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Today’s guest post is from Dechert‘s Mary Kim. She takes a closer look at a case where plaintiff’s use of AI landed them in hot water and how defendants can make the most of these situations. As always our guest posters deserve 100% of the credit (and any blame) for their writings.

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The existing commentary on the growing epidemic of artificial intelligence (“AI”) hallucinations in legal filings has largely focused on the forest—the staggering and accelerating volume of cases, along with the inadequacy of existing sanctions.  All of that commentary is correct, and the numbers are genuinely alarming.  But sometimes, it is worth stepping back and looking carefully at a single tree. 

On March 2, 2026, this blog’s modest proposal on the abuse of AI issues mentioned the LeDoux v. Outliers, Inc. case.  No. 3:24-CV-05808-TMC, 2026 WL 291023 (W.D. Wash. Feb. 4, 2026).  This case is one of those cases that warrants a closer read.  Not because it involves a single rogue citation slipping through the cracks, but because of the sheer breadth, variety, and audacity of the errors catalogued in the court’s opinion.  Reading the opinion carefully is a useful exercise because it illustrates just how many ways AI hallucinations can infect a case, and just how difficult the cleanup can be once the infection has spread.

The LeDoux case is a case involving allegedly defective nootropic (cognition improving) supplements.  The plaintiff, a medical nurse officer in the United States Army, sued the defendants, various entities and individuals involved in the design, manufacture, and sale of the nootropic supplements at issue, for negligence, unfair trade practices, failure to warn, design and manufacturing defect, breach of warranty, and misrepresentation and fraud in the Western District of Washington.  Plaintiff alleged that defendants’ nootropic supplements were adulterated with amphetamines, causing her to test positive on a military drug screen, which triggered a felony court-martial prosecution and resulted in the destruction of her military career, loss of her pensions and benefits, and severe emotional harm.  The legal and factual issues, however, were quickly overshadowed by something else entirely.  

Defendants identified multiple citations in plaintiff’s proposed amended complaint, Daubert motion, motion to strike affirmative defenses, expert evidence, and response to defendants’ motion to strike experts, which they believed to be false and hallucinated by AI.  All told, these AI hallucinations spanned more than five separate filings.  And the defense did not just flag the problem in a footnote.  They did the work and provided various tables for the court describing the faulty citations.  That kind of methodical, document-by-document, citation-by-citation opposition work is what turned a case about supplements into a case about professional misconduct. 

The breadth of what defense counsel uncovered is worth going through carefully, because it illustrates how thoroughly AI-generated sloppiness can permeate a plaintiff’s entire case.  Plaintiff’s proposed amended complaint quoted text from a statute, RCW 7.72.010(2), that did not exist.  For example, plaintiff alleged that a defendant “performed functions that constitute manufacturing activity within the meaning of RCW 7.72, including ‘supplying a component part,’” but the term “supplying a component part” did not exist in RCW 7.72, and the definition of “manufacturer” in RCW 7.72.010(2) did not include someone who “supplies” a component part.  Id. at *1. 

Plaintiff also submitted over a dozen quotes from various expert reports that did not exist.  For example, plaintiff cited the deposition of one of her experts to argue that dietary supplements are uniquely prone to “post-production degradation of stimulant compounds,” but that quote did not appear anywhere in the deposition transcript.  Id. at *2.  Plaintiff also cited nonexistent cases and included quotes from other cases that did not exist in the cited cases.  Each of these was caught by defense counsel checking the actual sources.

Perhaps the most strategically significant finding for defense purposes involved hallucinations in plaintiff’s expert reports (something we’ve also addressed).  One expert report cited several articles that did not exist or were attributed to the wrong author, and another expert report cited the same articles and included the same citation errors.  The court found this “suggest[ed] [p]laintiff’s counsel may have been so involved with the drafting of expert reports as to ‘jeopardize the experts’ independence.’”  Id. (citation omitted).

The cleanup, or attempted cleanup, made matters worse.  Plaintiff’s counsel conceded that some citations were incorrect and tried to address the errors, but, as the court noted, “[h]er explanations and corrections [were] incomplete at best and misleading at worst.  Plaintiff’s ‘corrected’ Daubert motion replaced some false quotations with real ones, but in doing so, completely changed their meaning.”  Id. at *3.  For example, the original filing stated that dietary supplements are uniquely prone to “post-production degradation of stimulant compounds.”  The correction substituted: “based on the literature, there is known degradatory properties to amphetamines over time.”  Id.  These are not the same proposition.  The correction did not fix the error; it substituted a different point that happened to have a real citation behind it, which raised its own questions.  Similarly, plaintiff’s counsel stated that she cited In re Washington Mutual “for the wrong proposition” and suggested she had “considered citing” it for a proposition relating to negative causation, which differed significantly from her original use of the case to argue that an “unclean hands” defense is only available when a plaintiff seeks equitable relief.  Id.

Finding that plaintiff had “submitted dozens of inaccurate factual and legal citations across at least five different filings,” and that “erroneous citations suggest[ed] [p]laintiff’s counsel submitted these filings without ‘conduct[ing] a reasonable inquiry into the facts and the law’ as required by Rule 11(b),” the court ordered plaintiff’s counsel to show cause why she should not be sanctioned.  Id. (citation omitted). Plaintiff’s counsel responded to the order with admissions of non-compliance with Rule 11, acknowledging that certain citations were incorrect.  It remains to be seen what sanctions, if any, the court will impose.  

AI hallucinations are not just an abstract ethics problem.  They can be an opportunity.  The LeDoux case is the clearest illustration yet of what happens when defense counsel is paying attention and plaintiff’s counsel is not.  The errors were there.  The defense found them.  And the court acted.  With that in mind, here is what defense counsel should take from LeDoux.  None of these principles are novel; rather, they are the fundamentals.  But LeDoux is a useful reminder that the fundamentals, overlooked by one side and embraced by the other, are what this entire case turned on.

  1. Check every citation in every brief plaintiff files.  It takes time, but as LeDoux demonstrates, the payoff can be substantial—not just in getting bad arguments struck, but in triggering Rule 11 scrutiny that reframes the entire litigation dynamic.
  2. Build a record of the errors methodically.  Defense counsel here did not just tell the court there were problems.  They provided tables cataloging the faulty citations filing by filing, giving the court everything it needed to issue a detailed show cause order.  That kind of organized presentation is what converts a discovery of errors into a litigation weapon.
  3. Watch the cleanup as carefully as the original filing.  When opposing counsel tries to walk back errors, the manner of the correction is itself important.  Substituting a different proposition for the fabricated one rather than acknowledging the original proposition was unsupported is exactly the kind of misleading correction that compounds the original Rule 11 violation.
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Rule 32(a)(3) of the Federal Rules of Civil Procedure provides:  “An adverse party may use for any purpose the deposition of a . . . designee under Rule 30(b)(6).”  Does that imply the converse – that a corporation’s affirmative use of its own Rule 30(b)(6) witness’ testimony is prohibited?  This issue came up at a conference we recently attended, so we decided to take a look.

