In re Jackson Hospital & Clinic, Inc.
U.S. Bankruptcy Court, Middle District of Alabama · Bankr. M.D. Ala. · Alabama bar guidance
Verified May 5, 2026
- Citation
- In re Jackson Hospital & Clinic, Inc., No. 25-30256-CLH, Doc. 1182 (Bankr. M.D. Ala. Nov. 20, 2025)
- Decided
- November 20, 2025
Summary
Attorney Cassie D. Preston of Gordon Rees Scully Mansukhani, LLP, representing creditor Progressive Perfusion, Inc., filed a Motion to Reconsider, Supplemental Brief, and Joint Response containing pervasive fabricated case citations, fabricated quotations, and misstatements of existing case law. When asked directly by Judge Christopher L. Hawkins on August 26, 2025, whether generative AI was used in preparing the Motion to Reconsider, Preston falsely answered "No, sir," a representation she later admitted was knowingly false. Preston conceded she lacked bankruptcy experience and did not consult the Firm's bankruptcy group despite handling a complex Chapter 11 matter.
- AI tool:
- Unspecified generative AI
What sanction did the court impose?
Public reprimand of Cassie D. Preston; revocation of her pro hac vice admission; order to serve the opinion on her clients, opposing counsel, and presiding judges in every pending case in which she is counsel of record; referral to the Alabama and Georgia State Bars. The Firm separately paid $55,721.20 in attorneys' fees to the DIP Lender and Debtors to resolve related sanctions motions, and was directed (but not sanctioned) to distribute the opinion plus its AI and cite-checking policies to every attorney in the Firm.
Why does In re Jackson Hospital & Clinic, Inc. matter for law firms using AI?
Jackson Hospital is notable for combining a candor-to-the-tribunal violation with the underlying AI hallucination problem: Preston denied AI use under direct questioning after being reminded of Alabama Rule 3.3, then doubled down with a Supplemental Brief recycling a fabricated quote attributed to a different case. Judge Hawkins’s opinion is a useful reference for managing partners because it credits the firm’s pre-existing AI policy (June 2023), updated policy (July 2025), and post-incident cite-checking policy as sufficient to avoid firm-level sanctions, while still imposing a mandatory firm-wide acknowledgment requirement under Section 105(a). The case illustrates that a documented, acknowledged AI policy is the difference between a sanctioned firm and a directed one.
Sources
Primary sources
Further reading
Source PDF is a Westlaw printout mirrored from the Damien Charlotin hallucination database. We are working to add the underlying court docket (PACER, CourtListener, or court website) as a second source.