Parvaz v. KNJ Realty, Inc.

What did the court warn about?

Justice Peter P. Sweeney elected "to issue a stern reprimand for plaintiff's use of hallucinated citations" and, "[i]n lieu of sanctions," directed counsel to file within seven days a written, verified statement under penalty of perjury confirming, among other things, that counsel would not use AI tools or automated citation generators to generate citations unless each citation is independently verified, and understood that any future inaccurate or unverified citations "may result in the imposition of sanctions without further warning." The Amended Decision and Order of September 17, 2026 replaced and vacated the September 9, 2026 Decision and Order; its AI section is unchanged. On the motions, the court denied the motion to dismiss without prejudice, denied the plaintiffs' motions for injunctive relief, reargument and contempt without prejudice, and denied the service extension as academic because service was timely. Counsel's verified statement, signed by Sadaf Saddique, was filed September 17, 2026.

Why does Parvaz v. KNJ Realty, Inc. matter for law firms using AI?

Parvaz is a Kings County dispute over commercial premises in which the AI issue was one part of a decision resolving five motions. The defendant pointed out that the plaintiffs’ most recent emergency order to show cause contained citations it suspected were hallucinated. The court set out the factors it weighed, drawn from the Third Department’s decision in Deutsche Bank National Trust Co. v. LeTennier: the filing was prepared in one day under a service deadline, it was the first instance found, the filer was candid when asked about AI and appeared to express remorse, the roughly seven citations had no effect on the disposition, no non-existent quotations were used, and the filer did not appear to persist in using hallucinated citations.

On those facts the court chose a stern reprimand and, in lieu of sanctions, a verified statement under penalty of perjury. The statement had to confirm that counsel would personally verify every citation in an official source before filing, would not use AI tools or citation generators to produce authorities without independently verifying each one, and understood that future inaccurate citations could draw sanctions without further warning. Counsel filed the statement the same day as the amended order.

Firms documenting compliance may wish to consider that here the court’s remedy took the form of a sworn undertaking about future practice, and that the court’s list of mitigating factors included the filer’s candor when asked directly about AI use.