The answer appears to be no.  Almost all federal courts allow corporations in litigation to use the testimony of their own 30(b)(6) witnesses as affirmative evidence in their own cases in chief, as long as the testimony otherwise meets the usual evidentiary requirements.  That was the case in Vehicle Market Research, Inc. v. Mitchell International, Inc., 839 F.3d 1251 (10th Cir. 2016), where the court affirmed the defendant’s use affirmative use of the testimony of its own 30(b)(6) witness, even though it was arguably contradictory of prior testimony.  Both the affirmative use of the testimony, and subsequent cross-examination, were proper under the Rule.  Id. at 1258-59.

The implied converse procedural argument mentioned above was rejected in Patsy’s Italian Restaurant, Inc. v. Banas, 508 F. Supp.2d 194 (E.D.N.Y. 2007):

Plaintiffs misinterpret the Federal Rules of Civil Procedure in objecting to the use of the deposition testimony of defendants’ officers . . . in support of defendants’ summary judgment motions, arguing that such testimony cannot be used at trial.  [Rule 32] does not prohibit a party from submitting the deposition testimony of its own officers on a summary judgment motion, particularly when such testimony was taken by the adverse party, as was the case here.  Plaintiffs’ objection is therefore overruled.

Id. at 200 n.3 (citations omitted).  Another more recent discussion is in Tijerina v. Alaska Airlines, Inc., 2024 WL 270090 (S.D. Cal. Jan. 24, 2024), also confirming that a corporation can use its own designee’s testimony affirmatively – so long as it is otherwise admissible:

FRCP 30(b)(6) designees may not, however, offer testimony at trial that consists of hearsay not falling within one of the authorized exceptions.  And the exceptions . . . do not apply when an organization wishes to elicit testimony from its own corporate designee. . . .  [W]here testimony is not sought by the adverse party, a corporate representative may not testify to matters outside his own personal knowledge. . . .

Tijerina v. Alaska Airlines, Inc., 2024 WL 270090, at *2 (S.D. Cal. Jan. 24, 2024) (citations and quotation marks omitted).  See IA Collaborative, LLC v. Fathom Loop, LLC, 2024 WL 2938856, at *4 (N.D. Ill. June 11, 2024) (rejecting “the proposition that a party cannot use its own Rule 30(b)(6) witness’s testimony at summary judgment”); McGriff Insurance Services, Inc. v. Madigan, 2022 WL 16709050, at *1 (W.D. Ark. Nov. 4, 2022) (denying blanket objection to use of 30(b)(6) testimony; “30(b)(6) deposition testimony could be presented by a non-adverse party at a hearing as long as . . . it’s based on [the deponent’s] personal knowledge”); Abbott Laboratories v. Feinberg, 2020 WL 7706571, at *1 (S.D.N.Y. Oct. 15, 2020) (allowing trial testimony of corporation’s own 30(b)(6) witness about “(1) items within her personal knowledge and (2) information she learned from [that party’s] business records”); In re RFC & RESCAP Liquidating Trust Action, 2020 WL 504661, at *6 (D. Minn. Jan. 31, 2020) (trial testimony of corporate designee admissible when offered by the corporation “[t]o the extent that such information is within [the designee’s] knowledge”); Stryker Corp. v. Ridgeway, 2016 WL 6585007, at *2-3 (W.D. Mich. Feb. 1, 2016) (corporate designee could testify at trial “based on personal knowledge and not on hearsay, or that an exception to the hearsay rule applies”); Dodson Aviation, Inc. v. HLMP Aviation Corp., 2011 WL 1234705, at *10 (D. Kan. March 31, 2011) (rejecting argument that Rule “32(a)(3) prohibits a corporation from introducing into evidence at trial its own 30(b)(6) deposition”).

Conversely, numerous cases limit the scope of what 30(b)(6) witnesses may testify to when later called at trial to otherwise admissible matters.  Union Pump Co. v. Centrifugal Technology, Inc., 404 F. Appx. 899, 903-04 (5th Cir. 2010) (corporate representative testimony at trial properly improperly included both “rank hearsay” and matters outside personal knowledge); Kraft Foods Global, Inc. v. United Egg Producers, Inc., 2023 WL 5647204, at *11 (N.D. Ill. Aug. 31, 2023) (“the Federal Rules do not include any express lane for Rule 30(b)(6) depositions of non-parties when the witness lacks personal knowledge”); Hess v. Biomet, Inc., 2019 WL 5965172, at *6 (N.D. Ind. Nov. 13, 2019) (corporate party could use its own 30(b)(6) testimony at trial, but that testimony “will still have to comply with the rules of evidence in order to be admitted”); TIG Insurance Co. v. Tyco International Ltd., 919 F. Supp.2d 439, 454-55 (M.D. Pa. 2013) (similar result allowing 30(b)(6) witness only to testify to events occurring after he was hired by the corporation).  Thus, the general rule is that corporations may offer their own 30(b)(6) witness’ testimony at trial, but only to the extent that – like any other proffered testimony – it is otherwise admissible, the chief obstacles seen in the caselaw being personal knowledge and hearsay.

Moreover, whenever the adverse party seeks to use portions of a 30(b)(6) deposition, Rule 32(a)(6) provides that “any party,” including the designating corporation “may itself introduce any other parts” of the same 30(b)(6) deposition.  In that situation, the corporation has free reign to introduce any otherwise admissible portions of the same deposition.  E.g., Gustilo v. Hennepin Healthcare System, Inc., 2025 WL 1639689, at *3 (D. Minn. June 10, 2025) (under Rule 23(a)(6), the corporation “may itself introduce any of its counter-designations, regardless of any fairness consideration”).

We caution, however, that corporations seeking to use their designees as live witnesses at trial should consider that doing so may expose that witness/designee to cross-examination about anything in the prior 30(b)(6) deposition, regardless of personal knowledge.

Although there is no rule requiring that the corporate designee testify “vicariously” at trial, as distinguished from at the rule 30(b)(6) deposition, if the corporation makes the witness available at trial he should not be able to refuse to testify to matters as to which he testified at the deposition on grounds that he had only corporate knowledge of the issues, not personal knowledge.

