P-Three Development, LLC v. Therm Flo, Inc.

What sanction did the court impose?

In a Rule 23 order, the First District struck Kadiyala's brief and dismissed the appeal in the exercise of its discretion under Illinois Supreme Court Rule 341. The order does not describe the strike and dismissal as a sanction, and it does not rule on the defendants' request for Rule 375 sanctions or impose any monetary penalty. The court explained that it ordinarily proceeds to the merits where noncompliance has not substantially hindered review, but that here Kadiyala "cites to authority, much of it fictitious, and still more of it immaterial." It stated that "[e]ven accepting that Kadiyala's several and repeated missteps were unintentional, we find the violations too egregious to overlook," and described his conduct in the appellate court and over the long course of the trial court proceedings as "a clear abuse of the judicial system." Noting that Kadiyala had not acknowledged using AI, the court said features of the brief gave it reason to believe he may have relied on generative AI, and it repeated the Fourth District's admonishment from In re Baby Boy quoting the Illinois Supreme Court's AI policy.

Why does P-Three Development, LLC v. Therm Flo, Inc. matter for law firms using AI?

P-Three shows an Illinois appellate panel ending an appeal under its briefing rule rather than through a sanctions ruling: the court struck the brief and dismissed the appeal under Rule 341 and did not rule on the defendants’ request for Rule 375 sanctions. It catalogued each defect. For “Greer,” it said “[d]espite our best efforts, we are unable to locate Greer as cited by Kadiyala”; it called “S.I.T.E.” “another fictitious case,” the St. James Dormitory citation “yet another fictitious case,” and the 2018 Ortega citation “also fictitious.” It then found invented quotations attributed to real supreme court and appellate decisions on subjects those cases never address, and a misquotation of the very statute on which the intervention request rested. It declined the usual course of reaching the merits despite briefing defects, reasoning that the problem here was not missing authority but authority “much of it fictitious, and still more of it immaterial.” In discussing the standard of review, the court also observed that “Kadiyala’s claims that the court either misconstrued or misapplied the statute is belied by the record.”

On AI, the court was careful about what it found. Kadiyala did not admit using AI. The court said only that “certain features in Kadiyala’s brief, particularly citation to fictitious cases and irrelevant principles of law and misquoted text and quotations, give us reason to believe that he too may have relied on drafting tools, such as generative AI, that ultimately produced a non-compliant brief.” It then joined the Fourth District’s admonishment in In re Baby Boy, which quotes the Illinois Supreme Court’s AI policy that “[a]ll users must thoroughly review AI-generated content before submitting it in any court proceeding to ensure accuracy and compliance with legal and ethical obligations.”

The order also restates a standard the court applies to every filer: “This court has a reasonable expectation that every litigant, pro se or otherwise, exercises due diligence in reviewing their briefs before submitting them to ensure that the arguments asserted therein have merit and the accompanying citations are accurate and reliable.” Firms documenting compliance may wish to consider that the consequence here fell on the appeal itself, which ended without review of the merits.