In re: Telexfree Securities Litigation
U.S. District Court, District of Massachusetts · D. Mass. · Massachusetts bar guidance
Verified April 26, 2026
- Citation
- In re Telexfree Sec. Litig., MDL No. 4:14-md-2566-NMG, 2026 WL 412550 (D. Mass. Feb. 13, 2026)
- Decided
- February 13, 2026
Summary
Senior Judge Nathaniel M. Gorton denied the Sparman defendants' motion for attorneys' fees against plaintiff Rita Dos Santos but flagged that most citations in plaintiff's counsel's pleadings were erroneous. The order identified misquotations of Jensen v. Phillips Screw Co., 546 F.3d 59 (1st Cir. 2008) and CQ Int'l Co. v. Rochem Int'l, Inc., 659 F.3d 53 (1st Cir. 2011), misquotations of inapposite cases (Rivera v. Centro Medico de Turabo; Gagliardi v. Sullivan), and at least one fully fabricated citation (Raymond v. U.S., 207 F.3d 1020 (9th Cir. 2000)). The court found these errors bore the "clear hallmark of artificial intelligence hallucinations" and noted it was not the first such instance from Attorney Passatempo.
- AI tool:
- Unspecified generative AI
What sanction did the court impose?
No monetary sanction imposed in this order. Plaintiff's counsel was ordered to appear at a February 19, 2026 status conference and show cause why the court should not impose sanctions and/or refer the matter to the Massachusetts Board of Bar Overseers.
Why does In re: Telexfree Securities Litigation matter for law firms using AI?
The Telexfree order is notable because the court declined to award fees on the underlying Rule 11 theory yet still issued a show-cause order on the AI hallucinations the briefing surfaced. For managing partners, it illustrates that hallucinated citations create independent disciplinary exposure separate from whether the underlying claim has merit, and that a Massachusetts federal judge has now signaled willingness to refer such conduct to the Board of Bar Overseers.
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.