Third Department Sanctions Unabashed, Persistent Use of GenAI “Hallucinations”

Like Fraud and Spiderman, With Great AI Powers, Come Great Responsibilities …

During my weekly exercise of scouring the decisional databases for noteworthy and instructional fraud decisions, lo and behold, what do I find? A decision of the New York, Appellate Division, Third Department, that is admittedly unremarkable for its fraud-related merits disposition, but indeed noteworthy “as the first appellate-level case in New York addressing sanctions for the misuse of GenAI,” i.e., hallucinations on steroids.

The decision was rendered on January 8, 2026, in the case of Deutsche Bank Natl. Trust Co. v LeTennier, 2026 NY Slip Op 00040 (3d Dep’t Decided Jan. 8, 2026). And it is absolutely worthy of reading.

Read the full blog post here.