Lee v. Capital One Bank (USA), N.A.
U.S. District Court, District of Utah · D. Utah · Utah bar guidance
Conduct
Pro se plaintiff in FDCPA/FCRA action filed an Opposition the defense flagged as containing inaccurate or hallucinated AI content.
Consequence
R&R recommending dismissal of ABC Legal. Court adopted Seventh Circuit pro-se AI admonition; no formal sanction; Rule 11 warning issued.
Lesson
Defense need not prove every hallucination; flagging the pattern can prompt chambers to admonish the pro se filer under Rule 11.
Verified May 14, 2026
- Citation
- Lee v. Capital One Bank (USA), N.A., No. 2:25-cv-00540-TC-DBP, 2026 WL 690784 (D. Utah Feb. 24, 2026) (Pead, Mag. J.) (R&R)
- Decided
- February 24, 2026
Summary
Pro se plaintiff Ryan Lee filed an action in the District of Utah against Capital One Bank (USA), N.A.; Johnson Mark, LLC; and ABC Legal Services, asserting Fair Debt Collection Practices Act, Fair Credit Reporting Act, tortious-interference, and invasion-of-privacy claims arising out of allegedly improper service in a state-court collection action. ABC Legal moved to dismiss under Rules 12(b)(5) and 12(b)(6), noting in its briefing that Lee's Opposition appeared to rely on generative AI and asking the court to "disregard any AI-generated portions of Plaintiff's opposition to the extent they are inaccurate or hallucinated." Magistrate Judge Dustin B. Pead issued a Report and Recommendation on February 24, 2026 recommending dismissal as to ABC Legal under Rule 12(b)(6).
- AI tool:
- Generative AI generally; specific tool not named in the order
What sanction did the court impose?
R&R recommended ABC Legal's motion be granted and the action dismissed as to ABC Legal. The court declined ABC Legal's invitation to selectively disregard AI-generated portions of the Opposition, instead adopting a Seventh Circuit pro-se AI admonition: "As pro se litigants employ AI to assist with court filings, a basic reminder seems wise. Accuracy and honesty matter." The court warned Mr. Lee to "take greater care to avoid misrepresentations in his filings or face possible sanctions" and surveyed prior intra-Circuit AI sanctions, citing Lexos Media IP, LLC v. Overstock.com, Inc. as a prior example of attorney AI fines and noting that another court in this Circuit held Rule 11 applies to AI use. On March 11, 2026, District Judge Tena Campbell entered judgment dismissing all defendants (with prejudice as to Capital One and ABC Legal; without prejudice as to Johnson Mark for insufficient service).
Why does Lee v. Capital One Bank (USA), N.A. matter for law firms using AI?
Lee v. Capital One Bank is the first of two Magistrate Judge Dustin B. Pead Reports and Recommendations within a three-week span addressing pro se litigant generative AI use; Vernieri v. Dyno Nobel Americas (Mar. 4, 2026) is the companion. Lee’s procedural shape is more rhetorically substantial than Vernieri’s footnote 31. After resolving ABC Legal’s Rule 12(b)(5) and 12(b)(6) arguments on the merits, the court reaches the AI question in a closing section explicitly framed as the court’s “concern with the use of artificial intelligence (AI) in this case.” Three moves merit attention. First, the court rejects ABC Legal’s specific invitation to “disregard any AI-generated portions” of the Opposition, signaling that targeted excision of AI content is not the operative remedy in this district. Second, the court canvasses the existing intra-Circuit and out-of-Circuit AI-sanctions caselaw, naming Lexos Media IP, LLC v. Overstock.com, Inc. as a prior in-Circuit example of attorneys being fined for AI-generated defective citations. Third, and most consequentially for partners briefing in this district, the court adopts the Seventh Circuit’s pro-se AI admonition verbatim: “As pro se litigants employ AI to assist with court filings, a basic reminder seems wise. Accuracy and honesty matter.” The court reminds Lee that Rule 11(b)(2) and (3) apply to “all litigants represented and unrepresented” and warns him to “take greater care to avoid misrepresentations in his filings or face possible sanctions.” District Judge Tena Campbell’s March 11, 2026 judgment closed the case. Cross-reference: Vernieri v. Dyno Nobel Ams. (D. Utah Mar. 4, 2026) (Pead, Mag. J.) (companion Pead chambers AI warning, structured as footnote 31 of an R&R on personal jurisdiction).
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.
- Adopt the Seventh Circuit pro-se AI formulation when responding to opposing AI-assisted filings: 'Accuracy and honesty matter' is the language D. Utah chambers now adopt verbatim, and citing it can save your reply brief from becoming the AI exhibit itself.
- Note the chambers move: when defense asks the court to 'disregard AI-generated portions,' the court here declined to surgically excise content and instead admonished the litigant generally; consider whether your relief request is one a court can grant cleanly.
- Track the Pead chambers cluster: Lee (Feb. 24) and Vernieri v. Dyno Nobel (Mar. 4) within three weeks set a consistent local pattern of footnote/closing-section warnings short of immediate sanction.