Stern v. Molina (In re Molina)

What sanction did the court impose?

The court declined to impose monetary sanctions on the pro se defendant, but held that he should not "face no consequence for the fictitious case citations." Going forward, every document he files in the Chapter 7 case and any associated adversary proceeding must be accompanied by a statement sworn under penalty of perjury certifying that he has verified the accuracy of each legal authority cited or quoted, and he must keep copies of all cited authority until the case and adversary proceedings close. The court separately denied the defendant's own sanctions request for failure to observe Rule 11(c)(2)'s safe-harbor period.

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 imposing monetary sanctions, Bankruptcy Judge Scarcella imposed a going-forward requirement as the consequence for the fictitious citations: with each filing, the defendant must 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 requirement is worth knowing as a sanction short of money. Firms opposing a brief that contains citations to unfamiliar or cross-jurisdictional authority may wish to consider that asking the court for a sworn-accuracy requirement, rather than moving to strike, is a lower-cost request 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.