Capital Standard, LLC v. U.S. Bank National Association
District Court of Appeal of Florida, Second District · Fla. 2d DCA · Florida bar guidance
Conduct
Appellate briefs with 46 AI hallucinations, including a fake First DCA case; counsel ignored a show-cause order for over a month.
Consequence
$1,500 fine, personal liability for opposing fees (not chargeable to clients), and referral to The Florida Bar; merits decided on corrected briefs.
Lesson
Ignoring a show-cause order is sanctioned separately, and a court can bar the lawyer from passing AI sanctions through to the client.
Verified September 28, 2026
- Citation
- Capital Standard, LLC v. U.S. Bank Nat'l Ass'n, No. 2D2024-1392 (Fla. 2d DCA Aug. 21, 2026)
- Decided
- August 21, 2026
Summary
In an appeal from a final declaratory judgment for U.S. Bank entered by the Pinellas County circuit court, appellants' counsel, Kenneth H. Keefe of The Keefe Law Firm, P.A., filed an amended initial brief with at least thirty-one instances of citing or quoting real cases for propositions they do not contain, and a reply brief that "added another fifteen AI hallucinations, including the fake case Board of Regents v. Wilson, 365 So. 2d 213 (Fla. 1st DCA 1979)[.]" The court issued an order to show cause on January 8, 2026 with a January 12 deadline; more than a month passed without a response, and on February 20 the court struck both briefs and allowed a new initial brief. Keefe then filed a short, unsworn response suggesting he had missed the order while preparing for a trip and that he had "utilized artificial intelligence as a supplemental research tool." The court found that generative AI was his "primary or only" research tool, used "from the beginning of this appeal without any apparent guardrails."
- AI tool:
- Unnamed generative AI tool (counsel described it as "a supplemental research tool"; the court found it was his "primary or only one")
- Sanction amount:
- $1,500 fine against attorney Kenneth H. Keefe ($500 for a belated show-cause response, $1,000 for AI misuse), payable within 14 days; personal liability for U.S. Bank's appellate fees for answering the amended initial brief (amount on remand); may not be charged to clients; referral to The Florida Bar
What sanction did the court impose?
The Second District affirmed on the merits, deciding the appeal on the second amended briefs with verified citations. It fined Keefe $500 for the belated show-cause response and $1,000 for his AI misuse, payable to the clerk within fourteen days; ordered him to personally pay the attorney's fees U.S. Bank incurred in answering the amended initial brief, remanding to the trial court to set the amount; provided that he "is solely responsible for paying the fee award and fine and may not charge his clients for those amounts"; and referred him to The Florida Bar.
Why does Capital Standard, LLC v. U.S. Bank National Association matter for law firms using AI?
Capital Standard is a Florida appellate decision in which the court was explicit that “the problem here is not Attorney Keefe’s use of generative AI.” The problem, the court said, was using generative AI without ensuring that the legal propositions and authority it generated are trustworthy: forty-six hallucinations across two briefs, most of them real cases quoted or cited for propositions they do not contain, plus a nonexistent First District decision. The court’s show-cause order went unanswered for more than a month, and when Keefe responded he did not apologize “for wasting both the court’s and U.S. Bank’s time and resources.”
The sanctions package is built to keep the cost on the lawyer. The fine is modest, $1,500 in two parts, but the court also shifted U.S. Bank’s appellate fees for answering the defective brief to Keefe personally and prohibited him from charging his clients for either the fine or the fee award. It then referred him to The Florida Bar. The court warned that “we may not be so gentle on attorney offenders in the future.”
The decision discusses Florida’s amended Rule 2.515(d), effective June 15, 2026, while noting that the amendment post-dates the briefs at issue. As amended, subdivision (d)(2) requires every filer to represent that cited authorities exist and are accurately cited. Firms documenting compliance for Florida appellate work may wish to consider that the representation now attaches to every filing and that the Second District has shown it will sanction the lawyer’s own time-management failures alongside the citations.
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 calendaring and response procedures for show-cause orders. The court imposed a separate $500 fine for a response filed more than a month late, and found the late filing short and unsworn.
- Review engagement terms and billing practices so that sanctions and fee awards arising from counsel's AI misuse are not passed to the client; the court expressly prohibited it here.
- Verify that citations support the stated proposition, not only that the case exists. Thirty-one of the problems in the amended initial brief were real cases cited for propositions they do not contain.