As we’ve been looking at the benefits and potential risks associated with AI, it seemed apt to discuss a novel case recently filed in the federal district court for the Northern District of Illinois. In Nippon Life Insurance Company of America v. OpenAI Group, Nippon Life Insurance Company (Nippon) brought claims against OpenAI after a woman seeking to set aside a settlement agreement used ChatGPT to file numerous motions with the court that had “no legitimate legal basis or procedural purpose.”

In January of 2024, Graciela Dela Torres (Torres), working with a human attorney, reached a settlement of her disability benefits claim with Nippon. She later suspected errors and asked her attorney to re-open the case. The attorney reminded her that she had entered into a binding settlement with Nippon and her case had subsequently been dismissed. Torres then turned to ChatGPT to determine whether she was being “gaslighted” by her attorney, which ChatGPT confirmed. After dismissing her lawyer, Torres turned to ChatGPT to craft legal arguments and documents, which she submitted in a series of motions to the Court seeking to reopen her case.

Nippon filed a complaint alleging:

1) “tortious interference with a contract – whereby a third party unjustifiably interferes with or induces a party to breach a contract;”

2) abuse of process in which a party who uses the legal process “against another primarily to accomplish a purpose for which it is not designed, is subject to liability to the other for harm caused by the abuse of process;” and

3) the unlicensed practice of law which prohibits “practice as an attorney or counselor at law within this State (Illinois) without having previously obtained a license for that purpose from the Supreme Court.”

Nippon claimed ChatGPT’s conduct resulted in the  expenditure of “significant time and resources relitigating settled claims” and required Nippon to incur “substantial legal fees, costs, and other damages.”  Nippon stressed the importance of its business reputation and the significant impact of reputational damage, especially in its Japanese market. It further asserted that ChatGPT “engages in the practice of law by providing users with legal analysis, legal advice, legal research, and produces drafted legal documents.” Nippon indicated OpenAI later amended its policies to bar use of the platform for legal advice.

While this has yet to go to trial, businesses, including employers, should be cognizant of the sometimes unreliable information generated by AI and take note of monetary and other damages, such as reputational harm, that can result. If you or your organization have questions on how to navigate AI and potential related legal consequences of its use, contact Wiley Reber Law for legal advice that works.