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The sanctions record · United States District Court, Southern District of New York, 2026

Flycatcher v. Affable Avenue

Flycatcher Corp. Ltd and Flycatcher Toys, Inc. v. Affable Avenue LLC, et al., 24 Civ. 9429 (KPF) · Opinion and Order, Document 227 · District Judge Katherine Polk Failla · 5 February 2026

Opinion read in full, thirty-three pages; every quotation is from it. Source: the opinion as filed, obtained as a PDF from the AI Hallucination Cases document store.

The client lost the case for the lawyer’s citations. Counsel for one defendant filed a motion to dismiss brief with false citations, answered the court’s order to show cause with a submission that itself contained a false citation, and then filed a reply brief with more. The court found bad faith and sanctioned him under Rule 11 and its inherent powers by entering default judgment against his client, Affable Avenue LLC, and striking its motion papers. Opposing counsel was ordered to apply for attorney’s fees against him.

The record

  • CourtUnited States District Court, Southern District of New York
  • JudgeKatherine Polk Failla, District Judge
  • Case24 Civ. 9429 (KPF), trademark infringement and unfair competition claims by the Flycatcher toy companies against online sellers
  • Date5 February 2026
  • SanctionedSteven A. Feldman, counsel for Defendant Affable Avenue LLC, by a sanction entered against his client
  • The errorsIn the June 2025 motion to dismiss brief, opposing counsel identified at least thirteen cases that did not exist and eight real cases that did not contain the quotations attributed to them. At the hearing counsel corrected the court: “Fourteen out of 60 cited cases.” The response to the order to show cause, and the proposed reply brief, contained further false citations
  • ToolsNamed by counsel: vLex, which “includes some AI functionality”, and Paxton AI as a cite checker; NotebookLM for the response to the order to show cause
  • SanctionDefault judgment against Affable Avenue LLC; docket entries 153 through 156 struck. Damages to await the rest of the case
  • FeesOpposing counsel ordered to submit an application for attorney’s fees as to Mr. Feldman within 30 days, on the finding of bad faith and under 28 U.S.C. § 1927. The opinion fixes no amount
  • AuthorityFederal Rule of Civil Procedure 11 and the court’s inherent powers, on a finding of subjective bad faith

What the court found

The court said it does not oppose the use of AI in legal research and writing. What it would not accept was a lawyer who kept filing false citations because he would not check them:

“And while the Court does not oppose the use of AI to assist in legal research and writing, it must take a stand where, as here, counsel repeatedly files submissions with false citations because counsel refuses to verify those submissions.”

Counsel said he had found cases through search engines and then run them through AI tools for review. The court held that even on his own account he had violated Rule 11 by citing cases without reading them, and that being pressed for time was no excuse. On the client, it quoted the Supreme Court: each party “is deemed bound by the acts of his lawyer-agent”.

“If Mr. Feldman could not verify a citation, he should not have cited it.”

It found that he “either knew or was aware of the high probability that using AI as he did would generate faulty citations”, and that the court had explicitly warned him of that risk before he filed his response and his reply brief.

Why it matters

Three features travel. First, the cost fell on the client. A terminal sanction ended the client’s defence because of what its lawyer filed.

Second, AI checking AI was no verification. Running citations through a second AI tool did not count as reading them.

Third, warnings escalate. The court called the pattern, filing after filing and after its own warning, “a significant reason why the Court is defaulting his client”.

The lesson for the next filing

The court’s test was simple: was each authority read and confirmed before it was cited? Counsel could describe tools and steps, but nothing made at the time showed that any citation had been checked by a person before filing.

Regulayer™ creates checkable evidence of who approved exact words and when: which AI was used, what a named person reviewed, and the document it was sealed to, made at the time and verifiable free by the court without trusting the person who made it. It does not do the checking. It shows that the checking happened, and who stood behind it.

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Sources

Related

Checked against the opinion, read in full. Information, not legal advice.

Information, not legal advice. Every entry is verified against the court’s own document or contemporaneous reporting; where a source is reporting rather than the document, we say so.