Case of the Month People v. Alvarez

Artificial Intelligence (AI) has entered nearly every profession, but in this case, it walked straight into a courtroom and caused real trouble. Indeed, the attorney in this case used AI to prepare a brief and did not verify the information. The result, his arguments contained citations to cases that do not exist, in AI terminology a “hallucination”.

This is not just a minor faux pas, as the rule is clear under California’s Business and Professions Code section 6068 and the State Bar Rules of Professional Conduct: attorneys must verify all legal sources and cannot “knowingly misquote” authority. As a result, the Fourth Appellate District found that the attorney failed in this duty after admitting he didn’t check citations generated by artificial intelligence. The court issued sanctions against him in the amount of $1,500 and reported the matter to the State Bar.

The analysis reveals the growing pains of the AI era. The attorney used AI tools to speed up drafting, which is allowable, but didn’t confirm the cases actually existed. The court emphasized that AI is not forbidden, but lawyers must “trust but verify.” In one passage, the judges noted that using AI is not inherently unethical, but failing to check its work is.

For real estate professionals and consumers, this ruling has a broader message. Whether drafting contracts, disclosures, or even marketing language, AI tools are only as reliable as the human using them. This case is a reminder that due diligence still matters, even in the age of automation.