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Courts on AI / Fabricated or misquoted citations

Drip Capital, Inc. v. SGM Socher Inc.

Supreme Court of the State of New York · State trial courts · NY · · 2026 WL 1279092 · No. 651061/2025 · order

The New York Supreme Court on 2026-05-01 ordered counsel to show cause why sanctions or corrective action should not issue for the defective authorities in Drip Capital, Inc. v. SGM Socher Inc. Counsel filed an opposition with two fabricated case citations, including Gildea v Sheridan.

Disposition
The turnover motion was granted in part, the cross-motion was denied, and counsel was ordered to show cause why $3,000 sanctions should not issue.
Recorded conduct
Defense counsel cited two nonexistent cases, Jones Wolf Realty and Gildea, which the court described as AI hallucinations. The court ordered counsel to show cause regarding possible $3,000 sanctions. — outcome: pending; actor: lawyer
Canonical record
Incident tracker entry — verified outcome, regulator disposition and related rules

What the court wrote

Verbatim from the court's document (public domain). Ellipses mark omitted text; nothing is paraphrased.

However, in light of the history of this action and baseless arguments that have been proffered defendants are strongly cautioned that if they fail to comply or engage in further frivolous conduct serious coercive sanctions may be imposed. The court also may reconsider whether a receiver is necessary if it appears that the approach here is akin to what occurred in Herman. Hopefully, that will not be necessary. Finally, as a separate but no less serious matter, defense counsel included what appear to be AI hallucinations in the opposition brief (see Dkt. 74 at 16-17). He cites two cases (“Jones Wolf Realty v 2 E. 79th St. Corp.

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