Drip Capital, Inc. v. SGM Socher Inc.
SC New York · May 1, 2026
What happened in this matter?
The court issued an order to show cause requiring defense counsel to explain why he should not be sanctioned $3,000 for citing two non-existent, AI-hallucinated cases in an opposition brief. The court explicitly identified the citations as frivolous and sanctionable conduct.
- Why the court cared
- The court reasoned that citing non-existent cases is frivolous and sanctionable conduct, citing Deutsche Bank Natl. Trust Co. v LeTennier, 250 NYS3d 260, 265-69 (3d Dept 2026).
- Why it matters now
- This case highlights the judicial intolerance for AI-generated hallucinations in court filings. It serves as a reminder that counsel bears personal responsibility for verifying the existence and accuracy of all cited authorities, regardless of the research tools employed.
Why this matter is tracked
In Drip Capital, Inc. v. SGM Socher Inc., the Supreme Court of New York, Commercial Division, addressed a motion for turnover of membership interests. During the proceedings, the court identified that defense counsel, Alexander Levkovich, included two non-existent cases, "Jones Wolf Realty v 2 E. 79th St. Corp." and "Gildea v Sheridan," in the opposition brief. The court characterized these citations as AI hallucinations and deemed the conduct frivolous and sanctionable. Consequently, the court issued an order to show cause requiring counsel to submit an affirmation explaining why he should not be sanctioned in the amount of $3,000 for the inclusion of these fabricated authorities in his filing.
This case highlights the judicial intolerance for AI-generated hallucinations in court filings. It serves as a reminder that counsel bears personal responsibility for verifying the existence and accuracy of all cited authorities, regardless of the research tools employed.
Record details
What the record establishes about AI use
The court explicitly identified the citations as AI hallucinations.
Order to Show Cause issued by the Supreme Court of New York, Commercial Division, on May 1, 2026, regarding potential sanctions for defense counsel.
Correction behavior is not separately verified in the current record.
Tracked discrepancy record
2 citation, quotation, or authority issues are recorded in the source dataset.
- Fabricated: Case Law | Defense counsel cited "Gildea v Sheridan" in the opposition brief; the court found no such case and treated it as an AI-generated fabrication.
- Fabricated: Case Law | Defense counsel cited "Jones Wolf Realty v 2 E. 79th St. Corp." in the opposition brief; the court found no such case and treated it as an AI-generated fabrication.
Questions this record answers
- What happened in Drip Capital, Inc. v. SGM Socher Inc.?
- The court issued an order to show cause requiring defense counsel to explain why he should not be sanctioned $3,000 for citing two non-existent, AI-hallucinated cases in an opposition brief. The court explicitly identified the citations as frivolous and sanctionable conduct.
- Why does Drip Capital, Inc. v. SGM Socher Inc. matter for legal AI risk?
- This case highlights the judicial intolerance for AI-generated hallucinations in court filings. It serves as a reminder that counsel bears personal responsibility for verifying the existence and accuracy of all cited authorities, regardless of the research tools employed.
- What does the public record establish about Drip Capital, Inc. v. SGM Socher Inc.?
- The record summarizes the outcome described in the linked public source. The recorded document is hosted in the upstream publisher archive. This page is not a substitute for the complete docket, subsequent history, or jurisdiction-specific advice.
- Which source supports this Drip Capital, Inc. v. SGM Socher Inc. summary?
- The recorded source is Damien Charlotin case archive. It is classified as publisher document archive; review the linked material and subsequent docket history before relying on this summary.
Related matters
Related by court, jurisdiction, tool, or classified failure pattern. Similarity does not imply the same facts or outcome.