Brazos River Authority v. GE Ionics, Inc., 469 F.3d 416, 434 (5th Cir. 2006).

Another subsidiary point that came up in our research is that a party cannot both use a designee’s 30(b)(6) deposition transcript and also call the same person as a live witness.  E.g., Martinez v. Continental Tire, LLC, 2022 WL 2788068, at *2 (D.N.M. July 16, 2022).  With the same witness appearing live, the deposition, generally speaking, becomes hearsay.

Thus, it appears that Rule 32(a)(3) does not impose any additional implicit obstacle to a corporation’s subsequent reliance on the testimony of its own 30(b)(6) witnesses.  To the extent the same testimony would be admissible when offered by a non-designee, it is also admissible when given by a 30(b)(6) corporate designee.

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We almost never post on securities decisions, but we’re making an exception today. Our readers know that the initiation of MDLs and state court coordinated proceedings—often loaded with unvetted and bogus claims—can drive down defendants’ stock prices. When that happens the plaintiffs’ class action bar swoops in and files securities class actions, essentially trying to make the same defendant pay twice for the same claims.  Call it the “unholy alliance.” Today’s decision (another one arising out of the Zantac litigation) is notable because it strikes directly at the linkage between mass torts and the securities class actions that try to play piggyback.  In Roofers Loc. No. 149 Pension Fund v. GSK PLC, 2026 U.S. Dist. LEXIS 44087 (E.D. Pa. March 4, 2026), the information contained in mass tort filings and accompanying discovery were enough to bar the securities class action based on the statute of limitations.

Continue Reading Untimely Piggybacking
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Revenue” Never Actually Received

Today’s guest post, by Reed Smith’sPaul Melniczak and Erin Apsokardu, is a little different.  It’s not about product liability, but rather about a state tax issue with the potential for saving drug companies substantial sums.  Since a dollar is a dollar, whether it is saved from bogus product liability actions or unnecessary tax payments, we were happy to have them tell our readers about it.  As usual our guest posters are 100% responsible for what follows, deserving of all the praise (and any blame) that their work deserves.

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Imagine browsing the electronics section of your favorite retailer and spotting a tablet originally priced at $99, now marked down to $59. You take it to the register, and the cashier rings you up. The tax gets calculated on $59, right? You’d be shocked if the store tried to collect tax on the original $99 sticker price you never actually paid.

Pharma chargebacks are no different, or at least they shouldn’t be.  If a pharma company makes a sale to a distributor with a wholesale acquisition cost (WAC) or “sticker price” of $99, but the distributor ultimately sells the product to a drugstore or healthcare provider for only $59, the pharma will offer a $40 price reduction to the distributor known as a chargeback. Ultimately, the distributor only owes the discounted price, not the WAC.

The notion that taxes should be based on the amount actually received, not some hypothetical list price, is driving a major state tax dispute involving several pharma companies in two states: Ohio and Washington. These issues should be on your radar if your company is making material sales into either state.

Why Ohio and Washington?

Most states tax pharmas and other businesses at the income level, just like the IRS, in which case it’s undisputed that chargebacks would naturally reduce a company’s taxable income.  Ohio and Washington are among the few states that broadly impose taxes based on all “gross receipts” with minimal deductions, rather than net income or profit.  Both states’ taxing authorities have taken the aggressive position that the WAC is somehow a “gross receipt” for a pharma company, even though it doesn’t actually have a contractual right to the WAC from the distributor.  Those states take the same position for other price reductions and rebates, such as Medicare, Medicaid, and Managed Care rebates.  In short, they charge real taxes on phantom receipts.

Returning to our store analogy: the states’ positions are akin to requiring the retailer to charge tax on the $99 sticker price rather than the $59 actual price paid.  That position is not supported by the statute or other guidance in either state, and many pharmas are pushing back. 

What This Means for Your Company

Fighting back against the state’s position can take two forms:

  • If a pharma followed the taxing authorities’ position and paid tax on the WAC on its original tax returns, it can file a claim with either state requesting a refund of the overpaid tax.  Ohio and Washington both allow taxpayers to go back up to four years to claim a refund.
  • If a pharma paid tax only on the amounts received after chargebacks, and received an assessment from either state, it can appeal that assessment and make the legal argument that only the actual sales price received is subject to tax.

In either posture—either refunds or assessment appeals—the vast majority of state tax disputes can be resolved without the need for formal litigation.  Resolution by negotiated settlement is always an option.

Next Steps to Consider

Evaluate your company’s state taxation history to determine whether a material amount of tax was paid in both states on the entire WAC amount (including chargebacks and other rebates).  If not, determine whether either state has assessed unpaid taxes on this basis.  If so, consider requesting a refund or appealing the assessment.  Given that the four-year statute of limitations for refunds is running, acting sooner will preserve the company’s rights to the largest available refund.   

Just as you wouldn’t pay sales tax on a price you never paid at the register, your company shouldn’t pay gross receipts tax on amounts it never received.

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A chunk of our family recently relocated to Indiana, a lovely state that spawned prominent Americans such as Orville Redenbacher, Eli Lilly, Larry Bird, David Letterman, Michael Jackson, and James Dean, and that possesses fine covered bridges, a suddenly fearsome college football team, and a remarkable library that houses, among other things, the original manuscripts of the James Bond novels. We are planning a visit soon. That would be a pleasure, not business trip.  We wish we had more business trips to the Hoosier State, because the judiciary there seems uncommonly reasonable. 

Take, for example, the recent case of Waggoner v. Anonymous Health System, Inc., et al., 2026 WL 607352 (Indiana March 4. 2026), a defense-favorable Indiana Supreme Court decision on PREP Act (and an Indiana statutory analogue) preemption.  

The facts of Waggoner are strange and sad. The plaintiffs’ decedent had to be “medically paralyzed” to permit mechanical ventilation and prevent death from severe COVID-19, but developed a bed sore that, according to the plaintiffs and their expert, was the ultimate cause of death. 

The plaintiffs brought a medical malpractice claim against over eighty health care providers.  The trial court determined that the defendants were shielded by the federal and state immunity statutes. Why? The trial court found that the decedent’s health “care arose from the COVID-19 emergency, even though he received some care after the state-emergency order expired.”  Accordingly, the trial court granted summary judgment in favor of the defendants. 

But in an interesting twist, the plaintiffs obtained in the intermediate appellate court a reversal based on an Indiana medical malpractice tort reform statute, intended to protect health care providers. Under the Indiana Medical Malpractice Act (MMA) (similar to medical malpractice statutes in other states, though perhaps a bit stronger than most) a medical-review panel typically must first “render an opinion on a claimant’s proposed complaint before the claimant can sue a health-care provider in court.” The plaintiffs cleverly deployed the MMA as a shield against both Indiana and PREP Act immunity. How? The plaintiffs claimed that because they alleged that death was caused by the bed sore, not COVID-19, PREP Act preemption could not be addressed by the court until a medical malpractice panel decided causation.  The intermediate court bought that argument. 

