News on Legal Ethics, Professional Responsibility and the Law of Lawyering for the Practicing Lawyer

Another AI Hallucination Case Results

in $5,000 Sanction and State Bar Referral

In Re Domestic Partnership of Campos and Munoz, Fourth Dist., Div. 1, case no. D085584, filed 3/5/26. Campos (referred to in the opinion as Torres) and Munoz were in a domestic partnership. They separated, and there was a dispute over custody of their dog, Kyra. Munoz's counsel had previously sent a letter to Campos's counsel contesting his request for custody; the letter cited AI hallucinated cases. Campos filed a request for an order after hearing (RFO) regarding custody. Munoz's counsel filed an opposition citing one of the hallucinated cases. After hearing, Torres's counsel drafted an order citing the same hallucinated cases. The judge failed to notice that the citations were hallucinations and signed the order. Torres appealed but failed to file an opening brief. He then filed a motion to reinstate the appeal, arguing for the first time that the trial court order regarding custody and visitation (that his counsel had drafted) cited the hallucinated cases and must be overturned. Campos's counsel filed an opposition contesting that the citations were hallucinated and taking umbrage at the "allegation of professional misconduct". The Court of Appeal reinstated the appeal and ordered Munoz's counsel to provide a copy of the hallucinated case. Campos's counsel then conceded that she failed to verify the citation. The Court of Appeal found that the trial court erred by issuing an order based on a fabricated case, but that Torres forfeited his right to appeal because his counsel drafted the order. Ultimately, Campos's counsel was sanctioned $5,000 for her use (and defense) of the hallucinated citation and referred to the State Bar.

Pending Senate Bill 574:

New Discipline Provisions Related to Attorney Use of AI

Senate Bill 574, currently pending in the California Legislature, would add new section 6068.1 to the Business and Professions Code more specifically defining attorney duties regarding AI use. These provisions would be enforceble by discipline. It would also amend Code of Civil Procedure sections 128.7 and 1282.1 to similarly regulate AI use by lawyers and arbitrators. n The bill's digest states:

Existing law, the State Bar Act, provides for the licensure and regulation of attorneys by the State Bar of California, a public corporation. The act requires an attorney to strictly maintain client confidences and to preserve client secrets at their own peril.



This bill would obligate an attorney who uses generative artificial intelligence to practice law to ensure that confidential personal identifying, or other nonpublic information, is not entered into a public generative artificial intelligence system. The bill would also require an attorney to ensure that reasonable steps are taken to verify the accuracy of generative artificial intelligence material and to correct any erroneous or hallucinated output in any material used by the attorney.

Existing law requires every pleading, petition, written notice of motion, or other similar paper to be signed by the attorney of record, or if a party is unrepresented, by the party, thereby certifying to the best of the person’s knowledge, information, and belief that it is not being presented primarily for an improper purpose and that the claims, defenses, and legal and factual contentions are warranted, as specified.

This bill would prohibit a brief, pleading, motion, or any other paper filed in any court from containing any citations that the attorney responsible for submitting the pleading has not personally read and verified, including any citation provided by generative artificial intelligence.

Existing law, the California Arbitration Act, provides a statutory framework for the enforcement of contractual arbitration under California law. The act establishes that a written agreement to submit a present or future controversy to arbitration is valid, enforceable, and irrevocable, except as specified. The act defines a neutral arbitrator as one who is selected jointly by the parties or by the parties’ arbitrators, or is appointed by the court if the parties or their arbitrators cannot jointly select an arbitrator. The act requires a person selected to serve as a neutral arbitrator to disclose all matters that could cause a person aware of the facts to reasonably entertain a doubt as to the proposed neutral arbitrator’s impartiality.

This bill would prohibit an arbitrator from delegating any part of their decision-making process to any generative artificial intelligence tool. The bill would prohibit an arbitrator from relying on information generated by generative artificial intelligence outside the record without making appropriate disclosures to the parties beforehand. The bill would require an arbitrator to assume responsibility for all aspects of an award, regardless of any use of generative artificial intelligence tools to assist with the decision-making process.

Competing Lawyer Claims to Fees

from the Same Settlement Can Be Ajudicated in One Proceeding

Jacobs v. Papez, Third App. Dist., case no. C100761, filed 3/13/26.Appellant Jacobs and respondent Papez were lawyers who each, at

separate times, represented two plaintiffs in a personal injury action. Both attorneys were retained under written contingency fee agreements entitling them to a percentage of the plaintiffs’ recovery. After Jacobs settled the personal injury action, he and Papez could not agree on the amounts owed to them under their respective attorney liens on the settlement proceeds. To resolve the dispute, Jacobs filed a declaratory relief action against both Papez and the clients, seeking a determination of all parties’ respective rights. The trial court dismissed Jacobs’s action against Papez on the ground that Papez

was entitled to have the validity and amount of his attorney lien determined first in a separate action, before Jacobs could have the validity and amount of his lien determined. The Court of Appeal concluded that it was not necessary for Papez to adjudicate his claim first in a separate proceedings and the claims of both lawyers could be determined in the same declarartory relief action; the trial court court erred in dismissing the action. The order was reversed the matter and the case remanded for further proceedings

Public Comment: Proposed Modifications

to Rules Related to Lawyer Referral Services

The proposed amendments introduce a new Article 3 to the State Bar Rules establishing a regulatory framework for partnerships between certified Lawyer Referral Services and eligible nonprofit organizations. These rules define the roles and responsibilities of each party, detail the required notice and approval process, and clarify that the LRS remains fully accountable for compliance and consumer protection.

The proposal also updates existing rules to reflect current practices. Key changes include revised definitions, clarified application and recertification procedures, expanded performance measurement requirements, and updated notice, recordkeeping, and reporting standards. Several amendments modernize communication and technology provisions, including quality control requirements for automated referral systems.

The revisions further streamline multicounty operations by allowing more flexibility in panel structure and geographic service areas, which may reduce barriers for underserved regions.

Collectively, the amendments are intended to improve transparency, increase access to justice, support responsible innovation, and ensure that LRSs and their nonprofit partners operate with clear expectations and consistent oversight.

The proposed rules were circulated for a 45-day public comment period, which concluded on January 10, 2026. In response to the comments received, the revisions include: (1) clarifying that the State Bar is required to review complaints concerning uncertified lawyer referral services (rule 3.807); (2) making nonsubstantive edits to remove unnecessary language and correct a typographical error (rule 3.826); and (3) explicitly requiring interim reporting of changes in ownership interests (rule 3.828).

Deadline: April 16, 2026, 11:59 p.m.

Comments should be submitted using the online Public Comment Form. The online form allows you to input your comments directly and can also be used to upload your comment letter and/or other attachments.