Reaves Law Firm, PLLC v. Baker, Donelson, Bearman, Caldwell & Berkowitz, PC
U.S. District Court, Western District of Tennessee, Western Division · W.D. Tenn. · Tennessee bar guidance
Conduct
A law firm suing its former counsel filed three briefs with miscited cases and quotations that did not exist, then answered a show-cause order without verifying the authorities.
Consequence
Rule 11 sanction: the firm pays defendants' fees for four responsive filings ($45,763, joint and several with its signing CEO); order sent to all district judges and Tennessee disciplinary counsel.
Lesson
Here the court sanctioned the firm's "improper and insufficiently explained" AI use after a show-cause response that minimized the errors and skipped the ordered verification.
Verified September 29, 2026
- Citation
- Reaves Law Firm, PLLC v. Baker, Donelson, Bearman, Caldwell & Berkowitz, PC, No. 2:25-cv-2623-SHL-atc, Order Issuing Rule 11 Sanctions to Plaintiff for the Misuse of Artificial Intelligence in Court Filings (W.D. Tenn. June 2, 2026) (Lipman, C.J.), ECF No. 37
- Decided
- June 2, 2026
Summary
Reaves Law Firm, PLLC (RLF) sued its former counsel, Baker Donelson, and four of its lawyers for legal malpractice arising out of a $3,631,095.92 judgment against RLF in another Western District of Tennessee case. Defendants argued that RLF's partial motion to dismiss, its response to their motion for judgment on the pleadings, and a supplemental response relied on cases that did not support the stated propositions and quotations that did not exist. Chief Judge Sheryl H. Lipman found support for those allegations and ordered RLF to verify each challenged case and to list any other Western District filings with non-existent citations. The order identifies ten problem authorities, including "Press v. Vanderbilt University," whose cite led to an SEC no-action letter, and "Thornbury v. Madison Cnty.," whose closest match the court found was an unrelated 2017 Western District of Missouri case. RLF's response, the court found, did almost none of what the show cause order required: it acknowledged only three cases as "improper and unverified," called the problems "purely clerical, limited to formatting and inadvertent citation inclusions," and pointed to staff departures after the Mosby verdict. Apart from a reference to an internal AI-policy email, RLF did not acknowledge that AI had any role in the filings.
- AI tool:
- Generative AI, tool not named (the court sanctions the firm's "improper and insufficiently explained use of AI"; the firm, apart from a fleeting reference to an internal AI-policy email, did not acknowledge that AI had any role)
- Sanction amount:
- Reimbursement of defendants' fees for four responsive filings (set at $45,763 by the July 10, 2026 fee order, joint and several with Henry Reaves III); order forwarded to the district's other judges and to Tennessee disciplinary counsel
What sanction did the court impose?
Under Rule 11 and the court's Local Rules, the court sanctioned RLF, finding that its "improper and insufficiently explained use of AI in the drafting of its filings here violates Federal Rule of Civil Procedure 11." RLF must reimburse defendants for the costs of drafting four filings that responded to RLF's filings with improper citations (ECF Nos. 19, 24, 26, and 32). The Clerk was directed to forward the order to the other judges in the district and to the Disciplinary Counsel of the Tennessee Board of Professional Responsibility, and RLF must report any resulting BPR adjudication within fourteen days. The court warned that if the firm or its attorneys "improperly utilize artificial intelligence tools in the future in this Court, the penalties will be significant," possibly including a penalty paid into court or a judgment against the firm and its client. In a July 10, 2026 order the court fixed the fee award at $45,763.00 and made RLF and Henry Reaves III, its CEO and the attorney who signed the filings, jointly and severally liable, due within sixty days. In a June 29, 2026 order the court denied RLF's partial motion to dismiss and granted defendants' motion for judgment on the pleadings.
Why does Reaves Law Firm, PLLC v. Baker, Donelson, Bearman, Caldwell & Berkowitz, PC matter for law firms using AI?
Chief Judge Lipman opened the order by calling the case “a study in the perils that can result from the unchecked use of artificial intelligence in the drafting of legal filings.” The defects ran from real cases cited for propositions they do not address (Seaton, a punitive-damages case about a damaged car, cited on fiduciary duty) to citations the court could not match to any case at all. The order also recounts defendants’ showing that RLF’s response to the motion for judgment on the pleadings cited paragraphs 69 and 70 of a complaint that has forty-seven numbered paragraphs.
Much of the order concerns the response to the show-cause order rather than the original briefs. RLF’s response purported to “accept[] full and complete responsibility for the filing errors identified by the Court,” but the court found that it “simultaneously minimizes the issues for which it is accepting responsibility, and appears to cast blame elsewhere,” including on a departed general counsel. It did not verify the challenged cases, did not explain what checks preceded filing, and did not list other Western District filings as ordered. The court rejected RLF’s request to strike or substitute two filings it called unauthorized drafts, noting that striking its answer would leave no responsive pleading to the counterclaim.
The court relied on the Sixth Circuit’s recent AI decisions, quoting United States v. Farris that the duty to verify citations “reflects duties of competence and candor that apply no matter the tools attorneys use.” The sanction was fees rather than a fine, paired with circulation of the order to every judge in the district and a referral to Tennessee disciplinary counsel. Firms documenting compliance may wish to consider that, in this case, the court sanctioned “improper and insufficiently explained” AI use, faulting the show-cause response as well as the original briefs.
Implications for your firm
Operational steps a firm reading this case may wish to consider documenting. Strategic and rule-application calls belong to your firm's attorneys.
- Document how every authority in a show-cause response was verified. The court required case-by-case confirmation of existence, holding, and quotations, and faulted RLF for doing "none of the steps" it ordered.
- Review whether an AI policy was actually distributed and followed. RLF offered a July 2025 email announcing AI protocols and training; the court noted no evidence it reached other staff and that it "did not prevent the AI-related issues."
- Consider that staffing turmoil did not excuse the filings here. The court held RLF jointly responsible under Rule 11(c) for its employees' conduct, particularly because the firm's principal signed the pleadings.
- Verify citations in filings made while a firm is itself a litigant. The fee award here ran against both the firm and the attorney who signed its briefs.