Taylor v. Cooper Power & Lighting Corp.

How did the court address the AI-related conduct?

In a June 13, 2025 report and recommendation, Judge Locke recommended that Rutella's motion to vacate be denied, finding his default willful. In footnote 4 he rejected counsel's explanation: "It is implausible that an attorney would cite a case as specific as 'Green v. John H. Streater, Jr., 666 F.2d 119 (3d Cir. 1981)' – which Krupnick admits does not exist – as a 'placeholder' that he intended to replace." He added that "Krupnick's conduct raises questions of his adherence to Fed. R. Civ. P. 11 (as he himself concedes)," but, "given the Court's recommendation that Rutella's motion to vacate be denied, the Court declines to recommend further action with respect to Rutella's misleading submission." No sanction, fine, or referral was recommended or imposed. On July 2, 2025, District Judge Hector Gonzalez, finding no objections and no clear error, adopted the report and recommendation and denied the motion to vacate; the adoption order does not address the citation. Krupnick was later removed from the docket on a consent substitution of counsel (August 8, 2025).

Why does Taylor v. Cooper Power & Lighting Corp. matter for law firms using AI?

Judge Locke’s handling moved quickly from verification to explanation. Within about a month of Rutella’s reply, Judge Locke entered an electronic order setting out what his chambers had found: the reporter citation for the “Green” case led to Delesdernier v. Porterie, a Fifth Circuit recusal decision, and a search of the case name, including variations and misspellings, returned nothing relevant. He directed Rutella’s attorney, Kevin Krupnick, to either submit a copy of the case or to show cause by sworn declaration why the court should not recommend Rule 11 and inherent-power sanctions, quoting the Second Circuit’s statement in Park v. Kim that Rule 11 at minimum requires attorneys to read and confirm the existence of the authorities they cite.

Counsel’s response, as the report and recommendation describes it, admitted that the case did not exist and characterized it as a placeholder in a draft. The court did not accept that account. It found it “implausible that an attorney would cite a case as specific as” the Green citation as a placeholder, and noted that the reply already cited Peralta v. Heights Medical Center, the case counsel said he meant to use. The court found that the conduct “raises questions” under Rule 11, which it said counsel conceded, and described the filing as a “misleading submission.” Neither order mentions artificial intelligence, and the tracker’s AI coding is an inference.

What the court did not do is equally clear. Because it was recommending denial of Rutella’s motion to vacate, it “decline[d] to recommend further action,” and the district judge’s adoption order did not revisit the point. Firms documenting compliance may wish to consider that, in this case, an unsupported explanation for a fabricated citation was set out and rejected in a filed report and recommendation (ECF No. 71), even though no sanction followed, and that the court’s show-cause order asked first for a copy of the case before turning to counsel’s explanation.