Stern v. Molina (In re Molina)
U.S. Bankruptcy Court, Eastern District of New York · E.D.N.Y. Bankr. · New York bar guidance
Conduct
Bankruptcy adversary defendant cited four authorities the court could not locate, treated as suspected AI hallucinations.
Consequence
Order to file sworn accuracy statement on the cited authorities; no monetary sanction yet.
Lesson
Bankruptcy courts are using sworn-accuracy orders as a discovery mechanism on suspected AI hallucinations, distinct from monetary sanctions.
Verified May 14, 2026
- Citation
- Stern v. Molina (In re Molina), Adv. Proc. No. 8-21-08139 (Bankr. E.D.N.Y. Sept. 22, 2025) (Scarcella, J.)
- Decided
- September 22, 2025
Summary
In an adversary proceeding before the U.S. Bankruptcy Court for the Eastern District of New York, defendant Molina cited multiple authorities the court and opposing counsel could not locate, including a disciplinary decision, an E.D.N.Y. opinion, a California appellate decision, and an E.D. Cal. opinion. Bankruptcy Judge Louis A. Scarcella treated the citations as potentially fictitious and ordered the defendant to file a sworn statement attesting to the accuracy of the citations.
- AI tool:
- Implied (court could not locate cited cases; AI hallucination suspected)
What sanction did the court impose?
Order to file sworn accuracy statement on cited authorities. No monetary sanction at this stage; potential further action depending on the sworn response.
Why does Stern v. Molina (In re Molina) matter for law firms using AI?
Stern v. Molina (In re Molina) introduces a procedural mechanism not yet common in district-court AI-hallucination practice: the sworn-accuracy order. Rather than issuing a warning or proceeding directly to sanctions, Bankruptcy Judge Scarcella required the defendant to attest under oath that each cited authority is accurate. The mechanism shifts the burden of cite-verification back onto the filer in a way that creates an explicit, on-the-record representation that can support a future fraud-on-the-court sanction if any citation turns out to be fabricated.
For firms with bankruptcy adversary practices in E.D.N.Y., the sworn-accuracy order is worth knowing as a discovery mechanism. When opposing a brief that contains citations to unfamiliar or cross-jurisdictional authority, requesting the court issue a sworn-accuracy order (rather than moving to strike) is a lower-cost ask that puts the burden on the opposing party. The mechanism is particularly suited to bankruptcy adversaries because the adversary proceeding posture already involves heightened pleading and disclosure obligations.
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.
- In bankruptcy adversary proceedings in E.D.N.Y., the sworn-accuracy order is now a procedural mechanism the court may use before deciding sanctions. Counsel preparing briefing should treat citation accuracy as separately attestable.
- Cross-jurisdictional citations (a California appellate cite, an E.D. Cal. cite) appearing in an E.D.N.Y. bankruptcy filing are a flag worth investigating; the cross-jurisdictional pattern often signals AI-generated padding.
Sources
Primary sources
Further reading
- Whether the defendant filed the sworn statement and how the court responded is not verified. The 'sworn accuracy statement' order is the most recent step on the public record.