Parker v. Costco Wholesale Corp.
U.S. District Court, Western District of Washington · W.D. Wash. · Washington bar guidance
Verified April 26, 2026
- Citation
- Parker v. Costco Wholesale Corp., No. 2:25-cv-00519-SKV (W.D. Wash. Nov. 7, 2025) (order imposing sanctions)
- Decided
- November 7, 2025
Summary
Plaintiff's counsel Oscar E. Desper III submitted three filings, including a summary judgment response, a motion to strike, and an associated reply, that contained hallucinated case quotations, miscited authority, and misrepresented record evidence. Quoted language attributed to Meissner v. Simpson Timber Co., 69 Wn.2d 949 (1966), and to "Blaise v. Underwood" (a near-miss for the actual Balise v. Underwood, 381 P.2d 966 (1963)) could not be located in either case. Desper admitted that a contract attorney had used Callidus AI, "a specialized legal 'AI'" tool, to draft the MSJ Response without his knowledge. Magistrate Judge S. Kate Vaughan found the conduct tantamount to bad faith under Rule 11 and the court's inherent powers.
- AI tool:
- Callidus AI
- Sanction amount:
- $6,200 (approx.)
What sanction did the court impose?
Public reprimand; $3,000 monetary sanction payable to the court within 14 days; order to compensate Costco for fees incurred preparing its response to the frivolous motion to strike (parties to meet and confer, with Volokh reporting roughly $3,200 in defense costs for a total around $6,200); referral to the Chief Judge for an ethical inquiry and possible further discipline; and directive to provide the order to the client.
Why does Parker v. Costco Wholesale Corp. matter for law firms using AI?
Parker v. Costco illustrates the non-delegable nature of an attorney’s Rule 11 duty when generative AI enters the drafting workflow through a contract attorney or other staff. Judge Vaughan’s order is notable for treating hallucinated quotations from real cases (rather than wholly fabricated cases) as equally sanctionable, observing that misconduct “is not made lesser by serendipitous technological advance.” Firms relying on outside contract attorneys or specialty legal-AI tools should treat the case as a reminder that the signing lawyer remains responsible for verifying every quotation and citation, regardless of who, or what, drafted the brief.