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On June 11, 2026, the California Court of Appeal agreed that plaintiff’s attorneys should face monetary sanctions for “AI” errors in a wage-hour case. Quinteros v. Harbor Distrib., LLC, 121 Cal. App. 5th 60 (2026), affirmed a trial court’s monetary sanctions against attorneys for their misuse of generative artificial intelligence (“AI”) in a meritless pleading.

On September 2, 2026, the California Supreme Court denied the sanctioned attorneys’ petition for review and request for an order directing depublication of the Court of Appeal’s opinion. The attorneys’ errors will now be cited to warn others against using the same shortcuts.

1. Miscitation Of Cases, Fabrication Of Quotations, And Blatant Misrepresentation Of Authority By Plaintiffs’ Attorneys

In June 2024, Lipeles Law Group (“LLG”) filed a proposed wage-hour class action in the Los Angeles County Superior Court on behalf of Sonia Ascensao against Harbor Distributing, LLC (“Harbor”) and other entities. Just six months later, LLG filed a proposed wage-hour class action in the San Francisco County Superior Court on behalf of Jaime Quinteros against Harbor and other purported employer entities. Both complaints alleged “substantially similar” violations of California’s wage-and-hour laws.

Harbor moved to stay the San Francsico Quinteros suit on the grounds of “exclusive concurrent jurisdiction” – that the Quinteros suit is a “copycat” action of the earlier Ascensao suit in Los Angeles County. LLG opposed the requested stay. Harbor’s reply asserted that the opposition LLG filed on Quinteros’ behalf cited cases for principles that were the exact inverse of their true holdings, disregarded actual and relevant authority, and did not explain why LLG was prosecuting duplicative proposed class actions in two separate forums.

The San Francisco County Superior Court granted the stay but did not end it there. It also issued an order to show cause (“OSC”) regarding why the trial court should not impose monetary sanctions on LLG, jointly and severally, in the amount of $5,000 payable to the defendants and $1,000 payable to the court. The OSC contained a finding that LLG’s opposition brief contained non-existent legal citations and no fewer than eight fabricated quotations falsely attributed to real cases – fabrications the court found more “insidious” than outright hallucinated case citations, because the misstatements are harder to detect.

In response to the OSC, LLG’s handling attorneys filed declarations apologizing and explaining that the opposition had been drafted by a contract attorney whom they contracted with regularly, and from whom they received “solid and good quality” work in the past. LLG also stated that the contract attorney had assured that Lexis confirmed “every citation was a valid citation,” but qualified that he “had been experiencing ‘issues’ with Lexis.” In a separately filed declaration, the same attorney denied using any generative AI tools, and expressed that he was “surprised and deeply concerned” by the assertions in the OSC.

At the OSC hearing, an LLG associate explained that she reviewed the opposition for flow and completeness, but that she did not fact check or cite check it. The trial court noted that the contract attorney’s declaration did not acknowledge any mistake at all, made no effort to explain how it is that the brief contained fabricated quotations and “180 degree opposite” misrepresentations of the holdings of cases, and provided no apology.

LLG’s attorneys claimed ignorance and mistake of their own firm’s earlier Los Angeles filing. But Harbor’s attorneys informed the court they had met and conferred with LLG prior to the motion to stay as to why LLG was pursuing the duplicative action.

The trial judge remarked: “What is at issue . . . is not just monetary sanctions but reporting this matter to the State Bar. [¶] I see no way around that. . . . But, as I say, this is the most egregious example of misrepresentation of the law that I’ve ever seen.” The court opined, “It seems to me you basically abdicated your responsibility here . . . . [¶] It imposed additional costs on your opponent and on the court. This is a motion that never should have had to have been brought in the first place and that you had no good faith basis to oppose.”

The trial court took the OSC under submission. LLG then filed an additional declaration representing that the two separate lawsuits’ proposed classes are not the same, and that there would be a settlement pending of the earlier Los Angeles action that would not have covered all of the proposed class members in the later San Francisco action.

The trial court sanctioned LLG and its attorneys, in accordance with its OSC. LLG appealed and compounded its problems.