But not the Indiana high court. The immunity issue here was legal, not factual. All that was required was that the death was caused by medical treatment for COVID-19, and that fact was undisputed.  Thus, concerning preemption, there was nothing for a medical malpractice panel to decide.  Whether the bed sore rather than COVID itself was the ultimate cause of death was inconsequential to the immunity analysis. The claims were plainly preempted, both under the PREP Act and under a parallel Indiana COVID immunity statute, since the bed sore arose from the decedent’s paralysis induced by COVID treatment.  The decedent “would not have developed the bed sore in the first place had he not developed COVID-19 and needed the assistance of a ventilator.”  

The plaintiffs mounted some decent arguments against preemption. That is to say, the arguments were not frivolous. But neither were they winners. First, the plaintiffs focused on chronology.  But the state act applied even though rescinded before the death because the relevant care occurred before recission.  

Second, immunity would be called off under the Indiana statute if the medical care rendered was not merely negligent but was grossly negligent. But the plaintiffs had no factual support for their belatedly raised gross negligence claim.  

In any event, even if the plaintiffs could nibble away at state statutory immunity, their lawsuit was still blocked because the federal PREP Act also preempted these claims. The plaintiffs’ arguments against state immunity had no application to PREP Act immunity.  The ventilator, the use of which led to the bed sore, was a “covered countermeasure” under the federal statute. All the defendants were “covered persons” providing COVID treatment.  The bed sore was part of a “chain of events” that “cannot be separated from the administration of a covered countermeasure.”  

Just as the plaintiffs invoked gross negligence in an effort to skirt Indiana statutory immunity, the plaintiffs invoked “willful misconduct” to skirt federal immunity. But the plaintiffs did not bring a willful misconduct claim under the PREP Act, only a state-court medical malpractice claim, and never sought PREP Act compensation, which is a prerequisite to such a claim.  

Thus, the Indiana Supreme Court reversed the intermediate court, and held that the trial court had not erred in granting summary judgment to the healthcare providers.  Waggoner is yet another sound ruling from an Indiana court.  As the great Indiana-born author Kurt Vonnegut, Jr., often wrote, “And so it goes.”

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When we last checked in on the Taxotere MDL back in January, we described the court’s brand and generic preemption rulings as chronological, not contradictory. At the time, that seemed like the most charitable reading.

The court had concluded that certain medical literature—the 2003 and 2006 studies—qualified as “newly acquired information” for the brand manufacturer because those studies post-dated FDA approval of the brand drug in 1996. But the same studies could not be “newly acquired” for the second-generation manufacturers whose products were approved through §505(b)(2) applications in 2011. By then, the court reasoned, the FDA would have already been aware of that literature when it approved the later labels. Same studies, different regulatory timelines, different answers.

Hence our earlier conclusion: chronological, not contradictory.  Well… maybe not.

The brand manufacturer has now asked the court to certify the denial of its summary judgment motion for interlocutory appeal. In re Taxotere (Docetaxel) Eye Injury Products Liability Litigation, 2026 WL 568606 (E.D. La. Feb. 27, 2026). Under 28 U.S.C. § 1292(b), certification requires three things: a controlling question of law, substantial ground for difference of opinion, and a likelihood that an immediate appeal would materially advance the litigation. Id. at *4.

Preemption easily checks the first and third boxes. It is plainly a controlling legal issue, and if the Fifth Circuit reverses, most—if not all—of this MDL disappears. That certainly counts as “material advancement.” Id. at *5. The real fight was over the second requirement: whether there is a substantial ground for difference of opinion.

The brand manufacturer argued that there is because the court’s own decisions create a logical problem. The key point is that the FDA approved the §505(b)(2) products in 2011 with labels containing warnings identical to those approved for the brand product in 2002/2003. And now we understand why the brand manufacturer was likely jumping up and down when it read the court’s generic decision.

Approval of identical warnings undermines the court’s earlier conclusion that the 2003 and 2006 studies constitute “newly acquired information.”   To qualify for a CBE label change, information must not only be “newly acquired,” it must also reveal risks of a different type or greater severity or frequency than previously known at the time of approval. Therefore,

if the 2003 and 2006 Studies did in fact present additional risk information that was not adequately captured by the 2003 labeling, then the FDA could not have approved the 505(b)(2) applications without requiring revised warnings.

Id. at *6.

Or put more simply–if those studies really revealed risks significant enough to justify a CBE label change, the FDA presumably would not have approved identical warnings eight years later in 2011.

The court expressed some skepticism about the argument but ultimately concluded that the Fifth Circuit has not addressed how, if at all, the subsequent approval of another manufacturer’s drug affects the preemption analysis. Id. at *8. That uncertainty was enough. The interlocutory appeal is certified.

So, while the court’s two decisions may not technically contradict each other on the timing question of when information becomes “newly acquired,” they sit in some tension on the different, but equally important, question of whether those studies revealed materially new risks that would support a label change in the first place.

If you are wondering why the FDA’s subsequent approval of identical warnings is not also “clear evidence” that the agency would have rejected a labeling change by the brand manufacturer (which would independently preempt plaintiffs’ claims), there is a simple answer–the defendant did not raise that argument in its summary judgment motion, so the issue was not before the court.

For now, then, the focus shifts to the Fifth Circuit and the timing question. But depending on how things unfold, defendants may have a decent “clear evidence” argument waiting in the wings if this litigation heads into round two.

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We commented about the King v. DePuy litigation several years ago because this was one of the cases where Pinnacle Hip plaintiffs tried and failed to use a turncoat expert.  Well, this long-running (since 2013) – due mostly to execrable MDL management (8 years with no movement) rather than either parties’ fault – lawsuit is  finally over.

You might remember from eight years ago that a consolidation-induced nuclear verdict in the Pinnacle Hip MDL itself was reversed on appeal in part because the plaintiffs lied to the jury how much they paid their expert witnesses.  We discussed that here:

Next, the Fifth Circuit found additional grounds to overturn the judgment due to what it called “deception” by the plaintiffs’ attorney regarding plaintiffs’ experts, something we wrote about last year.  Plaintiffs classified two of its experts as “non-retained,” meaning not paid.  At trial, plaintiffs’ attorney contrasted this with what he called the “bought testimony” of the defendants’ expert.  The problem is, however, that plaintiffs’ experts were “bought” too.  Before trial, plaintiffs’ attorney donated $10,000 to St. Rita’s Catholic School, the favorite charity of one of the two experts.  More blatantly, after trial, plaintiffs paid $65,000 in total to the two experts.

