M.T. Real Estate Investment Inc. v. Servis One, Inc.
The case
M.T. Real Estate Investment Inc. v. Servis One, Inc., No. 2:25-cv-01372-GMN-DJA (D. Nev.), order entered December 30, 2025. Copy of primary document: `~/workspace/goals/ai-sanctions-case-monitoring/files/sources/D-123-mt-real-estate-v-servis-one.pdf`. Source URL: https://www.damiencharlotin.com/documents/1234/MT_Real_Estate_v._Servus_One_USA_30_December_2025.pdf
What happened
Attorney Bryce Finley admitted that five authorities cited in his filings were nonexistent and were products of AI allegedly used by his paralegal. He filed the briefs without verifying the citations.
The rule and the sanction
The court found violations of the duty of reasonable inquiry and candor to the court. Sanctions imposed: the two offending responses were struck; defendants were awarded their reasonable fees and costs (amount to be agreed or litigated); Finley was ordered to serve the order on his client; and the matter was referred to the Nevada State Bar. (The operative clause directs the Clerk to serve a copy of the order on the Nevada State Bar Association; the court's sanctions analysis, ORDER p. 7, characterizes the sanction as referral to disciplinary authorities.)
How it could have been avoided
(a) The signing attorney cannot delegate verification to staff; if a paralegal uses AI, the attorney must check each citation anyway. (b) Client notice and bar referral follow automatically from filing fake law, so prevention is the only control. (c) Adopt a written rule that any AI-assisted research gets a second-pass citation check by the filing attorney.