Quinteros v. Harbor Distributing, LLC

What sanction did the court impose?

The trial court sanctioned LLG, Lipeles, Schelly, and Badawi jointly and severally $5,000 payable to defendants and $1,000 to the court, and ordered service of the order on the client, on the judge in the Los Angeles action, and on any San Francisco judge before whom they appear for one year. In a published opinion (Desautels, J., with Stewart, P.J., and Richman, J.), the First District affirmed. It held LLG forfeited its Code of Civil Procedure section 128.7 safe-harbor arguments and its challenge to payment to the defendants by not raising them below, and found no abuse of discretion in the sanction. It rejected LLG's argument that it could not be sanctioned because it did not itself use AI: LLG was counsel of record and, as the trial court had stated, bore "ultimate responsibility for the accuracy and reliability of the brief." It noted that the $6,000 sanction was "far less" than the $10,000 imposed in Noland, and said that LLG's citing of new authorities at oral argument, without the advance letter required by Cal. Rules of Court, rule 8.254 and First District Local Rule 16, is itself sanctionable. Respondents recover costs on appeal.

Why does Quinteros v. Harbor Distributing, LLC matter for law firms using AI?

Quinteros is a published statement that delegation is not a defense. One of LLG’s three arguments on appeal (after its lead safe-harbor argument) was that the sanctions were unfair because its own lawyers did not use AI and the contract attorney was not sanctioned. The AI use was the trial court’s finding of what Sansone “evidently” did, which he had denied under oath. The First District rejected it: in signing and filing the opposition, Badawi and LLG certified under section 128.7 that its legal contentions were warranted by existing law, “[y]et LLG admitted to the court that it either failed to read the pleading at all, in the case of Schelly and Lipeles, or failed to substantively review or cite check Sansone’s submission, in the case of Badawi.” The court quoted People v. Alvarez for the rule that “attorneys cannot delegate this responsibility to any form of technology; this is the responsibility of a competent attorney.”

The procedural holdings matter as much as the merits. LLG’s lead argument was that the trial court violated the 21-day safe harbor in section 128.7, subdivision (c)(2). The court held the argument forfeited because LLG never raised it below, noted that LLG had stipulated to the tentative ruling granting the stay, and found no reason to reach the issue as a pure question of law. The judge had raised a State Bar report at the hearing (“I see no way around that”), but the sanctions order, as the opinion describes it, contains none. The same forfeiture disposed of LLG’s challenge to the $5,000 payable to the defendants, for which Harbor had also identified an alternative basis in California Rules of Court, rule 2.30(b).

The facts give firms a concrete checklist. No lawyer at the firm formed a view on whether the stay motion merited opposition; the associate did not read the cases; Lipeles and Schelly did not read the brief; and the firm opposed a stay premised on an action it had itself filed. Firms documenting compliance may wish to consider a written review step for outsourced drafting that records who read the cited authorities and who decided the filing was warranted.