Transcontinental Realty Investors, Inc. v. Moos
U.S. District Court, Northern District of Texas, Dallas Division · N.D. Tex. · Texas bar guidance
Conduct
Intervenors' response to a disqualification motion cited an N.D. Tex. decision, with an "(O'Connor, J.)" parenthetical, that the court could not match to any real case.
Consequence
No sanction. In a footnote the magistrate judge admonished counsel about responsible generative AI use; both disqualification motions were denied.
Lesson
Here a nonexistent decision cited to the court's own district drew a footnote admonition about responsible generative AI use, and no other consequence.
Verified September 30, 2026
- Citation
- Transcontinental Realty Investors, Inc. v. Moos, No. 3:26-CV-694-O-BW, Memorandum Opinion and Order (N.D. Tex. July 28, 2026) (McKay, M.J.), ECF No. 70
- Decided
- July 28, 2026
Summary
Transcontinental Realty Investors, Inc. (TCI), Pillar Income Asset Management, Inc. and affiliated parties sued Daniel J. Moos, formerly President and CEO of Pillar, and moved to disqualify his counsel, Mark Johansen and Blank Rome LLP. Intervenors Renata Petryliene and Big River NV, LLC (the Petryliene Parties) filed their own response opposing Pillar and TCI's motion (Dkt. No. 65). At page 14 that response cited "Aetna Health Inc. v. Health Goals Chiropractic Ctr., Inc., No. 3:12-CV-2587-O, 2012 WL 12873819, at *1 (N.D. Tex. Oct. 25, 2012) (O'Connor, J.)," a decision attributed to Chief Judge Reed O'Connor, the district judge assigned to this case. The court noted that a case by the same name exists in the District of New Jersey (2011 WL 1343047 (D.N.J. Apr. 7, 2011)) "but that case provides no support for the assertion made in the brief." In its background section, the court described the filings in the case as "riddled with inaccurate citations, seemingly deliberate misrepresentations of guiding caselaw and the factual record, failures to comply with Court rules, and, in at least one instance, advocacy using caselaw that does not exist," and said the nonexistent caselaw was "likely the result of imprudent reliance on a generative artificial intelligence tool." The only filing the order ties to the nonexistent authority is the intervenors' response.
- AI tool:
- Suspected generative AI, tool not identified (the court wrote that the nonexistent authority was "likely the result of imprudent reliance on a generative artificial intelligence tool")
- Amount or terms:
- None; footnote admonition to counsel, noting that the attorney who signed the brief appears pro hac vice
What did the court warn about?
Magistrate Judge Brian McKay, to whom the case had been referred for non-dispositive motions, denied both motions to disqualify Johansen and Blank Rome. On the citation, the order acts only in footnote 1: it notes that "the attorney who signed the brief, and thus made certain representations under Fed. R. Civ. P. 11(b), is appearing pro hac vice, and it admonishes counsel about the responsible use of generative artificial intelligence in court filings," citing Shelton v. Parkland Health (N.D. Tex. Nov. 10, 2025). The order does not name the signing attorney and imposes no monetary sanction, show-cause order, fee award or referral. In the body, the court asked that "going forward, the parties treat this case with a degree of professionalism and care commensurate with the urgent threats to the integrity of the judicial process they repeatedly assert are at stake." The remaining motions in the case were left pending.
Why does Transcontinental Realty Investors, Inc. v. Moos matter for law firms using AI?
The AI point in this 57-page disqualification ruling occupies one sentence of the background and one footnote, but it is pointed. Magistrate Judge McKay opened the background by describing filings “riddled with inaccurate citations” and, “in at least one instance, advocacy using caselaw that does not exist,” which he called “likely the result of imprudent reliance on a generative artificial intelligence tool.” The footnote identifies the instance: the Petryliene Parties’ response cited a 2012 Northern District of Texas decision, with a docket suffix and parenthetical attributing it to Judge O’Connor, and the court noted a same-named District of New Jersey case that did not support the brief’s assertion.
The response was an admonition, not a sanction. The court tied it to the signer’s Rule 11(b) certification and pro hac vice status and cited its own district’s earlier ruling in Shelton v. Parkland Health, but it did not issue a show-cause order or identify the attorney. The hedge matters: the court said the nonexistent citation was “likely” the product of generative AI; it made no finding that AI was used.
Firms documenting compliance may wish to consider that here the nonexistent decision was cited to the court’s own district, with a parenthetical naming the judge assigned to the case. A citation check that confirms the cited case exists, and that its caption, docket and court match, would have surfaced the problem before filing.
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 every citation to the forum's own judges against the court's docket or a research service; here the brief attributed a nonexistent N.D. Tex. decision to the assigned district judge.
- Review what pro hac vice counsel's filings receive before they are signed. The court singled out that the signer, who "made certain representations under Fed. R. Civ. P. 11(b), is appearing pro hac vice."
- Document the basis for each case parenthetical. The court noted that a same-named D.N.J. decision exists but "provides no support for the assertion made in the brief."
Sources
Primary sources
- The order does not name the pro hac vice attorney who signed the intervenors' response, and it does not say whether that attorney used AI; the AI link is the court's "likely" inference.