McCarthy v. United States Drug Enforcement Administration
U.S. Court of Appeals for the Third Circuit · 3d Cir. · Delaware bar guidance , New Jersey bar guidance , Pennsylvania bar guidance
Verified April 26, 2026
- Citation
- McCarthy v. U.S. Drug Enforcement Admin., No. 24-2704 (3d Cir. Mar. 27, 2026) (precedential); OSC issued at id. (3d Cir. July 21, 2025)
- Decided
- March 27, 2026
Summary
Attorney Daniel A. Pallen, a member of the Third Circuit and Pennsylvania bars, filed an Opening Brief in his client's petition for review of a DEA order that included summaries of eight DEA adjudications drawn from AI-generated case overviews provided to him by a non-attorney. Seven summaries contained factual and legal inaccuracies and one adjudication did not exist at all. Even after the Government catalogued the errors in its Response Brief, Pallen filed a Reply Brief calling the problems "immaterial misstatements" about "tangential details" without ever reading the underlying authorities. On July 21, 2025 the panel (Judges Phipps, Chung, and Roth, with Chung writing) issued an Order to Show Cause on a 10-day clock directing Pallen to address three specific issues: representing the Opening Brief was a good-faith effort while never reading the cited decisions, minimizing the inaccuracies as tangential, and failing to disclose that one cited case did not exist. After briefing, the panel found a violation of Pa. R.P.C. 1.1 (competence) and Third Circuit Disciplinary Rule 2.1(d), declining on a divided vote to reach Pa. R.P.C. 3.3(a)(1) (candor).
- AI tool:
- Unspecified generative AI
What sanction did the court impose?
Public reprimand issued in a precedential opinion on March 27, 2026. Pursuant to Circuit Disciplinary Rule 12, the Clerk was directed to notify all other courts before which Pallen is admitted and the National Disciplinary Data Bank, and to provide each with a copy of the opinion. The court declined to impose monetary sanctions only because this was the Third Circuit's first precedential opinion on AI misuse and because Pallen had not been given notice that Rule 1.1 was at issue, and warned that those mitigating factors will not apply in future cases. Judge Roth concurred in the reprimand but would have found Rule 3.3(a)(1) violations and imposed harsher sanctions.
Why does McCarthy v. United States Drug Enforcement Administration matter for law firms using AI?
McCarthy is the first precedential federal court of appeals opinion to discipline a lawyer for AI-driven citation failures, and the Third Circuit’s choice to notify both sister courts and the National Disciplinary Data Bank elevates a single appeal into a permanent national disciplinary record that follows the attorney across every bar in which he practices. For managing partners, the case is a marker that AI-hallucination misconduct has graduated from district-court fee awards into the formal interjurisdictional discipline system, and that the courts’ patience for the “no prior guidance” defense is now closed: the Third Circuit explicitly stated that future violators will not receive the same mitigation. The procedural arc, from the July 2025 Order to Show Cause through the March 2026 precedential reprimand, also illustrates how a single ill-judged Reply Brief minimizing AI-generated errors as “immaterial” can transform a citation problem into a candor inquiry.
Sources
Primary sources
Further reading
- https://reason.com/volokh/2025/07/22/hallucinations-and-alleged-lack-of-candor-about-them-in-federal-appellate-briefing/
- Justia (legal aggregator)
- Document mirror (Damien Charlotin hallucination database, Westlaw printout)
- Document mirror (Damien Charlotin hallucination database, Westlaw printout)
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.