Rosario v. Liberty Mutual Personal Insurance Company

What did the court warn about?

Judge Kearney dismissed the statutory bad faith claim and struck the three allegations, without prejudice. On the citations, the court wrote: "We defer entering a monetary or educational sanction today." The accompanying order, reciting that the brief included "several inaccurate citations (ECF 12-1) which may warrant sanctions if not addressed," directed Liberty Mutual's counsel, "as a condition of deferring sanctions," to email the memorandum forthwith to all first-year litigation associates in his firm and to firm colleagues and paraprofessionals who may have represented insurers on Pennsylvania bad faith claims in the past twelve months, "directing their specific attention to n.16," and to file a certificate of compliance attaching the cover email and showing the addressees by February 17, 2026. The memorandum explained that the purpose was to put his colleagues "on notice should we see a repeat of these errors in future briefing." No monetary sanction or referral was imposed. The docket shows a notice filed on February 17, 2026 (ECF No. 19), which was not read.

Why does Rosario v. Liberty Mutual Personal Insurance Company matter for law firms using AI?

Rosario is a case in which the court looked at a set of citation errors and expressly declined to blame artificial intelligence. Footnote 16 of Judge Kearney’s memorandum begins by noting that “[t]rial counsel and judges increasingly work under a risk of miscitations or unsupported arguments patched from artificial intelligence favored by many lawyers,” then says: “We have no reason to today find the abuse of artificial intelligence research. We instead see old-fashioned lack of diligence.” The tracker’s AI attribution is its own inference and runs against the court’s stated view.

The errors the court catalogued are the ordinary kind that cite-checking is meant to catch: a quotation attributed to a district court opinion whose Third Circuit source, the court said, does not contain the language, a reporter volume of 56 instead of 506, a Lexis identifier paired with a Westlaw pincite, missing pincites and electronic report numbers, misidentified captions, and quoted language without quotation marks. What the court called “[m]ore concerning” was its observation that counsel “may have copy-and-pasted many of these miscitations and inaccurate quotations” from memoranda filed before other Eastern District judges, citing three such cases as examples. The court also noted the burden such errors place on chambers staff who “study their work product to advise the judges.”

The response was aimed at the firm as much as the lawyer. The court deferred any “monetary or educational sanction,” but as a condition of that deferral ordered counsel to send the memorandum to first-year litigation associates and colleagues handling insurer bad faith claims, with attention drawn to footnote 16, and to certify that he had done so. Firms documenting compliance may wish to consider that, here, the court treated recycled briefing as a firm-level risk and used circulation within the firm, rather than a fine, as its remedy.