The Brief

A Los Angeles-area attorney must pay a $10,000 fine for filing a state court appeal full of fake quotations generated by the artificial intelligence tool ChatGPT.

The fine appears to be the largest issued over AI fabrications by a California court and came with a blistering opinion stating that 21 of 23 quotes from cases cited in the attorney’s opening brief were made up. It also noted that numerous out-of-state and federal courts have confronted attorneys for citing fake legal authority.

“We therefore publish this opinion as a warning,” it continued. “Simply stated, no brief, pleading, motion, or any other paper filed in any court should contain any citations— whether provided by generative AI or any other source—that the attorney responsible for submitting the pleading has not personally read and verified.”

The opinion, issued 10 days ago in California’s 2nd District Court of Appeal, is a clear example of why the state’s legal authorities are scrambling to regulate the use of AI in the judiciary. The state’s Judicial Council two weeks ago issued guidelines requiring judges and court staff to either ban generative AI or adopt a generative AI use policy by Dec. 15. Meanwhile, the California Bar Association is considering whether to strengthen its code of conduct to account for various forms of AI following a request by the California Supreme Court last month.

The attorney fined last week, Amir Mostafavi, told the court that he did not read text generated by the AI model before submitting the appeal in July 2023, months after OpenAI marketed ChatGPT as capable of passing the bar exam. A three-judge panel fined him for filing a frivolous appeal, violating court rules, citing fake cases, and wasting the court’s time and the taxpayers money, according to the opinion.

Mostafavi told CalMatters he wrote the appeal and then used ChatGPT to try and improve it. He said that he didn’t know it would add case citations or make things up.

He thinks it is unrealistic to expect lawyers to stop using AI. It’s become an important tool just as online databases largely replaced law libraries and, until AI systems stop hallucinating fake information, he suggests lawyers who use AI to proceed with caution.

“In the meantime we’re going to have some victims, we’re going to have some damages, we’re going to have some wreckages,” he said. “I hope this example will help others not fall into the hole. I’m paying the price.”

The fine issued to Mostafavi is the most costly penalty issued to an attorney by a California state court and one of the highest fines ever issued over attorney use of AI, according to Damien Charlotin, who teaches a class on AI and the law at a business school in Paris. He tracks instances of attorneys citing fake cases, primarily in Australia, Canada, the United States, and the United Kingdom.

In a widely-publicized case in May, a U.S. district court judge in California ordered two law firms to pay $31,100 in fees to defense counsel and the court for costs associated with using “bogus AI-generated research.” In that ruling, the judge described feeling misled, said they almost cited fake material in a judicial order and said “Strong deterrence is needed to make sure that attorneys don’t succumb to this easy shortcut.”

Charlotin thinks courts and the public should expect to see an exponential rise in these cases in the future. When he started tracking court filings involving AI and fake cases earlier this year, he encountered a few cases a month. Now he sees a few cases a day. Large language models confidently state falsehoods as facts, particularly when there are no supporting facts.

“The harder your legal argument is to make, the more the model will tend to hallucinate, because they will try to please you,” he said. “That’s where the confirmation bias kicks in.”

A May 2024 analysis by Stanford University’s RegLab found that although three out of four lawyers plan to use generative AI in their practice, some forms of AI generate hallucinations in one out of three queries. Detecting fake material cited in legal filings could get harder as models grow in size.

Another tracker of cases where lawyers cite nonexistent legal authority due to use of AI identifies 52 such cases in California and more than 600 nationwide. That amount is expected to increase in the near future because AI innovation is outpacing the education of attorneys, said Nicholas Sanctis, a law student at Capital University Law School in Ohio.

Jenny Wondracek, who leads the tracker project, said she expects this trend to get worse because she still regularly encounters lawyers who don’t know that AI makes things up or believe that legal tech tools can eliminate all fake or false material generated by language models.

“I think we’d see a reduction if (lawyers) just understood the basics of the technology,” she said.

Like Charlotin, she suspects there are more instances of made up cases generated by AI in state court filings than in federal courts, but a lack of standard filing methods makes it difficult to verify that. She said she encounters fake cases most often among overburdened attorneys or people who choose to represent themselves in family court.

She suspects the number of arguments filed by attorneys that use AI and cite fake cases will continue to go up, but added that not just attorneys engage in the practice. In recent weeks, she’s documented three instances of judges citing fake legal authority in their decisions.

As California considers how to treat generative AI and fake case citations, Wondracek said they can consider approaches taken by other states, such as temporary suspensions, requiring attorneys who get caught to take courses to better understand how to ethically use AI, or requiring them to teach law students how they can avoid making the same mistake.

