Turgeon v. Federal Home Loan Mortgage Corporation
U.S. District Court, District of New Hampshire (appeal from the U.S. Bankruptcy Court) · D.N.H. · New Hampshire bar guidance
Conduct
A pro se Chapter 13 debtor filed an objection to the Trustee's motion to dismiss with citations the bankruptcy court called "false, hallucinated case citations."
Consequence
Here the bankruptcy court struck the objection with leave to amend; the district court upheld the strike against a due-process challenge and affirmed the dismissal.
Lesson
Here the district court held that striking a filing the bankruptcy court said had "false, hallucinated case citations," with leave to amend, satisfied due process.
Verified September 30, 2026
- Citation
- Turgeon v. Fed. Home Loan Mortg. Corp., No. 25-cv-0510-SM-TSM, Opinion No. 2026 DNH 112 (D.N.H. Aug. 26, 2026) (McAuliffe, J.), ECF No. 18
- Decided
- August 26, 2026
Summary
Noella P. Turgeon, a Chapter 13 debtor proceeding pro se, appealed the bankruptcy court's November 2025 order dismissing her second Chapter 13 case and declining jurisdiction over the remaining matters. At an October 24, 2025 hearing, the bankruptcy court questioned her about her use of "false, hallucinated case citations" in her objection to the Chapter 13 Trustee's motion to dismiss, explained that the citations were inaccurate and misleading, and struck the objection. According to the district court, the bankruptcy court explained to her that the cases she cited "either did not exist, were issued by a different court than the court Turgeon had cited, or simply did not stand for the propositions for which Turgeon had cited them," urged her to retain counsel, and gave her two weeks to file an amended objection. She did not file one. On appeal she argued, among other things, that striking the objection denied her due process.
- AI tool:
- Unidentified (the bankruptcy court described "false, hallucinated case citations"; neither court attributes them to AI or names a tool)
What sanction did the court impose?
District Judge Steven J. McAuliffe affirmed the dismissal. The court held that the bankruptcy court did not abuse its discretion in dismissing the case under 11 U.S.C. 1307(c) for failure to timely file an amended Chapter 13 plan and for unreasonable delay prejudicial to creditors. It rejected the due-process challenge to the strike, holding that the bankruptcy court "was well within its rights to strike Turgeon's objection, which, the court observed, contained 'false, hallucinated case citations,' that were 'misleading . . . [to] the Court and other parties,'" citing the bankruptcy court's power under 11 U.S.C. 105(a) to manage its docket. The court also held that Turgeon was given an opportunity to cure, two weeks' leave to file an amended objection, and "having failed to take advantage of her opportunity to be heard, Turgeon cannot now complain that she was denied sufficient process." The district court's order describes no monetary or other sanction for the citations; the consequence it recounts is the strike.
Why does Turgeon v. Federal Home Loan Mortgage Corporation matter for law firms using AI?
Turgeon is a bankruptcy appeal in which the citation problem surfaces as one of three issues the district court addressed rather than as a sanctions proceeding. The dismissal itself rested on ordinary Chapter 13 grounds: the debtor repeatedly failed to file and serve an amended plan after being warned that dismissal could follow, and the bankruptcy court found her case was aimed at litigating against two secured creditors rather than reorganizing. The district court affirmed both grounds under the abuse-of-discretion standard, relying for the first ground on Taal v. St. Mary’s Bank as a “strikingly similar case” and for the second on In re Colón Martinez and In re Stevenson.
The citation-related holding is narrow. Turgeon argued that striking her objection to the Trustee’s motion denied her due process. The district court disagreed on two grounds: the bankruptcy court “was well within its rights” to strike an objection containing what it called “false, hallucinated case citations” that were misleading to the court and other parties, citing 11 U.S.C. 105(a) and the inherent power to manage a docket; and she was given two weeks’ leave to file an amended objection and did not use it. The court noted that the bankruptcy judge “even took the time to explain to Turgeon why the cases she had cited in her objection were misleading.”
Neither court says AI was used. The phrase “hallucinated” is the bankruptcy court’s, as quoted by the district court, and no tool is named. For practitioners, the order is an example of a court treating a strike with an opportunity to refile, rather than a monetary sanction, as the response to unreliable citations in a pro se filing, and of an appellate court upholding that approach against a due-process challenge.
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.
- Document that a strike with leave to amend was treated here as adequate process. The district court rejected the due-process challenge because the debtor was given two weeks to refile and did not.
- Review filings in bankruptcy matters for citation accuracy before hearings. Here the bankruptcy court questioned the debtor on the record about her citations and explained why the cases she cited were misleading.
- Consider that the appellate court grounded the strike in the bankruptcy court's 11 U.S.C. 105(a) authority to manage its docket rather than in a sanctions rule.
Sources
Primary sources
- AI attribution: the district court quotes the bankruptcy court's description of the citations as "false, hallucinated case citations" but neither court states that AI produced them or names a tool. Treating them as AI hallucinations is a Charlotin tracker inference.
- The bankruptcy court's strike ruling is described only as the district court recounts it (hearing transcript, Bankruptcy Court Docket Document No. 74); the bankruptcy transcript and docket were not read, and the bankruptcy judge is not named in the district court's order.