Oregon Appellate Court Sanctions Lawyer with $10K Fine for AI-Hallucinated Brief Citations

Published
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15

Why it matters

The Oregon Court of Appeals has sanctioned Salem attorney William Ghiorso with a $10,000 fine for submitting an opening brief containing at least 15 fabricated case citations and 9 nonexistent quotations. The court attributed the errors to AI "hallucinations"—instances where generative AI generated convincing but false legal information. The penalty marks the first time an Oregon appellate court has considered attorney fees as a sanction alternative to fines, though it ultimately imposed the monetary penalty after Ghiorso implemented new safeguards.

The court discovered the fabrications while preparing for oral argument and questioned Ghiorso on the record. Ghiorso maintained an existing no-AI drafting policy in his office but acknowledged that staff members had used the technology despite the prohibition. The exact filing date remains unspecified, but the court applied a precedent-setting formula derived from Ringo v. Colquhoun Design Studio, LLC (2025), calculating sanctions at roughly $500 to $1,000 per AI error. A potential minimum sanction would have reached $16,500; the court reduced the award to $10,000.

The decision arrives amid escalating judicial scrutiny of AI misuse in legal practice. Oregon has seen rising sanctions for AI errors, including federal penalties exceeding $100,000 in Green Building Initiative v. Peacock (2025). The Ghiorso case is now cited as a benchmark formula in federal rulings and underscores a critical vulnerability: even offices with explicit anti-AI policies remain exposed to hallucinations that evade quick verification. Attorneys should treat this as a floor, not a ceiling, for potential exposure and should implement verifiable controls over generative AI use by all staff members.

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