Law360 (July 17, 2026, 4:41 PM EDT) -- The Seventh Circuit has admonished but declined to sanction an attorney for a brief that included what a judge called "an astonishing number of erroneous and even hallucinated citations."

In an opinion Thursday, U.S. Circuit Judges Michael B. Brennan and Michael Y. Scudder Jr. declined to strike a brief or impose sanctions on Paul M. Bach of Bach Law Offices Inc. over errors in a matter related to interest rates in a consumer bankruptcy case.

Judge Scudder wrote that over three months after oral arguments, appellant Bernardo Romero filed a motion to strike portions of Corona Investments LLC's appellee brief and, in the alternative, moved for sanctions over quotations alleged to be caused by artificial intelligence hallucinations.

"As Romero candidly acknowledges, any errors may reflect a lack of care on Corona's part, but they did not materially affect the presentation of the appeal," Judge Scudder wrote. "Suffice it, then, to lodge a general reminder that the court expects members of our bar to exercise care and diligence in preparing their briefs to ensure complete factual and legal accuracy."

In his dissent, U.S. Circuit Judge David Hamilton had harsher words for Bach and Corona. He said Corona's briefing in the case included "an astonishing number of erroneous and even hallucinated citations" and while they didn't affect the majority's resolution of the case, "the sloppy errors" by Bach made the court's work more difficult.

"We should expect and insist on better, more professional performance," Judge Hamilton said. "Sanctions like those we have imposed in other recent cases involving hallucinated citations from generative artificial intelligence would be appropriate here, regardless of the precise reasons for the many errors."

Romero moved to strike citations from Corona's reply brief that he said appear to be AI hallucinations on June 1, months after oral argument on Feb. 13. Among the possible AI hallucinations Romero flagged were phantom quotations, false citations to cases not cited by the bankruptcy court, and misattributions of authority.

"The problems described here do not materially impact the merits of this appeal, in our view," Romero said. "And, we assume, many of the errors identified above were due to simple carelessness, though we do not condone such errors. But the phantom quotes — whether due to artificial intelligence or otherwise — are more concerning and, we believe, warrant inquiry by this court."

In a June 10 filing, Bach and Corona admitted to errors including incorrect case citations and drafting errors, not hallucinated citations. They also said two case citations weren't in the draft versions of the brief, but somehow, the proper cases got swapped with cases from another brief while creating the table of authorities.

Bach and Corona did dispute some claims from Romero about improper quotations and citations and their holdings. They argued Romero's motion and argument were an attempt to refocus the argument and to have a chance to re-argue the briefs and oral arguments.

"Even taken together, these citation errors did not create substantive error," Bach and Corona said. "Nothing was misleading, and the law was not misstated in appellee's brief. The errors were not artificial intelligence 'hallucinations.' The undersigned law office checks every citation through LexisNexis using several methods and two attorneys. The final step is pulling citations into a table of authorities. None should have changed in that final step; somehow, and embarrassingly, they did change from the final word brief to the finished product."

Bach and counsel for Romero did not immediately respond to requests for comment Friday.

U.S. Circuit Judges Michael B. Brennan, Michael Y. Scudder Jr. and David Hamilton sat on the panel for the Seventh Circuit.

Romero is represented by Robert V. Schaller of Schaller Law Firm.

Corona is represented by Paul M. Bach of Bach Law Offices Inc.

The case is In the Matter of Bernardo Romero, case number 25-2021, in the U.S. Court of Appeals for the Seventh Circuit.

--Editing by Janice Carter Brown.

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