2. The Court Of Appeal’s Holding

The Court of Appeal affirmed, rejecting LLG’s arguments, that (1) the trial court violated Code of Civ. Proc. Section 128.7(c)(2)’s “safe harbor” provision, (2) the conduct did not merit sanctions, and (3) awarding sanctions payable to Harbor was improper because the sanctions arose from the trial court setting the OSC on its own motion.

Section 128.7(c)(2) provides, “On its own motion, the court may enter an order describing the specific conduct that appears to violate subdivision (b) [certifying the propriety of the filings and positions put before the court] and directing an attorney, law firm, or party to show cause why it has not violated subdivision (b), unless, within 21 days of service of the order to show cause, the challenged paper, claim, defense, contention, allegation, or denial is withdrawn or appropriately corrected.”

LLG argued the trial court denied its Section 128.7's safe harbor protection because: (1) the OSC never advised LLG of the 21-day withdrawal period LLG contends the statute requires; (2) the OSC hearing was set just three days after the tentative ruling, and sanctions issued only five days after that hearing, giving LLG less than 21 days to withdraw its opposition; and (3) the tentative ruling became final, "resolving" the motion and thereby precluding withdrawal.

LLG’s “safe harbor” argument was unpersuasive. The court held that LLG forfeited the “safe harbor” argument by failing to raise it in the court below – despite many chances to withdraw to correct its opposition to the motion to stay: after Harbor’s reply; after a tentative ruling published by the trial court; and at the time LLG’s attorneys submitted its declarations responding to the OSC. Instead, LLG stipulated to the ruling on the motion and insistently denied awareness of the prior Los Angeles lawsuit.

On the merits of the sanctions, applying an abuse-of-discretion standard, the Court of Appeal held that filing a brief with fabricated legal authority is sanctionable, finding LLG's opposition both factually groundless and legally frivolous. The court rejected LLG's attempt to shift blame to the contract attorney. Counsel of record bears ultimate responsibility for a brief's accuracy, and attorneys cannot delegate to any technology their duty to verify citations.

Moreover, the Court of Appeal found that the $6,000 joint-and-several sanctions were not excessive compared to awards in similar cases involving misuses of AI.

The Court of Appeal similarly held that LLG forfeited its challenge to the sanctions paid to Harbor, because LLG failed to timely object in the proceedings below, and because LLG’s appellate argument was conclusory.

The judgment was affirmed, with costs to Harbor. On September 2, 2026, the California Supreme Court denied LLG's petition for review and request for depublication, leaving the opinion as citable authority.

3. Practical Considerations

The Quinteros Court of Appeal opinion reinforces the well-known practice of courts to sternly punish attorneys’ negligent reliance on generative AI in court submissions. Any attorney using AI to assist with or perform legal work who does not verify all authorities cited by the program risks sanctions, state bar discipline, and/or adverse rulings from a court. Attorneys signing any court submission remain ultimately responsible for the contents, even when drafted by contract attorneys. The use of citation check software, even if it does not rely on AI, does not satisfy attorneys’ professional duties.

They also evidence some courts’ growing intolerance of recycled and boilerplate wage-hour suits brought despite little-to-no factual and procedural investigation. It would not be surprising if the published decision is cited in a challenge to the sanctioned attorneys’ adequacy to represent a class.

Finally, the opinion serves as a reminder that arguments must be raised in the trial court lest they be forfeited on appeal.

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About The Author

Richard Azada is an attorney in the law firm of Sheppard, Mullin, Richter & Hampton LLP in Los Angeles. His practice focuses on complex and high-stakes areas of employment law. He has extensive experience representing employers of all sizes in workplace law matters, including defending clients in discrimination, retaliation, harassment, and wage and hour actions.

Mr. Azada received his BA from University of California, Riverside and his law degree from Southwestern Law School, where he was a student editor for the Journal of International Media & Entertainment Law. Rich worked as an intern for the Labor Relations Division of the Los Angeles City Attorney and a major music record label. Rich also served as an extern for the Honorable Kirk H. Nakamura, Superior Court of California, County of Orange.