The trial that the plaintiffs lost in King – shockingly to us – involved similar shenanigans.  Unlike in the MDL, these plaintiffs got sanctioned for it.  The Ninth Circuit affirmance did not discuss what went on in any detail, King v. DePuy Orthopaedics, Inc., 2026 WL 74511 (9th Cir. Jan. 9, 2026), so we looked for, and found the district court’s decision.

[Plaintiffs’ counsel] is challenging the Order granting Defendants award of attorney fees, awarded as a sanction for failing to disclose that he was paying a fact witness $15,000 for 2 hours of testimony.  [Counsel] argues that he just received disclosure from Defendants counsel that they are paying an expert in a different case $15,000.  [Counsel] says that the Court should consider this “new evidence” to show that his payment to [the implanting surgeon] was reasonable.  The Court disagrees.

King v. DePuy Orthopaedics Inc., 2025 WL 3907406, at *1 (D. Ariz. April 29, 2025) (emphasis added), aff’d, 2026 WL 74511 (9th Cir. Jan. 9, 2026).  Plaintiffs’ “you did it, too” defense to being sanctioned over witness payments didn’t hold water because, plaintiffs were paying a fact witness, not an expert, and that’s a big difference.

A retained expert is always paid, and the payments are disclosed so they may be properly cross examined and the jury can decide if the payments affected their testimony.  [The treating physician] on the other hand was a fact witness whose only job was to testify about the treatment he provided to his patient.  He is not paid to give any opinions. . . .  Therefore, the two cannot be compared.

Id.  Further, the payment that plaintiffs tried to hide was “outrageous” for a mere fact witness, “$15,000 for 2 hours of testimony.”  Id.  “Additionally, it is important to remember that [counsel] failed to disclose the payment during a hearing at which he said: ‘no one is paying him for his testimony.’”  Id.  Thus, the district court sanctioned the plaintiffs with an instruction to the jury that the plaintiffs had attempted to conceal their payments to the treater that were large enough to affect that witness’ credibility.  After what happened in the Pinnacle Hip MDL, one might think that plaintiffs would know better than to hide a questionable witness payment.

Nope, they didn’t, but the Ninth Circuit did, and affirmed.  The sanctions, including curative jury instructions, were quite proper.

[Plaintiffs’] arguments are unavailing.  Payments to [the treater] fell within the scope of appellee’s discovery request, and [plaintiffs] had communications with [him] in their possession.  The district court was therefore authorized by Rule 37(c)(1) to issue a curative instruction to the jury.

King v. DePuy Orthopaedics, Inc., 2026 WL 74511, at *1 (9th Cir. Jan. 9, 2026).  The instructions: (1) concerning plaintiffs’ “effort to withhold [the treater’s] compensation from defendant and the jury,” and that plaintiffs’ “excessive and undisclosed payments . . . may have affected [the witness’] credibility” – were “neither misleading nor inadequate to guide the jury.”  Id. at *1.  Further, even if there had been error (which there wasn’t), it was harmless because the rest of the instructions “stressed the[ jury’s] role as the final arbiters of fact.”  Id. at *2.

And that is the end of the King litigation, after some13 years.  Checkmate.

But it’s not the end of our post.

While searching for the affirmed trial court opinion, we also came across another opinion in the run-up to trial in King on motions in limine that we found sufficiently notable on the resolution of recurring evidentiary issues for us to share with our readers.  The decision is King v. DePuy Orthopaedics, Inc., 2024 WL 6953089 (D. Ariz. July 9, 2024), and here are seven results that the court reached that defendants may find useful in future trials:

  • Plaintiffs were not allowed to use deposition testimony of absent deponents from other Pinnacle Hip cases because they involved unrelated plaintiffs without “any connection . . . other than related subject matter.”  Since the defendants “had no opportunity to develop this previous testimony through cross-examination as it pertains to the facts of the current case,” they were not admissible hearsay under Fed. R. Evid. 804(b)(1).  Id. at *1.
  • As we’ve already discussed, plaintiffs cannot offer the notorious p-side hit piece, Doubt Is Their Product, as “impeachment” because:  (1) it is not a learned treatise and (2) any “minimal probative value is substantially outweighed by undue prejudice.”  That book can’t be a learned treatise because it is not “reliable.”  The “bias” of the book’s author is “clear . . . throughout.”  The MDL plaintiffs used the same book, and the Fifth Circuit held that Fed. R. Evid. 403 should have been invoked.  The book’s “goal [is] likening Defendants, and possibly their experts, to notable ‘corporate villains’ that many of the jurors likely have heard of and formed negative opinions about,” and thus is properly excluded under Rule 403 as unduly prejudicial.  Id. at *2.
  • MAUDE device adverse event reports are excluded.  Neither side can use them because MAUDE “does not have reporting criteria or demonstrate how [this device] create issues or cause problems for patients.”  Id. at *3.
  • Foreign adverse event reporting is also excluded because “those databases have different reporting criteria, admission could confuse the jury, and some of the countries have single payer systems which alters the incentives for reporting.”  Id.
  • As long as plaintiffs attack the defendants’ “post-marketing surveillance,” defendants may introduce evidence that “they did act reasonably with post-market surveillance explaining [defendants’] own approach.”  Thus, “if Plaintiffs ‘open the door’ on their own ‘post-market surveillance’ evidence/argument, then Defendants should be able to rebut it with their own theory.”  Id. at *4.
  • Plaintiffs may not attack the FDA’s §510(k) process as a “loophole.”  There is no claim that defendants’ use of this process for this device was “fraudulent” or “illegal,” so plaintiffs’ “loophole” allegation is “unfairly prejudicial because it was the only path available.”  Id.
  • Subsequent regulatory changes – the FDA’s “2013 proposal and 2016 rule change requiring PMA approval” – are “not relevant to what was happening with [device], any known risks in 2010, and is unfairly prejudicial.”  Id.
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The Supreme Court recently issued a unanimous decision resolving a circuit split on an important question of federal subject matter jurisdiction: Whether a district court’s erroneous dismissal of a nondiverse party before final judgment can cure a jurisdictional defect that existed when a case was removed to federal court.  You might think this is a question that only jurisdiction wonks like us would care about. 

