Hydroxie LLC v. Flame USA Inc
U.S. District Court, Central District of California · C.D. Cal. · California bar guidance
Conduct
Here plaintiff's opposition cited a Westlaw order the court could not locate; the order it found under that name did not appear to address the Rule 8 point.
Consequence
No sanction. The court admonished plaintiff that future citations to authority that do not appear to exist will lead to an order to show cause re sanctions.
Lesson
Here the court tied a citation it could not find to its standing order on AI disclosure, without finding that AI was used.
Verified September 30, 2026
- Citation
- Hydroxie LLC v. Flame USA Inc., No. 2:25-cv-09985-AH-(SSCx), Order Granting Motion to Dismiss (C.D. Cal. Apr. 10, 2026) (Hwang, J.), ECF No. 63
- Decided
- April 10, 2026
Summary
Hydroxie LLC, a dietary-supplement company, sued Flame USA Inc. and others alleging counterfeiting of its marks and trade dress. Defendant LA New Age Dist, Inc. moved to dismiss the first amended complaint. In its opposition, plaintiff cited "Leftenant v. Blackmon, 2020 WL 4334779 (D. Nev. July 29, 2020)" for the proposition that "the court found allegations that defendants used a plaintiff's mark sufficient to state counterfeiting claims without requiring detailed role differentiation among multiple defendants." In a footnote to its April 10, 2026 order, the court stated: "The Court was unable to locate an order with this citation." It located a different order under the same case name and date, 2020 WL 13584196, which addressed Lanham Act allegations against multiple defendants, but noted that "the movant there did not appear to challenge the pleading on Rule 8 pleading grounds."
- AI tool:
- Not determined (the court wrote "[t]o the extent that Plaintiff has relied on artificial intelligence"; it made no finding that AI was used and named no tool)
- Amount or terms:
- None; plaintiff was admonished that future citations to authority that do not appear to exist will result in an order to show cause re sanctions
What did the court warn about?
Judge Anne Hwang granted the motion to dismiss with leave to amend within fourteen days, finding that the complaint did not satisfy Rule 8's notice requirement. In the same footnote, the court wrote: "To the extent that Plaintiff has relied on artificial intelligence, Plaintiff has not complied with this Court's Standing Order, which requires a party who uses artificial intelligence to generate any portion of a brief to attach a separate declaration disclosing the use of artificial intelligence and certifying that the filer has reviewed the source material and verified the content is accurate and complies with the filer's Rule 11 obligations." It concluded: "Plaintiff is admonished that any future citations to authority that do not appear to exist will result in the Court setting an order to show cause re why sanctions should not be imposed." No sanction was imposed.
Why does Hydroxie LLC v. Flame USA Inc matter for law firms using AI?
Hydroxie is a trademark-counterfeiting case in which the citation problem appears in a footnote to a Rule 8 dismissal. Plaintiff cited a District of Nevada order by Westlaw number for a proposition about pleading claims against multiple defendants. The court could not find an order at that citation; the order it found under the same case name and date addressed Lanham Act allegations, but the movant there did not appear to challenge the pleading on Rule 8 grounds.
The court did not decide whether AI was involved. It wrote that “[t]o the extent” plaintiff relied on artificial intelligence, it had not complied with the judge’s standing order, which at the time required a separate declaration disclosing AI use and certifying verification. It then admonished plaintiff that further citations to authority that does not appear to exist would lead to an order to show cause.
Firms documenting compliance may wish to consider that here a single unlocatable citation was enough for the court to invoke its AI standing order and set out the next step if it recurred.
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 every Westlaw citation against the order it identifies. Here the court could not locate the cited order, and said the movant in a different order under the same name did not appear to raise the Rule 8 point.
- Review each judge's standing order on AI use before filing. The court noted that, if AI was used, plaintiff had not filed the disclosure declaration the standing order required.
- Document AI-use disclosures where a standing order requires them. The court's admonishment set an order to show cause as the consequence for any repeat.
Sources
Primary sources
- AI use is not established: the court addressed it conditionally ('To the extent that Plaintiff has relied on artificial intelligence') and made no finding.
- The standing order the court cites ("Standing Order, Dkt. No. 11, at 7") was not read; the linked court-order entry records that Judge Hwang's September 2025 standing order required an AI-disclosure declaration and that a September 25, 2026 reissue removed that requirement.
- Plaintiff's counsel is not named in the order. The same-day in-chambers minutes (ECF No. 64) were not read.