The fine is not the risk

Originally published on billfaruki.substack.com on October 18, 2026. Republished on MindHYVE.ai with light canon edits.

Ask a room of litigators what they are afraid of with generative AI and you will hear the same answer:

A fake case gets into a brief.

Fair enough. It has happened hundreds of times now.

But read the orders — actually read them, not the headlines — and a different picture emerges.

The hallucinated citation is rarely what ends a career. It is what starts a bad week.

It costs somewhere between one and twelve thousand dollars and a paragraph in a legal trade publication.

What takes the licence is what happens in the twenty minutes after the judge says:

Counsel, I could not find this case.

Every escalation in the published record — every move from a fine to a suspension — runs through concealment, not error.

That is the finding, and it is not subtle once you see it.

These cost money, reputation, and occasionally the case. They are the ones competent lawyers commit.

Signing a filing with citations you did not personally verify

Rule 11 in federal court. CCP § 128.7 in California.

This is the bulk of the docket.

The Ninth Circuit put the moment of violation precisely: it “occurred when the attorneys signed and filed the briefs.”

Not when the tool generated the text. At signature.

Typical reported range: $1,000 to $12,000.

• $5,000 in the Mata v. Avianca matter that started all of this.
• $12,000 split across four lawyers in a Kansas patent case.

Checking that the cases exist — and stopping there

This is the most underestimated failure on the list, and the one that catches careful people.

The Ninth Circuit is explicit that verification is not a lookup.

A competent and diligent attorney “must do more than prompt generative AI, check that the citations provided by” the tool resolve.

A real case cited for a proposition it does not support is sanctionable.

A real case with a quotation that appears nowhere in it is sanctionable.

The citation resolving is the floor, not the ceiling.

And a great many lawyers now believe, wrongly, that a citation-checking tool has discharged their duty.

It has not. It cannot. No tool can, because the duty attaches to the signature.

Filing an argument that only hallucinations support

This one changes the rule you are charged under.

California Rule of Professional Conduct 3.1(a)(2) prohibits frivolous filings, and the Ninth Circuit drew the line cleanly: “A fake opinion is not ‘existing law’ and citation to a fake opinion does not provide a non-frivolous ground for extending, modifying, or reversing existing law.”

Different rule. Different track. Different consequence.

A citation problem is sloppiness.

A frivolous filing is a professional conduct charge.

Signing someone else's AI-assisted draft without reading the cases

Partners: this is your exposure, and you may never have touched the tool.

The Ninth Circuit treated the “practice of not reading the cases in the Brief Writers' briefs before filing them” as creating an “inherent risk” of citing fabricated authority — and used that practice to infer scienter.

The supervising lawyer who signs what the associate drafted is not a bystander to this problem.

Under Rules 5.1 and 5.3, they are the point of it.

Putting client confidences into a system that is not closed

Consumer AI tools with no confidentiality guarantee. Shared team logins. Vendors whose support staff can read matter content.

California's new statute frames the duty around systems “not restricted to the attorney and persons under confidentiality obligations.”

This one has produced few sanctions so far.

That is not reassurance — it is a lag.

It will surface as malpractice claims and client complaints before it surfaces as discipline, and by then the disclosure has already happened.

Missing a disclosure requirement

Many courtrooms already require it by standing order.

From January 1, 2027, California makes it statutory: disclose the use of generative AI to the court for all documents submitted to it.

This failure is never intentional.

It is a workflow gap.

One team remembers. Another does not. A third assumes internal drafting use is exempt.

Which is exactly why it will be common.

These take the licence. Note how many of them begin after the mistake.

Misrepresenting your AI use when the court asks

In Matter of Sethi, the attorney was suspended: “For submitting a brief containing artificial intelligence hallucinations and for making false statements to the court regarding his use of artificial intelligence.”

Read the conjunction.

Two grounds, not one.

Six months before the Ninth Circuit, then reciprocal six-month suspensions before the Board of Immigration Appeals, the immigration courts, and DHS.

“Correcting” the error by quietly swapping in a real case

Here is the trap almost nobody sees coming, and the instinct of every lawyer who has ever fixed a draft.

The Ninth Circuit closed it in a sentence: “Swapping a hallucination out for a real case does not correct the prior false claim.”

Why?

Because by citing and signing, counsel “previously attested to the accuracy, and thus the existence, of the hallucinated citations.”

Describing it to the court as “an error,” or as a citation being “incorrect,” was held not to be sufficient disclosure.

The substitution is not a fix.

It is a second misrepresentation, layered on the first.

And it is worse than the first because it is deliberate.

Compounding at every subsequent step

“The misconduct in this case did not end with the initial filing… At every subsequent step—”

Opposition brief. Oral argument. Response to the order to show cause.

Each one is a fresh opportunity to come clean, and each one you let pass is a new act.

This is the mechanism by which a $5,000 problem becomes a suspension:

Not one bad decision, but four or five small ones made under embarrassment.

Billing AI output as attorney time

Fee fraud.

In California this reaches § 6106 moral turpitude territory rather than mere incompetence, and the distinction matters enormously at the discipline stage.

It also has the longest fuse on this list.

It surfaces in a fee dispute, an audit, or a disgruntled former client — often years later, when the firm has long since forgotten which hours were which.

Letting the system make the call

Delegating substantive legal determinations, client communication, or filing to an agentic system.

