Grajales v. Santander Consumer USA Inc.
U.S. District Court, Middle District of North Carolina · M.D.N.C. · North Carolina bar guidance
Conduct
A pro se plaintiff filed voluminous papers with false citations, including dozens of cases defendants said did not exist, and kept citing false authorities after being told.
Consequence
$120 penalty, case stayed until paid, copies of all cited law required with future pleadings, and a warning that a prefiling injunction will follow further frivolous filings.
Lesson
Here the court treated false citations as one of three grounds for sanction, and required the litigant to attach every authority he cites going forward.
Verified September 29, 2026
- Citation
- Grajales v. Santander Consumer USA Inc., No. 1:25-cv-877, Order (M.D.N.C. June 2, 2026), ECF No. 241
- Decided
- June 2, 2026
Summary
Anthony Josue Grajales, representing himself, sued Santander Consumer USA Inc. and seventeen other defendants, including banks, securitization trusts, credit bureaus, rating agencies, and an insurer. On March 24, 2026, the court ordered him to show cause why he should not be sanctioned "for his frivolous abuse of the litigative process," and it held a hearing on May 29, 2026. The court found that his 22-page, single-spaced show-cause response far exceeded the Local Rule 7.3(d)(1) word limit, that he had kept filing improper motions after warnings from the Magistrate Judge, and that at the hearing he falsely represented that he had withdrawn an unauthorized second complaint that had in fact been struck. On citations, the order states that "it appears Plaintiff has also been using some form of generative artificial intelligence resulting in citations which are hallucinations or other improper citations." It recounts defendants' count of "one hundred fifteen false citations" in one of his responses, including twenty-nine cases that "do not exist as cited," and defendants' showing that after they identified eight false citations in his Final Amended Complaint, he cited sixteen more cases that did not exist or did not support what he cited them for.
- AI tool:
- Suspected generative AI, tool not named (the court: "it appears Plaintiff has also been using some form of generative artificial intelligence resulting in citations which are hallucinations or other improper citations")
- Sanction amount:
- $120 penalty to the Clerk; case stayed 90 days or until paid; plaintiff must attach copies of all cited law to future pleadings or they will be struck
What sanction did the court impose?
The court imposed sanctions for three things: repeated failure to follow the Local Rules, excessive pleadings despite multiple warnings, and false citations. The plaintiff must pay a $120.00 penalty to the Clerk; the case is stayed for 90 days or until he pays, and if he does not pay within 90 days the court will consider further sanctions, including dismissal of the complaint. He may keep filing electronically and citing cases, but must attach copies of any cases, statutes, or other law he cites, and a pleading without them will be struck. Defendants need not respond to his pleadings until the court directs. The court found it had grounds for a prefiling injunction, citing his "filing of false citations" among other things, but declined to impose one because its earlier warnings had not specifically mentioned that remedy. It warned that any further frivolous filings will result in a prefiling injunction limited to this case. The court declined to award defendants attorneys' fees as more than necessary to deter, given the stage of the case and his pro se status.
Why does Grajales v. Santander Consumer USA Inc. matter for law firms using AI?
The Grajales order is primarily about litigation conduct by a self-represented plaintiff: oversized briefs, repeated improper motions, and a misstatement at the hearing about a withdrawn complaint. False citations are one of three stated grounds for the sanction, and the order’s treatment of AI is hedged. It says only that “it appears” the plaintiff has been using generative AI, and it quotes Simpson v. Portfolio Recovery Associates for the point that a false submission is unacceptable “[w]hether created by generative artificial intelligence or not.”
The citations figure chiefly in the court’s analysis of a prefiling injunction under Cromer v. Kraft Foods. On the third Cromer factor, the court found that defendants were burdened not only by the volume of filings but also because they must now “wade through misleading material,” quoting Simpson. On the fourth, it found that alternative sanctions would not deter him, because after defendants identified eight false citations he cited sixteen more problem cases. The court nevertheless held back the injunction because it must first give notice and an opportunity to be heard, and its earlier warnings had not mentioned that remedy.
The monetary penalty was set at $120.00, and the court declined to shift defendants’ fees, reasoning that a fee award would be more than necessary to deter at this stage and given his pro se status. Firms documenting compliance may wish to consider that, in this case, the practical remedy for opposing counsel was procedural: every future citation must arrive with a copy of the authority, and defendants need not respond until the court says so.
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 the false citations in an opponent's filings with specifics. The court relied on defendants' compiled list and their showing that new false citations followed the first ones they identified.
- Consider requesting tailored relief against a litigant who repeatedly miscites. The court here ordered copies of all cited law attached to future pleadings and relieved defendants of responding until directed.
- Review the notice requirements for escalating remedies. The court declined a prefiling injunction because its earlier warnings had not mentioned one, and then gave that warning expressly.
Sources
Primary sources
- AI use is not a finding. The order says only that "it appears" the plaintiff has been using some form of generative AI; he did not admit it in anything the order quotes, and no tool is named. The Charlotin tracker codes the attribution as implied.
- The counts of false citations (115 in one response; 16 more after eight were flagged) are defendants' figures as recounted in the order, not the court's own tally.