But you would be wrong.  When the Supreme Court granted review in this case, Bexis wrote a post called “Will the Supreme Court Turn Fraudulent Joinder into a Free Shot for Plaintiffs?”  The answer, unfortunately, is yes.  The Supreme Court has ruled that a district cannot cure a jurisdictional defect by involuntarily dismissing a nondiverse defendant, even if the case goes all the way through trial to judgment.  This of course matters a great deal to us because plaintiffs suing in product liability cases often join nondiverse or local defendants to prevent removal—distributors, retailers, pharmacies, healthcare providers, etc.  We often resist these efforts with arguments like fraudulent joinder, and we often succeed.  The Supreme Court’s opinion, however, has amplified the risk that an erroneous jurisdictional ruling in the district court will render moot everything that comes after. 

The case is Hain Celestial Group, Inc. v. Palmquist, No. 24-724, 2026 WL 501733 (U.S. Feb. 24, 2026) (to be published), which arose from a child born in 2014 to the plaintiffs.  For the first two years, the plaintiffs (Texas citizens) fed their child baby food manufactured by one defendant and purchased from another (also a Texas citizen).  When, however, the child began exhibiting developmental disorders, some doctors attributed these conditions to heavy-metal poisoning.  Id. at *3. 

Fast forward to 2021, when a subcommittee of the U.S. House of Representatives released a staff report purporting to find that certain baby foods contained elevated levels of toxic heavy metals.  Following the report’s release, the plaintiffs sued both the manufacturer and the retailer in Texas state court.  

The manufacturer (a citizen of Delaware and New York) promptly removed the case to federal court on the basis of diversity jurisdiction.  The retailer defendant, however, was a Texas citizen, like the plaintiffs, so the manufacturer argued that the retailer had been improperly joined and should be dismissed.  That would eliminate the only nondiverse defendant.  Id. at *3-*4. 

The district court agreed that there was complete diversity, applying Fifth Circuit precedent holding that a defendant is improperly joined if the plaintiff fails to state a facially plausible claim against that defendant.  The court concluded that the plaintiffs had not alleged a plausible claim against the Texas retailer defendant, dismissed that defendant, and denied the plaintiffs’ motion to remand.  Id. at *4. 

Let’s pause here.  Fraudulent joinder and/or misjoinder are arguments that we and most everyone who regularly reads this blog have used thousands of times—always with a sound basis in fact and law and often successfully.  If a district court’s order denying remand can be second guessed at any time, even after the case has proceeded through trial to judgment, that order gives the plaintiff an ace up the sleave—a jurisdictional issue built into the case, potentially resulting in a do over if the plaintiff loses at trial.

That is what happened in Hain Celestial.  The case proceeded to trial against the manufacturer alone, and the manufacturer prevailed on a motion at the close of the plaintiffs’ case.  In entering judgment as a matter of law, the district court concluded that the plaintiffs had failed to present sufficient evidence that ingestion of heavy metals could cause their child’s symptoms or at what levels such metals would need to be ingested to produce those symptoms.  Id.

On appeal, the Fifth Circuit reversed the improper-joinder decision, holding that the Texas retailer was properly joined and thus was erroneously dismissed.  Because the district court thus lacked diversity jurisdiction, the Fifth Circuit vacated the judgment.  Id. 

The Supreme Court granted certiorari to resolve a split among the Courts of Appeals on whether vacatur is required under these circumstances, and it affirmed the Fifth Circuit’s decision.  Justice Sotomayor’s opinion began by establishing two foundational principles.  First, no party asked the Court to revisit the Fifth Circuit’s holding that Whole Foods should not have been dismissed.  Second, no party disputed that had the district court correctly performed the joinder analysis at the outset, it would have lacked jurisdiction and been required to remand the case to state court.  

The only remaining question was whether the district court, having erroneously dismissed the Texas retailer, had jurisdiction to enter a final judgment as to the manufacturer.  Id. 

As previewed above, the Supreme Court held that the district court lacked jurisdiction to enter judgment.  The Supreme Court reaffirmed that federal courts are courts of limited jurisdiction and that appellate courts must satisfy themselves of the jurisdiction of lower courts under review.  Generally, appellate courts assess a district court’s jurisdiction based on the facts that existed at the time of filing or removal.  If jurisdiction was lacking at that time, any judgment on the merits must typically be vacated.

There is, however, an exception.  In Caterpillar Inc. v. Lewis, 519 U.S. 61 (1996), the Supreme Court held that if a district court properly cures a jurisdictional defect before final judgment, the appellate court need not vacate that judgment.  In Caterpillar, the nondiverse defendant was fully dismissed with all parties’ consent before trial commenced.  Under those circumstances, the verdict could stand, although the Supreme Court further clarified that if the jurisdictional defect “lingered through judgment” uncured, then vacatur would be required.  Hain Celestial, at *5. 

Applying these principles, the Supreme Court held that the erroneous dismissal of the Texas retailer did not cure the jurisdictional defect.  When the Fifth Circuit reversed the district court’s error, it restored the Texas retailer to the case and thereby destroyed complete diversity.  Consequently, the jurisdictional defect “lingered through judgment” and required vacatur.  Id. *6.  As the Supreme Court observed, the Texas retailer was “only temporarily and erroneously removed from the case; it was not ‘gone for good.’”  Id.

The Supreme Court rejected the manufacturer’s argument that the correctness of the district court’s dismissal was irrelevant because the parties were completely diverse at the time of final judgment.  The Court emphasized that it has never held that a district court can create jurisdiction through its own mistakes.  The Court also rejected considerations of efficiency.  This case went all the way to trial, with considerable time and effort by the parties and the district court alike.  That all turned out to be a waste of time.  The Supreme Court, however, noted that while Caterpillar recognized that considerations of finality and efficiency become “overwhelming” after a diversity case has been tried in federal court, those considerations apply only after a jurisdictional defect has been properly and finally cured.  Id. 

Finally, the Supreme Court rejected the manufacturer’s fallback position that the Texas retailer should be dismissed under Federal Rule of Civil Procedure 21, which permits courts to add or drop parties “on just terms.”  Citing Newman-Green, Inc. v. Alfonzo-Larrain, 490 U.S. 826 (1989), the Court noted that, while Rule 21 may be used to dismiss dispensable nondiverse parties in appropriate circumstances, courts must carefully consider whether such dismissal would prejudice the parties.  Critically, in Newman-Green, the plaintiff sought the dismissal; here, a defendant sought to dismiss another defendant over the plaintiffs’ consistent objections.  The Court emphasized that plaintiffs are the “masters of the complaint” and generally have the right to choose their forum.  The plaintiffs here exercised that right by purposefully and properly joining a nondiverse defendant against whom they could not proceed in federal court.  Rule 21 does not permit a court or defendant to override that choice in these circumstances.  Id. at *7. 

