Doe 1 v. Shirley Lai
U.S. District Court, Central District of California · C.D. Cal. · California bar guidance
Conduct
Here a motion to dismiss quoted a sentence the court could not find in Headley or any opinion, and cited Dann for a proposition the court could not find in that case.
Consequence
Show-cause under Rule 11, § 1927 and inherent power; after counsel's sworn explanation, the court discharged it and admonished counsel to check every future citation.
Lesson
Here the court demanded highlighted copies of the cited cases or a sworn explanation within two days, then accepted counsel's account and closed with an admonition.
Verified September 30, 2026
- Citation
- Doe 1 v. Lai, No. EDCV 25-3485 JGB (DTBx), Order Discharging the Order to Show Cause (C.D. Cal. Mar. 3, 2026) (Bernal, J.), ECF No. 16; see also Order (C.D. Cal. Feb. 17, 2026), ECF No. 14
- Decided
- March 3, 2026
Summary
Plaintiffs Doe 1 and Doe 2 sued Shirley Lai and others, alleging forced labor, involuntary servitude and trafficking under 18 U.S.C. § 1589 and related provisions, together with California wage claims. In a February 17, 2026 order denying Lai's motion to dismiss, the court stated that the motion "appears to contain false citations and quotations" and that "Defendant's Counsel has not abided by either rule," referring to Cal. Bar Rule 3.3 and Rule 11. The motion quoted Headley v. Church of Scientology Int'l, 687 F.3d 1173 (9th Cir. 2012), as stating that religious motivation or disciplinary practices do not "convert their service into involuntary servitude," and the court was unable to find that quotation "anywhere in the opinion, or in any other opinion." It also could not find a cited proposition in United States v. Dann, 652 F.3d 1160 (9th Cir. 2011). The court also wrote that Lai's trafficking-claim arguments "rest on false quotations to Ninth Circuit case law." It named the signing attorney, Orlando F. Cabanday, and ordered him to produce highlighted copies of both cases or explain in a sworn declaration, by February 19, how the quotation and citations got into the motion and why he should not be sanctioned under Rule 11, 28 U.S.C. § 1927, and the court's inherent power.
- AI tool:
- Unidentified (the February 17, 2026 order said such errors "often indicate the presence of artificial intelligence-generated hallucinations"; neither order finds AI use or names a tool, and counsel's sworn response attributed the errors to drafting and said he researched on Westlaw)
What did the court warn about?
Cabanday filed a sworn response on February 19, 2026 (ECF No. 15). He stated that the Headley sentence was "a composite sentence placed in quotation marks" that "should have been presented as a paraphrase," that he had "overstated the holding" of Dann, that he located and reviewed both opinions through Westlaw, and that he has "implemented stricter verification procedures for future filings." On March 3, 2026, Judge Jesus G. Bernal found the responses "sufficient" and discharged the order to show cause. The same order stated that "the Court admonishes Defendant's counsel to ensure all future citations are meticulously checked to ensure quotations are accurate and that Defendant's counsel's citations are in fact supported by the cases cited." No monetary or other sanction was imposed and no referral was made. The motion to dismiss had already been denied on the merits in the February 17 order, and the docket shows the case proceeding to an answer and a trial scheduling order.
Why does Doe 1 v. Shirley Lai matter for law firms using AI?
Doe 1 v. Lai shows a court moving quickly from a defective citation to a show-cause order, and then closing the matter on counsel’s sworn explanation. In the same order that denied the defendant’s motion to dismiss, Judge Bernal set out a separate section headed “Sanctions.” The court identified two problems as “[t]he most serious instances in the Motion”: a quotation attributed to the Ninth Circuit’s Headley decision that the court could not locate in that opinion or any other, and a proposition attributed to Dann that the court could not find in that case. The order observed that “[s]uch misquotations, miscitations, and misrepresentations often indicate the presence of artificial intelligence-generated hallucinations,” and it grounded counsel’s obligations in the State Bar of California’s candor rule (cited in the order as “Cal. Bar Rule 3.3”) and Federal Rule of Civil Procedure 11.
The remedy the court chose was a verification demand rather than an immediate sanction. It ordered counsel to deliver true copies of Headley and Dann, with the quoted language and stated principles highlighted, within two days, and, if he could not, to explain in a sworn declaration how the quotation and citations came to be in the motion and why he should not be sanctioned. Counsel’s declaration conceded that the Headley sentence was a composite paraphrase wrongly placed in quotation marks and that he had overstated Dann, and it described his research on Westlaw, a separate cite-check by his legal assistant, and new verification procedures. The declaration does not mention artificial intelligence.
The court found the responses sufficient, discharged the order to show cause, and admonished counsel to check future citations “meticulously.” Neither order finds that AI was used. Firms documenting compliance may wish to consider that, in this case, the court treated a misquotation and a misstated holding in real cases as serious enough to require a sworn explanation within two days, and that the explanation it accepted described specific verification steps going forward.
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.
- Verify that anything placed in quotation marks appears verbatim in the cited opinion. Here counsel told the court a paraphrase had been left in quotation marks, and the court had been unable to find the sentence in any opinion.
- Review whether each authority states the precise proposition it is cited for. The court could not find the stated rule in Dann, and counsel conceded he had overstated its holding.
- Document your citation-checking steps before filing. The show-cause order gave counsel two days to produce highlighted copies or a sworn explanation of how the citations were included.
- Consider that a discharged show-cause can still end in an admonition. Here the court found the response sufficient but admonished counsel to check all future citations.
Sources
Primary sources
- AI attribution is a Charlotin tracker inference ('Implied'). The February 17 order says only that such errors 'often indicate' AI-generated hallucinations; the March 3 order does not mention AI, and counsel's sworn response (ECF No. 15) does not mention AI and attributes the errors to paraphrasing and proofreading lapses.