Law360 (August 21, 2026, 4:47 PM EDT) -- A Florida attorney is the latest to be sanctioned for his use of artificial intelligence, after a Florida state appeals court found Friday that his filings contained at least 46 hallucinations.

Kenneth H. Keefe of South Pasadena was slapped with a $1,500 fine and a bar referral and must personally pay his opposition's attorney fees incurred for responding to his filings.

Judge Susan H. Rothstein-Youakim wrote for a three-judge panel that it "defies belief" for an attorney to plead ignorance of the risks of using generative AI without double-checking the material.

"And yet here we are. Attorney Keefe used a generative AI tool from the beginning of this appeal without any apparent guardrails," the panel said, adding that Keefe's "original initial brief was replete with nonexistent quotations and purported statements of law with wholly inaccurate cites."

Keefe told the court he "did not fully appreciate that such tools can generate inaccurate or nonexistent citations."

In its decision Friday, the panel said Keefe's arguments for his client, Capital Standard, lacked merit, and it affirmed a lower court's ruling in favor of U.S. Bank National Association without further comment.

The panel also sanctioned Keefe for his "rampant use of hallucinated citations to legal authority" in his amended initial brief and reply brief.

It said that once briefing was complete, it "very quickly" determined that there was "almost nothing trustworthy about Capital Standard's legal representations on appeal."

In response, the court issued a show-cause order to Keefe, which he ignored, the panel said. He bypassed his Jan. 12 deadline before finally filing a short, unsworn response on Feb. 23, according to the ruling.

"He made no effort at that point to comply with the January 8 order other than to claim generally that he had not known that generative AI could produce bogus results." the ruling said.

In his response, Keefe said he did not have an explanation as to how the order to show cause was missed and, in preparing portions of his filings, he used AI as a "supplemental research tool."

"Because the bulk of attorney Keefe's legal argument in the offending filings is based on hallucinated authority, it is obvious to us that generative AI was not merely attorney Keefe's 'supplemental research tool,' as he claims, but his primary or only one," the panel said.

It added that Keefe said he set up an "unspecified processes" to ensure it wouldn't happen again, but never apologized for wasting both the court's and U.S. Bank's time and resources.

"Rather than immediately fall on his sword, he ignored us for more than a month and responded only after we issued a new order directing that his clients be informed of the situation. We find neither his explanations satisfactory nor him apologetic, but even if we did, on this record, we would sanction him nonetheless," the panel said.

Keefe did not respond to a request for comment Friday. Representatives for Capital Standard and for U.S. National Bank could not be reached for comment.

Capital Standard is represented by Kenneth H. Keefe of the Keefe Law Firm PA.

U.S. National Bank is represented by Kathleen D. Dackiewicz, Sara F. Holladay and Emily Y. Rottmann of McGuireWoods LLP.

The case is Capital Standard LLC et al. v. US Bank National Association et al., case number 2D2024-1392, in the Second District Court of Appeal of the State of Florida.

--Editing by Adam LoBelia.

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