Harris v. Elementis Specialties, Inc.
U.S. District Court, Central District of California · C.D. Cal. · California bar guidance
Conduct
Here, according to plaintiff's motion as the court recounted it, and as the defendant confirmed, AI use produced a hallucinated citation and unsupported citations in a motion to dismiss.
Consequence
No sanction: the court found no bad faith but called the failure to verify inexcusable and warned the defendant and its counsel about future AI-related mistakes.
Lesson
Here the court held that an inexcusable failure to verify AI output was not bad faith, but warned it would consider the incident if similar mistakes recur.
Verified September 30, 2026
- Citation
- Harris v. Elementis Specialties, Inc., No. 5:26-cv-00171-KK-DTB, Order Denying Motion for Sanctions (C.D. Cal. Apr. 17, 2026) (Kato, J.), ECF No. 29
- Decided
- April 17, 2026
Summary
Plaintiff Robert Harris sued his employer, Elementis Specialties, Inc., in state court on state-law employment claims, and the defendant removed the case. The day after the defendant moved to dismiss, arguing preemption under the Labor Management Relations Act, the court granted Harris's unopposed motion to remand and closed the case. Harris then moved for sanctions against the defendant and its counsel under the court's inherent authority, Local Rules 11-9 and 83-7, 28 U.S.C. § 1927, or 28 U.S.C. § 1447(c). According to the court, Harris argued that the motion to dismiss cited "multiple authority defects," and "Plaintiff cites (and Defendant has confirmed) its use of AI resulted in several citation errors, including a completely hallucinated cite and other cites that do not support the proposition Defendant's claimed they did." The court also noted that defense counsel said it could not withdraw the motion to dismiss because the case was "closed" in PACER.
- AI tool:
- Unidentified AI (the order states that plaintiff cites, "and Defendant has confirmed," that "its use of AI resulted in several citation errors"; no tool is named)
- Amount or terms:
- None; plaintiff's motion for sanctions was denied (no bad faith found; removal not objectively unreasonable), and defendant and its counsel were "explicitly warned" that the court will consider the incident if similar AI-related "mistakes" recur
What did the court warn about?
In an April 17, 2026 in-chambers order, Judge Kenly Kiya Kato denied the motion. The court stated that it "agrees with Plaintiff that Defendant's failure to verify authority it cited in its filing before a federal court is inexcusable," but could not conclude that the defendant "knowingly or recklessly raise[d] a frivolous argument," treating bad faith as a common question across the inherent-authority, local-rule and § 1927 bases. It also found the preemption argument not in bad faith and the removal not objectively unreasonable under § 1447(c). In a footnote, the court wrote that "Defendant and its counsel are explicitly warned that the Court will note this incident and consider it in future litigation should Defendant or its counsel make similar 'mistakes' as a result of the unverified use of AI," and that counsel "should have and could have alerted the Court to the multiple citation misrepresentations in its Motion but failed to do so."
Why does Harris v. Elementis Specialties, Inc. matter for law firms using AI?
Harris v. Elementis arose in an unusual posture. The defendant’s motion to dismiss, which by the plaintiff’s account, confirmed by the defendant, contained a hallucinated citation and other unsupported citations resulting from AI use, was filed the day before the court remanded the case. The plaintiff then sought sanctions, and the question became whether an AI-caused citation failure amounted to bad faith.
Judge Kato held that it did not. Citing authority that ignorance, negligence or incompetence does not constitute bad faith, the court could not find that the defendant knowingly or recklessly raised a frivolous argument. The court nonetheless called the failure to verify “inexcusable,” rejected counsel’s explanation that the closed PACER case prevented a withdrawal notice, and warned that it “will note this incident and consider it in future litigation” should similar mistakes occur.
Firms documenting compliance may wish to consider that here the absence of bad faith defeated sanctions but did not prevent a warning that follows both the client and its counsel into future litigation.
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 authorities in every filing, including motions filed shortly before a case is remanded or closed. Here the court called the failure to verify authority cited to a federal court inexcusable.
- Document how the firm corrects known citation errors after a case closes. The court said counsel could still have filed a notice alerting it to the citation misrepresentations.
- Consider that a court may warn both a party and its counsel. Here the warning applies to future litigation by the defendant or its counsel.
Sources
Primary sources
- The order is internally inconsistent about who moved: its heading reads "Order DENYING Defendant's Motion for Sanctions [Dkt. 24]," and its introduction says the defendant filed the motion, but its background, analysis and conclusion state that plaintiff moved for sanctions against the defendant and its counsel. The entry follows the analysis.
- The citations at issue are not identified in the order, and neither the motion to dismiss nor the sanctions briefing was read; the description of the errors is the court's summary of plaintiff's motion and defendant's confirmation.
- Defense counsel is not named in the order.