So there you have it.  The Hain Celestial opinion reinforces that removing defendants cannot rely on erroneous interlocutory dismissals of nondiverse parties to establish federal jurisdiction.  The Supreme Court’s analysis makes clear that the jurisdictional cure recognized in Caterpillar requires a proper and final dismissal—not merely the removal of a party through an erroneous ruling that remains subject to appellate review.  We would also be remiss if we did not mention Justice Thomas’s concurring opinion, which wondered whether the doctrine of fraudulent joinder should exist at all, outside of cases of bad faith, actual fraud, or other “extreme abuse.”  Id. at *8-*9. 

Will this prevent us from arguing fraudulent joinder or misjoinder when properly removing cases to federal court?  No, it won’t.  But if the plaintiff has contested complete diversity and lost, we will surely hear about it on appeal.  And, if the district court was wrong, the Supreme Court has now said that any judgment for the defendant is at greater risk. 

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Yes, we know our title is rather circular.  In fairness, most of the allegations we have seen in cases attempting to impose liability on the sponsor of a clinical trial are too.  We have been following proposed clinical trial liability in its various proposed forms for quite some time, including winning a jury trial for a sponsor sued by a clinical trial participant longer ago than we would care to recognize.  For some reason, we see fewer of these cases than we used to.  Part of that change may be because plaintiff lawyers tend to prefer drug or device cases that are part of litigations, where the investment needed to get up to speed can be justified by the number of cases.  Part of it may be because sponsors tend to win these cases.  Many theories of liability have been offered, but few have stuck.  This makes sense to us, of course.  The informed consent process for a clinical trial is invariably thorough and well documented.  For medical products that are not yet on the market, clinical trial participants know in advance that the risks and benefits are uncertain.  For a double-blind placebo-controlled trial, the participants know they may be getting a “sugar pill.”  For the study of a disease where an active treatment comparator is required, such as diabetes, they certainly know that they do not get to pick which treatment they will receive or otherwise deviate from the study protocol if they want to remain in the study.  They get free care within the bounds of the study in exchange for participating in the study.  In short, clinical trials have a number of differences from the typical prescription of a drug or device that is on the market.  In another critical way, however, it is the same—the investigator is responsible for the care of the patient with whom she interacts directly and the sponsor is not.  Some of the earliest clinical trial decisions we know about, Tracy v. Merrell Dow Pharms., Inc., 569 N.E.2d 875, 878-79 (Ohio 1991), comes to mind, found that the learned intermediary doctrine applies to claims involving prescription drugs received in connection with a clinical trial.  By and large, that has remained the rule, which also deters some of these cases.  The record on what information about the investigational drug and the study design is relayed to investigators tends to be extensive.

Why all of this introductory hemming and hawing?  We are discussing a clinical trial case brought by pro se plaintiff, not a lawyer.  Graw v. Eli Lilly & Co., No. 4:25 CV 1033 RWS, 2026 WL 496723 (E.D. Mo. Feb. 23, 2026).  We do not usually discuss decisions from pro se cases.  This one, however, appears to have been actively litigated by the plaintiff and, even though she got more deference from the court than a represented party would have received, the decision sets out detailed reasoning for why plaintiffs’ claims were dismissed.  We also find these cases interesting because of the public health implications.  It is good for new prescription medications—Graw is a drug case so we will stick with drugs—to be developed.  Good research is really expensive.  Discouraging it by imposing liability for injuries allegedly suffered by clinical study participants is bad for public health.  Undermining confidence in how clinical trials are conducted is also problematic because, among other things, you need compliant study participants and diligent investigators.  So, we definitely read Graw with some bias as to the merit of plaintiff’s allegations.  In basic terms, plaintiff claimed permanent injuries and massive damages from sustained vomiting while taking a drug, purportedly the study drug, while enrolled in a clinical trial to study diabetes.  (The decision’s details on these issues are sparse, but, from what we can tell, this was probably a double-blind study, so she would have known what she took.)  She claimed that personnel of Study Metrix, an entity that ran the study at her particular site, were generally not very good or responsive in her interactions with them during the roughly four months she was in the study.  By contrast, she had no interactions with the sponsor, but attempted to impose liability on it based on a number of theories predicated largely on the fact of sponsorship and the allegations about Study Metrix.  She had originally sued Study Metrix in the same case, but dismissed the non-diverse defendant to stay in federal court against the sponsor.  Then she sued Study Metrix and a doctor, presumably her own doctor or one she saw in connection with the study, in a separate case in state court.  The sponsor moved to dismiss the federal case for failure to state a claim and lack of service, although the Graw court did not reach the latter ground.

The first alleged cause of action was negligence, which boiled down to allowing plaintiff to sustain injuries (vomiting and a myriad of issues that could be related to being diabetic) while enrolled in the study.  Any negligence claim since Palsgraf requires duty, breach, injury, and proximate cause.  Plaintiff did not get past duty.  She offered “conclusory statements about [the sponsor’s] alleged oversight role” as to the allegedly negligent care provided by Study Metrix to establish a “right or duty to direct her medical care solely because she participated in one of its clinical trials.”  2026 WL 496723, *4.  The complaint lacked factual allegations to establish that Study Metrix was the sponsor’s agent largely because the sponsor did not have the right to control the actions of Study Metrix and its employees in connection with the trial.  The Graw court also rejected that the new allegations in briefing—which the Eighth Circuit requires to be considered when addressing a motion to dismiss a pro se plaintiff’s complaint—about her specific medical course created any duty for the sponsor to step in and direct her care.  Id. at *5.  The court cited two of many cases that have recognized that federal regulations on clinical trials do not impose such a duty or create a cause of action against the sponsor; the latter case happened to be one of the few that set aside Erie restrain to create a new state duty related to clinical trial sponsorship, but Graw did no such thing for Missouri law.  Graw also rejected the facile contention that plaintiff should get discovery to try to establish a duty.  “Graw is still required, however, to ‘[plead] enough fact[s] to raise a reasonable expectation that discovery will reveal evidence of [the claim or element].’”  Id. (quoting Twombly).

Next up was plaintiff’s claim for medical malpractice.  That was easy.  In addition to not having factual allegations that the sponsor ever provided medical care to plaintiff or assumed a doctor-patient relationship with her, plaintiff did not file the affidavit required for med mal plaintiffs under Missouri law.  Id. at *6.