Mark McKenna, codirector of the UCLA Institute of Technology, Law & Policy praised fines like the one against Mostafavi as punishing lawyers for “an abdication of your responsibility as a party representing someone.” He thinks the problem “will get worse before it gets better,” because there’s been a rush among law schools and private firms to adopt AI without thinking through the appropriate way to use them.

UCLA School of Law professor Andrew Selbst agrees, pointing out that clerks that work for judges are recent law school graduates, and students are getting bombarded with the message that they must use AI or get left behind. Educators and other professionals report feeling similar pressures.

“This is getting shoved down all our throats,” he said. “It’s being pushed in firms and schools and a lot of places and we have not yet grappled with the consequences of that.”

The Buss family has voted to sell its 17.8% minority ownership of the Los Angeles Lakers to new majority owners Josh Kushner and Bob Iger, ESPN and The Athletic are reporting.

The decision Monday by the six children of late owner Jerry Buss will end the family’s 47 years in an ownership role with the 17-time NBA champion franchise. The move also appears to end Jeanie Buss’ tenure as the Lakers’ governor.

“We have decided as a family to sell the remaining Buss Family Trust shares to the Bob Iger group as part of the ongoing transaction,” the Buss family said in a statement issued to ESPN. “We love the Lakers, Laker fans and will continue to support Los Angeles, but it is time to use this opportunity to move on and exit gracefully while we still can.”

Jeanie Buss, the Lakers’ governor since Jerry Buss’ death in 2013, led the family’s decision to sell a controlling stake in the Lakers to Dodgers owner Mark Walter last year at a valuation of $10 billion.

Sibling rivalry

Not all of the six Buss siblings — Jeanie, Jim, Johnny, Janie, Joey and Jesse — were in favor of the deal despite retaining their family trust’s minority ownership stake, and Joey and Jesse were fired from their front-office jobs with the team last November.

The siblings have been in frequent conflict since their father’s death, with Jeanie firing Jim from his job as the Lakers’ head of basketball operations in 2017, followed a week later with a lawsuit against her brothers amid an attempt by Jim and Johnny to oust Jeanie from her role as the Lakers’ controlling owner.

Walter, who is under federal investigation for tax issues, abruptly reached a deal earlier this month to flip the Lakers to Kushner and Iger at a valuation of $12.5 billion, another record for a pro sports team. Venture capitalist Kushner and former Disney CEO Iger reportedly bought about 65% of the team from Walter, but will now own about 83% of the Lakers — and Jeanie Buss apparently will no longer be able to serve as their governor.

She had been allowed to keep the role at least through 2030 under the deal with Walter, and Iger said last week that the new group planned to honor that arrangement — but governors are required to control at least 15% of team ownership.

Jerry Buss was a chemist and real estate investor who bought the Lakers, the NHL’s Los Angeles Kings and the Forum arena from Jack Kent Cooke in 1979 for $67.5 million. The Lakers quickly entered a renaissance in which they became known for their flashy “Showtime” style of play while winning five NBA titles between 1980 and 1988 behind Magic Johnson and Kareem Abdul-Jabbar.

While the NBA and professional sports became increasingly more corporate, the Lakers remained essentially a family business despite their massive profile and steady success. Jerry Buss and the Lakers have employed many of the basketball world’s greatest players and coaches of the past five decades, and Kobe Bryant led the Lakers to five additional championships between 2000 and 2010 before LeBron James added the 17th in 2020.

The sale agreement still must be approved by the NBA’s board of governors, and the process could take months.

Topline:

Cost-of-living: Latinos favored Democrats by 34% when it came to the question about who's better handling cost-of-living. “ It is the economy, cost of living and affordability that is, by a far measure, the issue driving Latino voters and Latino sentiments,” said Mike Madrid, Republican political consultant and founder of the Latino Working Class Project.

More support for Dems? No. This does not mean Latino voters are completely satisfied with how Democrats are running things in California.  "They are just as unhappy with Democrats,” said David Binder, founder of David Binder Research, which helped conduct the poll.

What this means for the gubernatorial race: An overwhelming amount of Latino voters are supporting Xavier Becerra over Steve Hilton, 72% to 24%.  ”If Xavier Becerra wins the election in November, it'll be incumbent upon him to prove that he is also working on behalf of Latino voters and all working class voters to help bring down costs and make things more affordable,” Binder said.

This story was originally published by CalMatters. Sign up for their newsletters.

Four weeks ago, Matt Johnstone received a call from the board-and-care facility in North Hollywood where his 89-year-old father lives. Health Net, the insurance company that pays for his care, was eliminating its assisted living benefit, meaning he would have to move out soon.

Johnstone panicked. His father has dementia and needs around-the-clock care. Neither Johnstone nor his brother can afford the roughly $6,000 per month the facility costs, and with health problems of their own, they can’t safely meet his needs at home either. Without insurance coverage, their father could end up on the streets, he said.

