Welcome back to the newsletter dedicated to the evolving relationship of artificial intelligence and law.

What you need to know this week:

1. NY lawyer faces sanctions hearing for using fake chatbot cases in legal brief

2. Overview of AI legislation affecting employers in five jurisdictions

3. US officials divided on regulating AI tools, as EU proposes strong measures for generative AI

4. Federal judge in Texas cracks down on AI-generated legal filings, requires human verification

5. This week’s tech spotlight [1] [2] [3]

Let’s jump in. [2-3 min read]

1. NY lawyer faces sanctions hearing for using fake chatbot cases in legal brief

• A NY attorney used ChatGPT for legal research in a case against Avianca airlines. Judge Kevin Castel of the Southern District of New York found six fake cases with bogus citations in the attorney’s brief, all sourced from ChatGPT.

• The attorney is facing a sanctions hearing on June 8 for his use of a false and fraudulent notarization in an affidavit filed on April 25.

• The six fake cases cited were “Varghese v. China South Airlines, Martinez v. Delta Airlines, Shaboon v. EgyptAir, Petersen v. Iran Air, Miller v. United Airlines, and Estate of Durden v. KLM Royal Dutch Airlines.”

• The attorney claimed he had never used ChatGPT before and apologized for using generative artificial intelligence.

• ChatGPT responded to the attorney’s inquiries about the authenticity of the cases, claiming the cases were real and could be found in reputable legal databases.

• Avianca's lawyers alerted the court that the captions did not exist, resulting in an order to show cause from U.S. District Judge P. Kevin Castel of the Southern District of New York.

• Read more here

• Read the order to show cause from SDNY here

2. Overview of AI legislation affecting employers in five jurisdictions

• AI is becoming increasingly popular in employment and is drawing attention from state legislatures and the White House.

• Legislative proposals related to AI are emerging in several jurisdictions, including Massachusetts, New York, New Jersey, Vermont, and Washington, D.C., and are rapidly evolving.

• Each of the proposed laws would require an impact assessment or analysis to be conducted by the employer deploying an AI tool or the vendor developing and selling the AI tool in the case of New Jersey.

• Most of the proposals require notice to individuals who will be subject to an AI tool's decision making to provide transparency and allow applicants and employees to understand how the tool will assess them.

• The scope of these proposed laws is often much broader than existing laws, covering employment decisions ranging from compensation to task allocation to termination.

• Employers operating across jurisdictions should keep up with these developments and prepare to comply with potentially forthcoming requirements.

• California has proposed a temporary moratorium on the training of AI systems more powerful than GPT-4 to allow time for AI governance systems to catch up. Read the proposed moratorium here.

• Read the full report from Gibson Dunn here

3. US officials divided on regulating AI tools, as EU proposes strong measures for generative AI

• Biden administration officials are divided on how harshly to regulate new artificial intelligence tools. Some US national security officials and State Department officials believe that strong regulation will put the US at a competitive disadvantage, while others support the European Union's strong measures for AI products such as ChatGPT and Dall-E.

• The European Union is proposing that developers of AI tools comply with a host of regulations, such as requiring them to document any copyrighted material used to train their products and more closely track how that information is used.

• The US has not been able to provide a coherent response to the EU's plan to subject generative AI to additional rules, due to the dissonance among officials.

• The release of ChatGPT has made broader risks more apparent, and the European Parliament has proposed new rules that specifically target the foundation models used for generative AI.

• The EU is expected to dictate how tech giants, including Microsoft and Google, develop the foundation models that underpin the next frontier of artificial intelligence, making its decision on how to regulate AI arguably more important than the debate in Washington.

• The stakes are high in AI, and there is a need to address the associated risks of generative AI, according to a draft obtained by Bloomberg.

• The revised AI Act could get a vote in parliament in June, ahead of final negotiations with the EU's 27 member states.

4. Federal judge in Texas cracks down on AI-generated legal filings, requires human verification

• A federal judge in Texas is requiring lawyers to certify that they did not use artificial intelligence to draft their filings without human verification.

• The judge created the requirement to warn lawyers about the potential for AI tools to create fake cases and could sanction them if they rely on AI-generated information without verifying it themselves.

• The notice on the court's website stated that generative AI tools like ChatGPT are prone to hallucinations and bias, and should not be used for legal briefing.

• The judge considered banning the use of AI in his courtroom altogether but decided against it after conversations with a law professor at UCLA and others.

• This requirement comes after another federal judge in Manhattan threatened a lawyer with sanctions over a court brief that included citations to bogus cases generated by ChatGPT. See the first article above for more.

• Read more here

This week’s top tech

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If you’d like to sponsor an edition of the AI Verdict, please reach out via [email protected]

See you next Friday.