The claim for lack of informed consent, which Missouri recognizes as a cause of action separate from med mal, took more analysis.  As with many of her allegations, plaintiff parroted the legal standard, alleging “the material risk information was withheld or minimized, impairing her ability to make informed decisions about continued participation.”  Id. at *7.  One of the holes here was that plaintiff did not “identify the specific information that was allegedly not disclosed to her prior to or during her participation in the clinical trial.”  Id.  We pause here because we have seen far too many decisions where a failure to warn claim against the manufacturer of a prescription or OTC medical product survives a motion to dismiss without any specifics of what information should have been provided beyond what was already provided.  This plaintiff surely received quite a bit of pertinent information in connection with giving her consent to participate in the trial, so she could not plausibly claim causation from inadequate consent without providing details on what was supposedly missing.  The legal responsibility for obtaining informed consent rested with Study Metrix and its medical staff, not with the sponsor, who was not shown to be the kind of “medical practitioner” on which Missouri law imposes a duty.  Id.

Plaintiff’s claims for intentional and negligent infliction of emotional distress were predicated on Study Metrix’s alleged conduct, so the lack of agency and a direct duty for the sponsor were fatal.  She also could not specify anything that the sponsor did that was “outrageous and extreme.”  Id. at *8-9. 

The product liability claims also did not get off the ground because plaintiff did not allege a design defect, a manufacturing defect, or a failure to warn.  Id. at *9.  (It is unclear if the complaint even identified the particular drug she took.)  She also abandoned the claim during the briefing.

The last and arguably most relevant asserted claim was for “violations of FDA clinical trial regulations.”  Based on a response to a prior court order, which was presumably directed to finding out if there was going to be a Buckman issue, plaintiff cabined her claim as not being based on a violation of the regulations per se, but as “referenc[ing] FDA regulations as evidence of the applicable duty of care and industry standards governing clinical trial sponsors.”  Id. at *10.  Citing the Sixth Circuit decision in Abney v. Amgen (discussed here and here), the court held that “FDA regulations governing clinical trials do not create an independent duty of care” running from sponsors to participants.  Id. at *10.   That was enough.

There is one last thing that we liked about Graw.  The dismissal of the case was with prejudice.  Plaintiff will get no chance to amend in response to a decision that rejected all seven counts she offered.  While plaintiff’s pending case against an entity and individual that arguably owed her the duties she had tried to impose on the sponsor may have played a role, it is good when groundless cases go away without multiple rounds of motions to dismiss.

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We’ve become aware that some clients are using artificial intelligence (AI) to summarize or analyze things like complaints, briefs, internal documents, or even – horror of horrors! – law firm bills.  If the client performing these tasks is an in-house lawyer, such work might be protected by the attorney client privilege or work product doctrine (note that we say “might”).  But what if the AI project was undertaken by a non-lawyer?

Judge Jed Rakoff of the Southern District of New York has some bad news for you. In United States v. Heppner, 2026 WL 436479 (S.D.N.Y. Feb. 17, 2026), he held that a criminal defendant’s written exchanges with a generative AI platform were not protected from government inspection by either the attorney-client privilege or the work product doctrine.  We specify the name of the judge because it matters. When Judge Rakoff speaks, the legal world listens.  Not long ago, we wrote occasional blogposts with the title of “There’ll Always be Posner.”  That title was inspired by The New Yorker, which often ran funny little reportorial pieces called “There’ll Always be England” documenting doings in the land of Dickens, Tolkien, and Led Zeppelin.  Some places or people are so reliably interesting or eccentric that they can always be counted on to supply good copy.  So it was with Judge Posner, a brilliant judge and writer.  His words brimmed with confidence. He eschewed footnotes.  After all, what authority was more authoritative than Posner’s own noggin?  In the taxonomy of judges, it was hard to place Posner. He did not seem a textualist or originalist so much as a very sophisticated consequentialist. In a way, he was the sort of Philosopher King that earlier legal scholars (think of Learned Hand or Herbert Wechsler) decried. When Posner retired from the bench, we lost  a splendid source for our blatherings.  (Posner’s post-retirement career has been … interesting). Similarly, Judge Rakoff is lightning smart. His rulings are often bold and his prose shimmers.  Our first encounter with him was at a CLE long ago.  Rakoff was then a partner at the Mudge Rose law firm.  The subject matter was RICO, and Rakoff was incapable of saying anything uninteresting or uninsightful.  Like Posner, Rakoff exudes originality and confidence.   Like Posner, he is delightful to read (and probably terrifying to appear before).  

Rakoff’s analysis in the Heppner case is easy to follow and hard to fault, but that does not soften the blow to the solar plexus from his ruling that answers “a question of first impression nationwide: whether, when a user communicates with a publicly available AI platform in connection with a pending criminal investigation, are the AI user’s communications protected by attorney-client privilege or the work product doctrine?”  Judge Rakoff’s answer is a resounding No.  So be careful out there. 

Why is Judge Rakoff’s answer No? Facts matter, and some of them here are particularly important in accounting for the result.  Most important is that the criminal defendant, “without any suggestion from counsel that he do so,” used the generative AI platform Claude to prepare “reports that outlined what he might argue with respect to the facts and the law” in anticipation of government charges.  The AI communications were seized from the defendant at the time of his arrest pursuant to a search warrant.  The defendant had not challenged the validity of the search warrant. Thus, in parsing Judge Rakoff’s ruling, you need to ask whether things would have turned out differently if the lawyer had told the defendant to run a specific AI inquiry, and whether a motion to suppress might have gained some traction.

Judge Rakoff held that the defendant’s communications with the AI platform were not embraced by the attorney-client privilege because:

  1. The communications were not between the defendant and his counsel. The privilege requires a “trusting human relationship,” and that was absent here. 
  2. The communications were not confidential. The written privacy policy for the Claude program used by the defendant disclosed that user inputs were being used to “train” the program. Thus, the defendant’s communications with Claude constituted a disclosure to a third party. 
  3. The defendant did not communicate with Claude for the purpose of obtaining legal advice.  Well, maybe the defendant thought that is what he was doing, but Claude itself disclaims that role. Cleverly, the government asked Claude whether it could give legal advice, and the AI platform responded that “I’m not a lawyer and I can’t provide formal legal advice or recommendations.”  Checkmate.  

Similarly, the work product doctrine did not shield the AI communications from disclosure. Those communications might have been done in anticipation of litigation, but they were not “prepared by or at the behest of counsel,” nor did they reflect the defense counsel’s strategy.  Maybe you can conjure up some tweaks to the fact scenario that could have brought the work product doctrine within range, but how risk averse are you?

Judge Rakoff rightly concludes that generative AI “presents a new frontier in the ongoing dialogue between technology and the law.”  The Heppner case adds to that ongoing dialogue, and adds to our worries about whether AI offers more peril than promise. 

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