AI hallucinated case law in insurance company’s filings in L.A. County house fire dispute
Attorneys for State Farm apologized to a court for submitting legal briefings rife with artificial intelligence hallucinations and nonexistent case law, the latest example of lawyers bolstering their arguments with precedents made up by a chatbot.
As part of an insurance dispute over a fire-damaged Carson home, attorneys for State Farm cited several cases in court filings this month that they later acknowledged don’t exist.
To support their point that every insurance claim must be “adjudicated on its own unique facts,” the insurance company’s attorneys cited a California Supreme Court decision involving Pacific Gas & Electric allegedly handed down in 1996.
To buttress their argument that an expert cannot be used as a back channel for “inadmissible hearsay,” they pointed to a nonexistent 2021 case brought by the government.
An imagined 2014 case involving State Farm was cited to convince a judge that the company was, ultimately, not responsible for covering all the damage to the plaintiff’s home.
“I am deeply apologetic for the above-mentioned submissions and my serious lapse in professional judgment,” Jacquelene Robinson, an attorney with Musick, Peeler & Garrett, the outside counsel representing State Farm, wrote in an Aug. 11 motion. “As such, I accept responsibility for those inexcusable errors, and offer no excuse, only an apology.”
The blunder was first caught by attorney Michael Shaolian, who sued State Farm in 2024 for alleged bad-faith handling of the insurance claim of Fa’alagilagi Meni-Silga, a Carson woman whose home was significantly damaged by a house fire and, later, a rainstorm.
After the mistakes were pointed out in court, Musick, Peeler & Garrett acknowledged the firm had discovered “nonexistent case citations which appear to have been AI hallucinations” across a recent batch of motions.
Robinson said in a court filing she used Irys, a legal AI company, but failed to check that the citations were correct.
Tom Hartmann, a spokesperson for State Farm, said in a statement that the company is working to ensure “appropriate safeguards are in place to prevent similar errors in the future.”
“State Farm expects its external counsel to conform to the highest level of ethical standards and professionalism, including in their use of AI and confirming the accuracy of all legal filings,” he said.
State Farm relies on various outside firms to litigate policy disputes, including some stemming from alleged mishandling of claims related to the January 2025 wildfires. The insurer has been the subject of repeated complaints from victims of the Palisades and Eaton fires who accused the company of stonewalling them and refusing to pay for the cleanup of fire toxins, among other grievances.
The California Department of Insurance announced in spring 2026 that it was considering temporarily banning State Farm from writing policies in light of residents’ complaints.
Insurance Commissioner Ricardo Lara said in a statement that his department had found State Farm “delayed, underpaid, and buried policyholders in red tape at the worst moment of their lives.”
State Farm responded in a statement that the department should take “responsibility for regulatory delays” and called the state’s homeowners insurance market “the most dysfunctional in the country.”