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Feb. 13, 2024 |  By: Rudi Keller - Missouri Independent

Missouri appeals court fines litigant after finding fake, AI-generated cases cited in filings

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By Rudi Keller - Missouri Independent

An O’Fallon man who used artificial intelligence to generate almost two dozen fake citations in a legal brief must pay $10,000 in sanctions for wasting the time of his courtroom opponents, the Missouri Eastern District Court of Appeals ruled Tuesday.

In a case that originated in St. Charles County, Jonathan Karlen was appealing a decision that he and other defendants must pay more than $311,000 to Molly Kruse, an employee of his company that created websites, for unpaid wages, interest and attorney fees.

Tuesday’s Eastern District decision, written by Judge Kurt Odenwald, found numerous errors in the appeal brief filed by Karlen, including omissions and formatting errors that would generally result in dismissal of an appeal. 

But the use of artificial intelligence, forcing opposing counsel to “expend more resources than necessary to decipher the record” warrants sanctions for filing a frivolous appeal, Odenwald wrote.

“Particularly concerning to this court is that appellant submitted an appellate brief in which the overwhelming majority of the citations are not only inaccurate but entirely fictitious,” Odenwald wrote. “Only two out of the twenty-four case citations in appellant’s brief are genuine.”

The court also took issue with the way Karlen, who filed the appeal without hiring an attorney, characterized the real cases and state statute cited in his brief.

“Throughout the appellate brief, appellant’s cited statutory and rule authorities do not state what appellant claims,” Odenwald wrote.

Kruse’s attorney, Bridget Halquist, said the fake citations were quickly identified during review of his appeal brief. Interns in her office assisted attorneys in searching every possible avenue to verify the cases, she said in an interview with The Independent.

The clues were in Karlen’s claims about what the cases said, Halquist said.

“He was making claims in his argument that just didn’t comport with the law,” she said. “So when we were wondering, you know, where did he get that?”

The case is the first appeals court case in Missouri that sanctions a party for creating fake citations using AI, said Jim Layton, an attorney from St. Louis who ran the appellate division of the attorney general’s office under Jay Nixon and Chris Koster. It is becoming an issue in other states, he said, so much so that some state bar associations are offering legal education in the correct and incorrect use of artificial intelligence.

“All of the things that I’ve seen that warned about using AI to write briefs, that comment about what AI can do with citations, this is a list of all of those problems,” he said. “Everything that AI could do wrong it did do wrong as to the citations in this brief.” 

In the lawsuit, originally filed in 2020, Kruse sought payment for promissory notes she received instead of a paycheck from Karlen’s company, Indigo Three Limited. Kruse was hired as creative director in 2015 but was not paid starting in May 2018. She was terminated by the company in October 2019.

The promissory notes carried interest rates of 7.5% and 8.25% and by October 2022,  With promised interest, the trial court found she was owed almost $73,000, plus $145,872 in damages because of a state law that triples the amount of unpaid wages.

None of that amount, or the almost $92,000 in attorney fees, has been paid.

Karlen could not be reached for comment.

Karlen’s use of artificial intelligence was discovered by Kruse’s attorneys, who asked that his original appeal brief be stricken from the record. In their initial reply, Kruse’s attorneys had already found that many cases he cited were fictitious and he violated other rules “in almost every possible material respect.”

Karlen, in his response, confessed that he had hired a legal consultant in California who promised to help for a fee that was less than 1% of what it would have cost him to hire a Missouri attorney.

“Unbeknownst to me that person used an artificial intelligence application to create the brief and the cases included in it were what has often being (sic) described as ‘artificial intelligence hallucinations,’” he wrote.”It was absolutely not my intention to mislead the court or to waste respondent’s counsel’s time researching fictitious precedent.”

The apology was good, Odenwald wrote, but insufficient to correct the errors.

“Appellant’s apology notwithstanding, the deed had been done, and this court must wrestle with the results,” he wrote. “Filing an appellate brief with bogus citations in this court for any reason cannot be countenanced and represents a flagrant violation of the duties of candor appellant owes to this court.”

Defendants who represent themselves on appeal often have errors in their briefs or misstate the law. That is not enough, generally, to impose sanctions, even if the case is dismissed.

The court clearly was upset by what it saw in the filings, said Chuck Hatfield, a Jefferson City attorney who also worked for Nixon in the attorney general’s office.

“It is rare for the court to award fees like this,” Hatfield said. “It signals that they were quite disturbed by the conduct.”

Misstating the law is never well-received in the courts, he said.

“AI has presented a new issue to worry about,” Hatfield said, “but courts have always required accuracy and candor.” 

The case could result in new court rules, said Mike Wolff, former Missouri Supreme Court chief justice.

“I could see the courts enacting rules that require lawyers and pro se litigants to verify all citations,” Wolff said, “and to identify any portions of their submissions that are generated by artificial intelligence or other non-human sources.”