Owens v. Select Portfolio Servicing, Inc.

What did the court warn about?

Judge Ann M. Donnelly granted the motion to dismiss in part and denied it in part: Counts I, II, III, IV, VI and VII were dismissed, and Count V (the FDCPA Section 1692f claim for collection of prohibited fees) may proceed. Among other rulings, Count I (the RESPA claim over the servicer's response to the plaintiff's information request) was dismissed because the plaintiff had not adequately alleged actual damages. The citation problems are addressed only in the order's conclusion, after the count-by-count rulings, and none of the rulings is tied to them. No sanction was imposed for the citations. The court warned: "The plaintiff is warned that he must exercise caution in relying on AI software to draft court filings or to conduct legal research. The Court will impose sanctions for any further violations, including summary dismissal of his claims." The order makes no finding that AI was in fact used, does not require corrected filings, and makes no referral.

Why does Owens v. Select Portfolio Servicing, Inc. matter for law firms using AI?

Owens v. Select Portfolio Servicing shows a court drawing an AI inference from the citation errors themselves. The defendant’s reply identified at least four cases in the plaintiff’s papers that did not contain the language quoted or did not support the propositions for which they were cited, and two citations that were not to decisions at all. Judge Donnelly adopted that showing in the conclusion of her decision on the motion to dismiss and reasoned from it: “These citation issues suggest that the plaintiff is relying on artificial intelligence (“AI”) to conduct legal research or draft legal filings, without confirming the accuracy of AI-generated material.” The inference is stated as a suggestion; the order makes no finding that AI was used and records no response from the plaintiff’s side.

The court framed the problem under Rule 11(b): legal contentions must be “warranted by existing law,” and “[t]he use of fake or misleading citations violates this rule and wastes the opposing party’s and the Court’s time by requiring them to parse through the citations to determine which points of law, if any, are accurate.” It imposed nothing for this round. Instead it warned that “[t]he Court will impose sanctions for any further violations, including summary dismissal of his claims.”

The warning is addressed to “the plaintiff,” although the docket’s parties listing shows counsel of record for him and the order does not describe him as pro se, and the sanction it names for a repeat is dismissal of his claims. Part of the case survived the motion (the FDCPA Section 1692f claim), so the warning carries forward into the remaining litigation. Firms documenting compliance may wish to consider that a court’s response to citation errors can be framed around the client’s case as well as counsel’s conduct.