Chakma, et al. v. Sushi Katsuei, Inc., et al.
The case
Chakma, et al. v. Sushi Katsuei, Inc., et al., S.D.N.Y., No. 23 Civ. 7804 (KPF), opinion and order filed May 19, 2026. Copy of primary document: `~/workspace/goals/ai-sanctions-case-monitoring/files/sources/D-151-chakma-v-sushi-katsuei.pdf`.
What happened
Defense counsel (name not stated in the order) admitted using LexisNexis's AI tool to draft submissions and filing unchecked, hallucinated or irrelevant authorities in a wage-and-hour class action.
The rule and the sanction
Rule 11 and the duty of reasonable inquiry. AI-specific sanctions: $1,710 in opposing counsel's attorneys' fees plus a $1,000 monetary penalty payable to the court clerk within 30 days. Note: the opinion also awards larger discovery sanctions unrelated to AI; those are not attributed to the AI misuse here.
How it could have been avoided
Premium "legal AI" tools hallucinate like any other AI. Admit the AI use early and verify every authority; the court credited the genuine remorse shown here as mitigation of the penalty amount.
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