Money & the Law: Court of Appeals not amused by AI ‘hallucinations’

By JIM FLYNN Special to The Gazette January 19, 2025 | updated 2 years ago

Jim Flynn

On Dec. 26, the Colorado Court of Appeals found an opportunity to warn litigants that use of generative artificial intelligence in court filings producing false information, including references to nonexistent cases, will not be tolerated and will be grounds for sanctions. This applies to both real lawyers and parties trying to be their own lawyer (pro se litigants).

The case in question is titled Alim Al-Hamim v. Star Hearthstone LLC. Al-Hamim had rented an apartment from Star Hearthstone, which he claimed was practically unusable because of cat hair, cat urine and cat odor coming, apparently, from a prior feline occupant of the apartment. In his lawsuit, Al-Hamim tried to state a claim for breach of the warranty of habitability contained in Colorado statutes. But he acted as his own lawyer and he botched the job of properly setting forth the elements of his claim. He did not allege, as a properly drafted complaint would have, that the cat hair, urine and odor had materially interfered with his life, health or safety. So the trial court (the Arapahoe County District Court) dismissed Al-Hamim’s lawsuit on a motion filed by Star Hearthstone for failure to state a claim.

Al-Hamim, marching on as his own lawyer, appealed the District Court’s dismissal of his lawsuit to the Court of Appeals. There he ran into further trouble by filing an opening brief that he created using generative artificial intelligence. The brief, among other things, referenced eight prior court decisions that were completely made up by the AI program.

The Court of Appeals opinion, written by Judge Lino Lipinsky, did a nice job of explaining how generative artificial intelligence works. Basically, such a program learns from information fed to it and it can then use what it learns to generate real-seeming text. However, Lipinsky noted, the program used by Al-Hamim did not include as part of its learning materials data containing “comprehensive, accurate legal resources.” So when the program used by Al-Hamim was confronted with a question it could not answer, it made things up. This included names of cases and citations to those cases. The Court of Appeals referred to this fabricated material as “hallucinations.”

Lipinsky’s opinion pointed out that, under the rules of appellate procedure, an opening brief must provide a clear and concise discussion of the grounds upon which a party relies when seeking reversal of a lower court’s decision, and this is to include accurate citations of legal authorities. The submission of a brief containing generative artificial intelligence hallucinations, the judge said, “runs afoul of this rule.”

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Lipinsky made it clear in his opinion that parties submitting AI hallucinations in support of their position can be slapped with sanctions, to include paying another party’s attorney fees. (Note: One of the few things worse than having to pay your own lawyer is having to pay someone else’s lawyer.) However, Lipinsky declined to impose sanctions on Al-Hamim since this was the first case making it to the Court of Appeals where a party filing an artificial intelligence-created brief was appearing pro se. The judge decided that denying Al-Hamim’s appeal and affirming the trial court’s dismissal of his lawsuit was punishment enough.

Al-Hamim asked the Court of Appeals for the right to file an amended opening brief containing correct legal authorities. However, the request was denied. The Court of Appeals had apparently had enough of Al-Hamim and his problems with cats.

Lipinsky’s opinion noted that various companies, starting in 2023 and 2024, were working on generative artificial intelligence programs that would be trained using actual legal authorities. He left open how courts, in the future, should handle such submissions that produce accurate and reliable text. That day may be coming.

Jim Flynn is a business columnist. He is of counsel with the Colorado Springs firm Flynn & Wright LLC. He can be contacted at moneylaw@jtflynn.com.

JIM FLYNN Special to The Gazette

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Money & the Law: Court of Appeals not amused by AI ‘hallucinations’

JIM FLYNN Special to The Gazette

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