Fleck v. Del-One Federal Credit Union

What sanction did the court impose?

Motion to dismiss granted in part and denied in part. Section 1708 and constitutional claims dismissed with prejudice as legally barred. RICO and FCRA claims dismissed with leave to amend by April 30, 2026, subject to a 20-page cap and explicit warning that "any further hallucinated legal citations will expose Fleck to sanctions." The court reminded Fleck that Rule 11 requires self-represented parties to "read, and thereby confirm the existence and validity of, the legal authorities on which they rely." No monetary sanction imposed at this stage; warning issued.

Why does Fleck v. Del-One Federal Credit Union matter for law firms using AI?

Fleck v. Del-One is a useful D. Or. magistrate-level companion to the small but growing line of cases where the plaintiff’s own description of how documents were prepared becomes the AI-use finding. Fleck disclosed in his complaint that he relied on his company’s AI systems to prepare and format his filing. Magistrate Judge Beckerman read that disclosure forward into the response brief, where the cited “FutureGrowth Corp. v. SEC” hallucination did not exist on Westlaw and the only Westlaw source for the attributed quote was Fleck’s brief itself. The opinion situates Fleck within a broader 2026 pattern: it cites Whiting v. City of Athens (6th Cir.) for the rule that “inventing case law is a misrepresentation of law,” Doiban v. Oregon Liquor & Cannabis Commission (Or. Ct. App.) for the $10,000 sanction recently imposed on counsel who relied on AI search engines, and Park v. Kim (2d Cir.) for the underlying Rule 11 reading-and-verification duty.

For firms practicing in D. Or., the takeaway is that magistrate judges now have a settled framing they apply to first-time hallucination conduct: warn explicitly, allow amendment, but cap pleading length and reserve sanctions for repeat or post-warning conduct. The 20-page cap on Fleck’s amended complaint, the explicit ban on amending the dismissed claims, and the standing warning that “any further hallucinated legal citations will expose Fleck to sanctions” are a template a firm can expect to see applied to similarly situated parties going forward. Note also that the court took judicial notice of state court records to short-circuit Fleck’s factual narrative, which is a useful defense reminder: when a pro se plaintiff’s complaint conflicts with publicly filed state-court records the defendant has invoked, judicial-notice motions can resolve the conflict without discovery.