“He’s declining, and I just don’t know what’s going to happen if the program ends,” Johnstone said. CalMatters is not publishing the father’s name because Johnstone fears the plan will target him for speaking with media.

Health Net, one of the largest Medi-Cal insurers in the country, is canceling assisted living benefits for members at the end of the year, according to documents obtained by CalMatters and interviews with providers. Approximately 3,500 Medi-Cal patients like Johnstone’s father rely on Health Net to pay for assisted living costs. Most are elderly, and many have cognitive issues like dementia, senior advocates say. Medi-Cal is the state’s public insurance program for low-income Californians and people with disabilities.

CalViva Health and Community Health Plan of Imperial Valley, which contract with Health Net to provide services, have also notified the state of their intent to discontinue assisted living benefits.

Health Net's decision has been shrouded in confusion with little public information. Senior advocates and family members of assisted living residents fear people will become homeless or be shuffled between hospitals and skilled nursing facilities.

A disaster in the making?

Pauline Shatara, deputy director of California Advocates for Nursing Home Reform, said a few assisted living facilities have already confirmed to her organization that residents have been dropped off at emergency rooms.

“This is going to be a disaster,” Shatara said.

Senior advocates also say the state did not include enough consumer protections to ensure patients stay housed if plans decide to terminate coverage. State regulators dispute that characterization.

The assisted living support is an optional Medi-Cal benefit, meaning plans can opt-into offering it to members and decide annually whether the program will continue. Assisted living support is part of CalAIM, California’s broad effort to improve Medi-Cal services and save money by stabilizing high-cost users who often end up repeatedly in emergency rooms. It pays a majority of the 24-hour service costs at board-and-care homes, memory care facilities, or larger group settings, while residents cover room-and-board fees.

The average nursing home, which offers a higher level of medical care, costs upwards of $10,000 per month, while an assisted living facility costs between $5,000 to $7,000 monthly.

The state created the benefit in part to relieve pressure on a separate assisted living program for low-income patients managed directly by the state, which has an 18,000 person cap and a three- to four-year waitlist.

Health Net operates Medi-Cal plans in 10 counties: Amador, Calaveras, Fresno, Inyo, Los Angeles, Mono, Sacramento, San Joaquin, Stanislaus, Tulare.

In an unsigned statement, a spokesperson for the company disputed the assertion that patients would be left without services and would end up unhoused. Affected members will receive care through their individual authorization date, and could be transitioned to nursing homes, back home with in-home supportive services, or to other programs, according to the statement.

“We are working closely with members, providers and care management teams to develop individualized transition plans based on each member's clinical needs and eligibility for other available programs and services,” the company statement said. 

The statement also said internal data showed the assisted living program “has not led to better care” in terms of fewer emergency room visits or days hospitalized.

Matt Johnstone helps his dad Jim put on his shoes while he sits at the edge of his bed in his room at an assisted living facility in North Hollywood on Aug. 13, 2026.

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Ariana Drehsler

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CalMatters

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Health Net told state regulators its decision was fueled partly by an increase in members moving from home to assisted living rather than from nursing homes, a trend that costs the plan money instead of generating savings, according to a termination notice sent to the Department of Health Care Services. The plan also blames regulators for changing program guidelines that had previously allowed Health Net to limit community transitions.

“The guidance raises concerns regarding program integrity and long term viability,” the notice reads.

The Department of Health Care Services, which oversees the program, refused an interview request. In an emailed statement, officials said the department would communicate with Health Net to “ensure member protections and continuity of care”

Health Net’s decision follows a similar one last year to terminate a separate CalAIM benefit with a provider in L.A. County, affecting hundreds of people in temporary medical housing.

“Their position is it’s less costly to offer no services than some services,” said Hagar Dickman, director of long-term services and supports for Justice In Aging.

No information sparks confusion, 'rumor mill'

When Johnstone first heard about Health Net’s decision, he searched the company’s website for information about the change: Nothing. Then, he picked up the phone.

“When I called into Health Net customer service, they didn't even know what the program is,” Johnstone said. He has not received a letter notifying him of the upcoming termination.

Jennifer Horcasitas-Glenn ran into the same problem. Her 75-year-old mother-in-law, Jacqueline Glenn, has dementia and Alzheimer's. Horcasistas-Glenn and her husband spent nine years caring for Jacqueline at home until recent hospitalizations made it impossible to continue. She has been in a memory care facility since May.

Horcasitas-Glenn said she was also notified of the change by a third-party provider, not Health Net, and hasn’t gotten answers from the insurer. Horcasitas-Glenn said she spent days bouncing between customer service representatives and supervisors who had never heard of the program before being transferred to a Health Net social worker who was aware of the changes but had no further information.

