Hippe v. Retention Brands, LLC

How did the court address the AI-related conduct?

Counsel responded on July 14, 2026. In a July 15, 2026 order, Judge Adelman noted that counsel "did not specifically address whether the deficient citations were caused by Artificial Intelligence use" but said he "utilized legal research and drafting tools to assist in the drafting process," which resulted in unverified citations. The court found the explanation "thorough, honest, and reasonable," credited representations that counsel and his firm had taken steps to prevent a recurrence, and observed that "while the citations were inaccurate, the legal premises of the citations were not." Plaintiff had withdrawn any request for attorneys' fees and costs; the court wrote, "I agree that this is punishment enough and will not further sanction counsel," citing Dec v. Mullin, 171 F.4th 940 (7th Cir. 2026). It ordered that plaintiff will not be awarded attorneys' costs and fees, that "No further sanctions will be imposed," and that judgment be entered.

Why does Hippe v. Retention Brands, LLC matter for law firms using AI?

The two Hippe orders show a court moving from suspicion to leniency on the strength of counsel’s response. In the June 23 order, Judge Adelman described the problem bluntly: citations in two paragraphs were “entirely fabricated, nonexistent, and bogus,” at least two more were “entirely irrelevant,” and the motion bore “additional AI fingerprints.” He framed the choice as “[a]t best, this work is sloppy. At worst, it is willfully dishonest,” and directed counsel to explain the source of the inaccuracies, “including whether AI was used,” and why he should nonetheless be awarded fees. He deliberately left the fabricated citations out of the order so they would not enter “a published record which could be cited in the future.”

The July 15 order resolved the matter without further sanction. Counsel did not say whether AI was the cause, describing instead “legal research and drafting tools,” but the court found his explanation “thorough, honest, and reasonable” and credited counsel’s representation that he and his firm had taken steps, while observing that personal verification of every authority “should have always been standard procedure rather than a new policy now implemented.” Because plaintiff had withdrawn its fee request, the court concluded that was “punishment enough,” citing the Seventh Circuit’s decision in Dec v. Mullin.

The matter did not end there for counsel. In Cole v. Hobby Town Unlimited, the Central District of Illinois later identified plaintiff’s counsel here as David Baldemar Reyes, described the Hippe motion as nearly identical to one he filed in Cole “down to the hallucinations,” and, weighing his filings in that case, Hippe, and a Northern District of Illinois matter, fined him $1,000 under Rule 11. Firms documenting compliance may wish to consider that a lenient disposition in one court can become part of the record another court reviews.