Rimu Capital Ltd. v. Ader
U.S. District Court, Southern District of New York · S.D.N.Y. · New York bar guidance
Conduct
Here defense counsel filed a motion to dismiss whose citations plaintiff could not locate; he said the research came from another attorney and that he did not check it.
Consequence
After a show-cause order, the court admonished counsel at the hearing and gave the plaintiff leave to seek sanctions; no citation-related motion appears on the docket through September 2026.
Lesson
Here the court told counsel that signing papers carries responsibility for their citations even when someone else did the research.
Verified September 30, 2026
- Citation
- Rimu Capital Ltd. v. Ader, No. 23-cv-5065 (LJL), Order (S.D.N.Y. Oct. 17, 2025), ECF No. 234; Tr. of Conference (Oct. 21, 2025) (Liman, J.), ECF No. 239
- Decided
- October 21, 2025
Summary
Rimu Capital Ltd. sued Jason Ader and related defendants. After the Ader Defendants had answered, their counsel, Howard Benjamin, filed a motion to dismiss. On October 15, 2025, plaintiff's counsel sent the court a letter that, as the court summarized it, "alleges that the Ader Defendants' motion to dismiss contains numerous fake case citations and quotations." Judge Lewis J. Liman had already set an October 21 conference on a discovery dispute; his October 17 order added the letter to the agenda and directed: "The Ader Defendants are ordered to show cause at the hearing why they should not be sanctioned for such alleged conduct." Benjamin withdrew the motion before the conference. At the conference, plaintiff's counsel said the motion had citations "that we could not locate and identify." Benjamin said Mr. Ader "provided me with research that I was informed was done by another attorney that he had previously hired," that "I did not check the citations," and that "in this day of AI, which I have never used and never will use, I should have checked it." He said he had the withdrawal requested as soon as he saw the court's order, apologized, and said he had practiced for 49 years.
- AI tool:
- Unidentified (defense counsel told the court the research was, he was informed, done by another attorney his client had hired, and that AI is something he has "never used and never will use"; the court made no finding about AI)
What did the court warn about?
The court gave plaintiff's counsel leave to move for sanctions, noting he did not need leave, but said it was "not going to express an opinion whether it has merit or what the sanctions are that would be available if I determine it has merit." It then told Benjamin that "anybody who puts their name to papers takes on a responsibility with respect to those papers and, you know, bears a risk if the papers turn out to be violative of the rules," and that although the quick withdrawal meant the court did not spend time on the citations, the plaintiff likely had, "and that is not what's expected of a lawyer appearing before this court." The court imposed no sanction, and no written order discharged the show-cause. The CourtListener docket through September 2026 shows no citation-related sanctions motion. The plaintiff's later sanctions motion (Dkt. No. 255, May 29, 2026), described by the court as a "motion for an order holding the Entity Defendants in contempt and seeking sanctions," was withdrawn without prejudice at the plaintiff's request on August 1, 2026.
Why does Rimu Capital Ltd. v. Ader matter for law firms using AI?
Rimu Capital shows a show-cause order taken up at a conference without a sanction. The plaintiff’s letter alleged fake citations and quotations in the Ader Defendants’ motion to dismiss, and Judge Liman added the issue to an already scheduled conference, ordering the defendants to show cause why they should not be sanctioned. Counsel withdrew the motion before the hearing.
At the conference, defense counsel Howard Benjamin said his client had given him research that he was informed another attorney had prepared, that he had not checked the citations, and that AI is something he has never used. The court did not decide how the citations arose. It gave the plaintiff leave to move for sanctions without expressing a view on the merits, and it told Benjamin that anyone who “puts their name to papers” takes on responsibility for them and bears the risk if they violate the rules, adding that the plaintiff had likely spent time on the citations and “that is not what’s expected of a lawyer appearing before this court.”
No written order discharged the show-cause, and no citation-related sanctions motion appears on the docket through September 2026. Firms documenting compliance may wish to consider that, here, the court placed the responsibility on the signing lawyer regardless of who prepared the research, and that a fast withdrawal limited the court’s own time on the problem but did not prevent the admonishment.
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.
- Verify citations in research supplied by a client or by prior counsel before filing. Here counsel told the court he relied on research he was told another attorney had done and did not check it.
- Document the steps taken when citation problems surface. Here counsel told the court he had the motion withdrawn as soon as he saw the court's order, and the court noted the quick withdrawal meant it did not spend time on the citations.
- Consider that a court may treat the signing lawyer as responsible regardless of who drafted. Here the court said that even local counsel filing briefs prepared by out-of-state counsel must make sure the citations are accurate, and that anyone who puts their name to papers bears the risk.
Sources
Primary sources
- The October 21, 2025 transcript (ECF No. 239) is not in RECAP; it was read from the court's PACER copy purchased on 2026-09-30. The RECAP copies cited are the October 17 order (ECF No. 234) and the docket.
- AI attribution is a Charlotin tracker inference: counsel denied using AI himself, said he was informed the research was done by another attorney his client had hired, and the court made no finding about how the citations arose.
- The motion to dismiss (ECF No. 230), plaintiff's October 15 letter and chart (ECF No. 232, which the docket shows attached a 'Decision and Order in Ader v. Ader'), and Jason Ader's November 21, 2025 declaration (ECF No. 241) were not read; the citations at issue are described only as the order and the transcript describe them.
- The papers on the later sanctions motion (Dkt. Nos. 255-257) were not read; the motion is described as the court's July 8, 2026 order (Dkt. No. 272) describes it.