What happened

The plaintiff bought a cannabis edible from a licensed retailer run by VMK, Inc. and sued for intentional fraud and unfair competition. He alleged the salesperson gave wrong dosing instructions and said the product would ease his anxiety without a "high." The trial court sustained VMK's demurrer without leave to amend because he did not allege facts showing the salesperson knowingly deceived him.

On appeal, he argued that VMK's conduct during the litigation could show it knew its earlier statements were false. To support that, he cited "People v. Sokolow (1993) 12 Cal.App.4th 347" for the idea that litigation conduct shows "a consciousness of guilt, is reckless, and is highly probative of scienter." He also cited two real cases, Engalla and Oregel, for the idea that fraudulent intent can be inferred from circumstantial evidence.

The court also noted that the citation he gave for Oregel in his opening and reply briefs was incorrect, and it used the correct one. The opinion does not say whether he used AI, and the tracker's "implied AI" label is an inference, not a finding in this record.

What the court said

The court's treatment of the fake case is short. It wrote that the plaintiff "cites a case that does not exist, People v. Sokolow (1993) 12 Cal.App.4th 347" (opinion p. 12). It did not stop there on the merits: it found that Engalla and Oregel were "inapt," because neither supports the idea that conduct during later litigation shows what a defendant knew when it spoke.

The court also reviewed the documents the plaintiff said showed a pattern of intentional deception. It found they were disciplinary records about the salesperson's attendance and work performance, with nothing on giving customers wrong information about cannabis effects or dosage. It held the complaint did not plead scienter, that the unfair competition claim failed with the fraud claim, and that he had not shown how amendment could cure the defects. The judgment was affirmed and VMK was awarded appellate costs. The opinion is marked not to be published.

What it means for your firm

  • A nonexistent case can show up in an appellate brief, not just a trial filing, and a court can call it out in a short passage of the opinion without any sanctions proceeding.
  • The court did not sanction anyone here. Our reading: a pro se party who loses on the merits may also lose credibility on every other authority in the brief, which matters if your firm is the respondent and wants the court to read the other side's citations skeptically.
  • If you represent a respondent, a fast cite-check of the opposing brief is worth doing before you write the response. Here the court found the fake case and the mis-cited real one on its own review.
  • Our reading: the opinion is unpublished, so under California Rules of Court rule 8.1115 it cannot be cited, but it shows what a panel noticed and how it wrote about it.
  • Do not assume the court will say "AI." This opinion describes the problem as a case that does not exist and says nothing about the tool.

What to do Monday

  1. Add a step to your respondent-side workflow to pull and read every case in the opposing brief, including the ones cited for general propositions.
  2. When you find a nonexistent case, record the exact citation and the proposition it was offered for, so you can point to both in your brief.
  3. Check whether the real cases the other side cites say what the brief claims, since this court found Engalla and Oregel did not support the argument.
  4. Note in your own filings that unpublished California opinions cannot be cited, and do not rely on this one as authority.

Sources

Questions and answers

Did the court sanction the appellant for citing a fake case?

No. The opinion identifies the case as nonexistent and rejects the argument, but it orders no sanction. The only costs award is appellate costs to VMK as the prevailing party.

Did the court say AI created the citation?

The opinion does not say. It states only that the cited case "does not exist." It does not discuss how the citation was produced.

Why did the plaintiff lose the appeal?

The court found he did not plead facts showing the salesperson knew her statements were false, which is required for intentional fraud. His unfair competition claim depended on the same allegations, so it failed too, and he did not show how he could fix the complaint by amending it.

Operational information, not legal advice. Facts come from the court record linked under Sources, read on Oct 21, 2026. The reading of what it means for your firm is ours. A source link does not replace the full docket or later history.