“I told her I have a plethora of questions I need answered. She said ‘I think you should forward all of your questions to this email,’” Horcasitas-Glenn said. To-date she has not received answers.

The health plan notified some major contractors that services would be terminated Oct. 7, according to providers interviewed by CalMatters. But Medi-Cal enrollees themselves have not been notified of changes by Health Net, according to advocates and multiple families interviewed for this story.

One of the biggest sources of confusion is when services will actually stop. Many of the plan contracts end in October, but the plan has an obligation to continue services until the end of the year, Dickman said.

“The question is, what's Health Net going to do after October 7? They don't have contracts with these facilities, so how are they going to provide?" said Jonathan Istrin, chairman of Libertana, one of the groups whose contracts were terminated. Libertana subcontracts with hundreds of assisted living facilities in California, Istrin said, and Health Net doesn’t have the infrastructure to pay those places directly.

Health Net must notify members of termination 30 days before the service end date. Providers aren’t certain whether notices will go out at the end of September or beginning of December. For some, the notices may come after members are already evicted, Shatara said..

“Right now it can feel like a rumor mill and nobody knows what they should do because Health Net has not been giving anyone any information,” Shatara said.

Matt Johnstone, left, and Russell Granger, right, help their father Jim get up from his bed at an assisted living facility in North Hollywood on Aug. 13, 2026.

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Ariana Drehsler

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CalMatters

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On Aug. 10, Horcasitas-Glenn said she received a letter from Health Net stating that approval for her mother’s memory care facility would be revoked a month early “at the request of the provider.” The provider told Horcasitas-Glenn that they had not requested an early termination and had instead asked Health Net how to accommodate patients who have a right to services until the end of the year. CalMatters independently confirmed this information.

“This is baloney. They’re not being transparent about anything, and they’re lying on documents,” Horcasitas-Glenn said. Customer service still doesn’t know what program she’s talking about when she calls.

According to state regulators, Health Net members are entitled to services until Dec. 31 as long as it is “clinically appropriate.” If the authorization for a member’s assisted living expires before the end of the year, they should request an extension.

State offers few consumer protections

Other than the 30-day notice, advocates say, the state has very few protections for patients when services are terminated.

Health Net has not given patients transition plans, and the state cannot guarantee patients will receive the same level of care elsewhere, Shatara said. Advocates and providers told CalMatters the Department of Health Care Services and Health Net have mutually referred questions to the other organization, offering no clear answers.

The Department of Health Care Services in an email argued its patient notification requirements are adequate, stating “Medi-Cal members have strong protections.” Some patient protections include the right to appeal or file a grievance with the plan, access to alternative services, and continuity-of-care requirements. The state also places responsibility with Health Net.

According to the termination notice filed with the state, Health Net members “will be transitioned to alternative care settings, including home, as appropriate.”

Jim smokes his pipe outside an assisted living facility in North Hollywood on Aug. 13, 2026.

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Ariana Drehsler

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CalMatters

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Pictures of Jim’s sister, Jim with puppies, books, a stuffed animal and a first-prize award for a motorcycle show sit on a nightstand in his room.

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Ariana Drehsler

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CalMatters

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For most patients, home is not an option, Shatara said. Many live on fixed Social Security incomes and give up their primary residence in order to pay room and board fees at care facilities that Medi-Cal doesn’t cover. Their needs are also too acute for family members to meet. The only other appropriate alternative care settings, Shatara said, are nursing homes and hospitals, which may not be able to handle the influx.

“It’s inevitable that people will end up in ERs and on the streets,” Shatara said.

Some families like Horcasitas-Glenn are contemplating switching to another Medi-Cal insurer that still provides the benefit, but have been told other plans don’t want to approve these expensive long-term services for new patients. Others, like Johnstone, are at a loss.

Johnstone’s dad turned a lifelong love of motorcycles and racecars into a successful autobody repair and restoration business in Southern California. Eventually, in his later years, undiagnosed dementia would trap his mind 20 years in the past, Johnstone said, causing him to make poor business decisions and take on enormous amounts of debt and work he could no longer perform. A terminal cancer diagnosis for Johnstone’s mother would also wipe out all of the family’s savings.

“There is nothing else,” Johnstone said.

Worried your loved one will be affected by changes to Medi-Cal services? Send tips to health@calmatters.org.

Supported by the California Health Care Foundation (CHCF), which works to ensure that people have access to the care they need, when they need it, at a price they can afford. Visit www.chcf.org to learn more.

This article was originally published on CalMatters and was republished under the Creative Commons Attribution-NonCommercial-NoDerivatives license.