California now prohibits it outright: “An attorney shall not delegate the practice of law to generative artificial intelligence.”

The State Bar's revised guidance draws the operational line: lawyers “must not permit AI systems to autonomously file documents, communicate with the court, or make representations on the lawyer's behalf.”

No discipline case has tested this yet.

One will.

Lawyers budget for the fine.

They do not budget for what follows it.

Reciprocal discipline cascades automatically

One court's suspension propagates to every other bar and tribunal you are admitted to.

Sethi shows the whole mechanism inside nine pages: Ninth Circuit suspension, immediate suspension before the Board, then six months across three separate forums.

You do not get to contain it.

You have to tell everyone yourself

The sanctioned attorneys were ordered to provide a copy of the order to their clients, opposing counsel, and the presiding judge in every pending state or federal case.

Sit with that for a moment.

That is the client-loss event.

Not the fine — the letter you write to every client you currently represent, explaining why a court sanctioned you.

It is public, and it is permanent

The Board ordered the contents of its decision made available to the public.

These orders are indexed, searchable, and will be the first result for your name for the rest of your career.

The case itself can be lost

A Mississippi federal judge cancelled a trial, disqualified all four lawyers — both sides had done it — imposed fines of $1,000 to $3,500, and barred two of them from appearing before the court for two years. (Secondary source.)

The Sixth Circuit reportedly went to six figures: fees, double costs, and a $45,000 punitive sanction. (Secondary source.)

Courts increasingly refer rather than resolve

The Tenth Circuit referred an attorney to Maryland disciplinary authorities. (Secondary source.)

A New York appellate court observed that discipline “may be a matter for the Attorney Grievance Committee.” (Secondary source.)

The judge in front of you may not be the one who decides your fate.

Six things, in the order I would do them.

1. Verify at signature, source by source, and record that you did

The question in a sanctions hearing is not whether you verified.

It is what you can show.

An undocumented verification is indistinguishable from none.

2. Read the cases, not just the citations

Existence is the floor.

Does the case say what the brief says it says?

3. If something fabricated gets filed, disclose it immediately, completely, and in those words

Do not substitute.

Do not characterise it as an error.

Name it.

This single decision is the difference between a fine and a suspension, and you will make it while feeling the worst you have felt all year.

4. Make court disclosure a template field, not a memory task

A statutory obligation should not depend on someone remembering to perform it.

5. Audit where client content actually goes

Ask every vendor, in writing, who can read matter content and under what obligation.

6. Inventory your tools for anything that files or corresponds autonomously, and switch it off

Review the capabilities, not just the marketing claims.

Supervising lawyers: items 2 and 6 are yours.

You can be sanctioned for a brief you did not write, using a tool you have never opened.

I work for MindHYVE.ai, which builds JustineAI™, an Agentic Legal Operating System.

You should read everything above with that in mind, so let me be direct about where our product touches this list and where it does not.

Where JustineAI does

Two of these failures are architectural, and we built for them before the statute existed.

JustineAI's motto is on every edition page:

On the case-management surface:

“Justine never files, communicates as the firm, accepts a settlement, or executes litigation strategy without explicit attorney action.”

We did not ship auto-filing, and we said why in public:

“The auto-file feature is cheap to ship and exists in most generative legal-AI products in market because it sells. We chose not to ship it because what we say about the attorney being the decider would otherwise be a lie.”

On citation verification

Every legal citation in a draft demand letter is resolved against the live CourtListener corpus.

Case name, citation, year, and court must match.

If a citation cannot be resolved — for any reason — it is removed from the draft and the matter is flagged for the attorney of record to supply an alternative.

Unresolved suggestions are labelled research leads, not verified authority.

On confidentiality

Customer matter data is “never used to train or fine-tune any model.”

Inference runs inside our own tenant, and “no customer content is sent to a third-party model-vendor SDK on the production path.”

On supervision and evidence

AI-initiated actions are logged with:

• Action
• Actor
• Timestamp
• Matter reference

Those records are exportable for litigation discovery, malpractice insurance, and ethics review.

Where JustineAI does not

Three things, plainly.

1. Our citation verifier does not discharge your duty.

It resolves and it removes.

Under CCP § 128.7(b)(2), the signing attorney must still personally verify.

We make that review fast and leave you a record of it.

We do not perform it.

And no vendor who tells you otherwise is describing a product — they are describing your sanctions exposure.

2. We do not generate your court disclosure statement.

That duty is yours.

3. We cannot help with Part Two at all.

Everything in the deliberate column is character and workflow under pressure.

No software prevents a lawyer from telling a judge something untrue.

If the disclosure instinct fails, nothing on this page saves you.

That is worth more than anything I could sell you.

JustineAI is in market in two editions:

Personal Injury (PI) — justinegrid.ai/pi

Workers' Compensation (WC) — California applicant-side practice — justinegrid.ai/wc

Citation Verification Technology — see how citation verification works, with live, clickable examples — justinegrid.ai/technology/citation-verifier

This article provides information about published court orders and a new California statute. It is not legal advice and creates no attorney-client relationship.

Verify every authority against its primary source before relying on it — which is, after all, the entire point.

This essay is general commentary, not legal advice.

First published on Bill Faruki's Substack on October 18, 2026. Lightly edited for house style. Read the original.