Appeals of DSME Construction Co., Ltd.
Armed Services Board of Contract Appeals (ASBCA) · ASBCA
Verified May 5, 2026
- Citation
- Appeals of DSME Construction Co., Ltd., ASBCA No. 63878 (March 13, 2026) (McIlmail, A.J.)
- Decided
- March 13, 2026
Summary
In a default-termination appeal under a U.S. Army contract for facilities maintenance services in the Republic of Korea, the government moved to strike appellant DSME Construction's December 1, 2025 surreply, asserting it contained 27 false or misleading citations including 16 to cases that do not appear to exist, which the government characterized as "the hallmarks of generative artificial intelligence (AI) hallucinations." Appellant moved for leave to file an amended surreply, apologizing for "significant technical inaccuracies and citation errors" attributed to a "fundamental breakdown in the appellant's citation-verification and proofreading process," but never addressed whether AI was used. The government later identified additional fictitious citations in appellant's opening brief and a January 9, 2026 vitiation brief. Appellant ultimately admitted to ten non-existing cases across three briefs (one in the opening brief, one in the vitiation brief, eight in the surreply), characterizing them as "an unintentional lapse" rather than fraud, and again declined to explain how the fictitious cites were generated. Administrative Judge Timothy P. McIlmail (joined by Acting Chairman Prouty and Vice Chairman O'Connell) denied the government's motion to dismiss the appeal with prejudice as too drastic absent a showing of contumacious conduct, but struck the December 1, 2025 surreply and denied leave to file the amended surreply, citing appellant's "lack of candor regarding how those non-existing cases found their way into its briefing" and the need to deter such conduct, "AI-related or not."
- AI tool:
- Implied (generative AI; appellant did not confirm or deny use)
What sanction did the court impose?
Government's motion to dismiss with prejudice denied. December 1, 2025 surreply stricken; motion for leave to file amended surreply denied. Opening brief left intact to avoid undue prejudice.
Why does Appeals of DSME Construction Co., Ltd. matter for law firms using AI?
DSME Construction is the rare AI-citation case that is not technically an AI-citation case: appellant’s counsel never admitted using a generative tool, instead blaming a “citation-verification and proofreading process” breakdown. The Board (an Article I administrative tribunal handling government contract disputes) treated that distinction as immaterial, sanctioning the conduct “AI-related or not” once appellant conceded ten fictitious cases across three briefs. For a managing partner, the case is a useful illustration that the duty of candor and the consequences of fabricated citations attach regardless of whether AI is invoked as the cause, and that lack of candor about how fictitious cites entered a filing can itself escalate the sanction. It also extends the pattern beyond Article III courts into administrative tribunals where a small firm might assume the stakes are lower.
Sources
Primary sources
Further reading
Source PDF is a Westlaw printout mirrored from the Damien Charlotin hallucination database. We are working to add the underlying court docket (PACER, CourtListener, or court website) as a second source.
- Appellant never expressly confirmed or denied use of generative AI in the briefs; the AI characterization is the government's, and the Board accepted it as a working frame ("AI-related or not").