(b) certification applies to legal citations “formed after an inquiry reasonable under the circumstances.”
The August 19 order explains why the court stopped there. Hernandez filed a written response, appeared, “acknowledged and apologized for the mistake,” submitted his firm’s citation verification policy, and described how the firm had strengthened it since the error was identified. The court imposed no sanction, agreeing under Rule 11(c)(4) that nothing further was needed to deter repetition, and borrowing the Fifth Circuit’s description in Jenkins of conduct that “was not intentional or malicious, where it constituted a first offense, and where the attorney had already recognized and apologized for his actions.”
Neither order mentions AI; the Charlotin tracker codes the AI use as implied. For firms, the value of the case is in the response rather than the error: counsel put before the court a prompt acknowledgment, a written verification policy that already existed, and evidence of concrete improvements, and the court declined to sanction because the conduct was not intentional, was a first offense, and was acknowledged with an apology.
Implications for your firm
Operational steps a firm reading this case may wish to consider documenting. Strategic and rule-application calls belong to your firm's attorneys.
- Document a citation verification policy before it is needed. Here the attorney submitted his firm's policy, and described how it had been strengthened, at the show-cause stage, and the court declined sanctions.
- Review who prepares and who reviews each filing when more than one lawyer appears. One attorney of record told the court he had not prepared or reviewed the response, and the show-cause order was directed to the other.
- Consider the reasons the court gave for declining sanctions, quoting Fifth Circuit precedent: conduct that was not intentional or malicious, a first offense, and an attorney who had already recognized and apologized for the error.
Sources
Primary sources
- AI attribution is a Charlotin tracker inference. Neither order mentions artificial intelligence; the court calls Henry v. Kroger Co. 'nonexistent' and does not say how the citation was generated.
- Hernandez's written response (Dkt. 26) and his firm's citation verification policy were not read; the entry relies on the court's summary of them in Dkt. 28.