Versant Funding v. Teras Breakbulk Ocean Navigation Enterprises
S.D. Florida · May 20, 2025
- Jurisdiction
- federal
- Court
- S.D. Florida
- Record ID
- versant-funding-v-teras-breakbulk-ocean-navigation-enterprises-2025-05-20
- Observed outcome
- The Court ordered the attorneys to pay the Plaintiff's attorneys' fees and costs incurred in addressing the hallucination, imposed a $1,000 fine on pro hac vice counsel and a $500 fine on local counsel, and mandated completion of CLE on AI ethics.
- Known monetary consequence
- $1,500
Why this matter warrants attention
The Court sanctioned two attorneys for submitting a hallucinated case citation generated by AI. The sanctions included joint and several liability for the opposing party's fees and costs, a $1,500 total fine payable to the Court, and a mandatory CLE requirement on AI ethics.
The Court distinguished this case from more egregious incidents (O’Brien v. Flick, Thomas v. Pangburn) because the attorneys admitted their error and did not lie or attempt to cover it up. However, the delay in correction and failure to check the citation in the first place were serious enough to warrant monetary penalties and educational obligations
Local counsel who signs without checking is jointly liable; require both drafting and signing counsel to verify citations.
Failure modes and consequences
- Fake Citations
- Contract
- Trial
- Monetary
- AI attribution
- Admitted
- Recorded tool
- Unspecified AI tool
- Known monetary consequence
- $1,500
- Procedural posture
- Sua sponte order imposing sanctions following a motion hearing regarding a fabricated case citation.
Damien Charlotin case archive
Publisher document archive. The recorded document is hosted in the upstream publisher archive.
Open underlying sourceA recorded source link is not a substitute for checking the underlying order, filing, opinion, or disciplinary record.
What this record does—and does not—establish
Counsel admitted using an unspecified AI tool.
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.
Latest evidence review: Primary Document Verified (high confidence).
Controls suggested by the public record
- Verify the existence, citation, court, and precedential status of every authority before filing.
- Escalate unresolved verification failures before filing and preserve the responsible reviewer's signoff record.
- Read the linked source and subsequent docket history before relying on this record for legal work.