Progressive Northern Insurance Company v. Tony Pete Flores, et al.

What did the court warn about?

The court acknowledged Defendants' representations that they had implemented corrective measures and said it "expects strict compliance with those procedures." It stated: "This Order serves as Defendants' first and final warning. Any future submission containing fabricated or inaccurate citations, or any other AI-generated content that has not been adequately verified may result in sanctions, including referral for disciplinary proceedings." It found "that an award of fees is warranted" but denied Plaintiff's fee request because Plaintiff did not specify the authority for it or argue, or show compliance with, Rule 11. The motion to strike was denied as moot because the challenged motions had been withdrawn, and the June 23, 2026 hearing was vacated. On July 13, 2026 the court issued a further order (ECF No. 126) repeating the warning and the fee ruling and also declining Plaintiff's request to bar Defendants from filing "similar motions," relying on Defendants' stipulation not to refile the sanctions motions. Objections to a magistrate judge's ruling were filed on June 26 (ECF No. 124) and July 27, 2026 (ECF No. 135); their contents were not available.

Why does Progressive Northern Insurance Company v. Tony Pete Flores, et al. matter for law firms using AI?

The order is short, but it separates two questions that often run together. On the conduct, the court did not treat the withdrawal of the challenged motions as the end of the matter. It said it “nonetheless finds it necessary to address the conduct that gave rise to Plaintiff’s motion,” characterized counsel’s submission of unverified AI-generated content as “a serious breach of several Model Rules of Professional Conduct (competence, diligence, candor, misconduct),” and issued Defendants a “first and final warning” that future unverified AI content “may result in sanctions, including referral for disciplinary proceedings.” It also rejected, in a footnote, the suggestion that a phone call to Plaintiff would have sufficed.

On the remedy, the court was exacting about procedure. It found “that an award of fees is warranted” but denied the request because Plaintiff’s motion did not say whether it rested on Rule 11, 28 U.S.C. 1927 or the court’s inherent power, relied instead on another District of Nevada decision in which fees had been imposed under Rule 11, and neither argued Rule 11 nor showed compliance with its requirements. The later July 13 order kept that result and declined Plaintiff’s broader request to bar Defendants from filing “similar motions,” reasoning that the request was undefined, that Defendants had stipulated not to refile the withdrawn sanctions motions, and that Plaintiff had not shown why barring any reference to the deposition would be tailored to preventing repeated improper AI use.

Firms documenting compliance may wish to consider both sides of this record. For the filer, a withdrawn motion can still produce a written warning on the docket. For the party that catches the errors, the court’s ruling turned on identifying the legal authority for fees, not on whether the errors occurred. The docket also shows objections to a magistrate judge’s ruling filed after each order, which were not available to read; the entry does not say what they challenge.