The dangers of using generative AI to draft legal filings without rigorous human review are no longer theoretical. A fresh opinion out of the Middle District of Florida — issued just days ago — lays bare what happens when an attorney submits AI-generated filings riddled with fabricated legal authority, then fails to accept responsibility when confronted. The fallout: sanctions, a public rebuke from a federal judge, and a detailed paper trail that has now made its way into a second federal lawsuit. See Leafwell, Inc. v. The Doc App, Inc. d/b/a My Florida Green, No. 2:25-cv-01132-JES-DNF (M.D. Fla. Apr. 24, 2026)
The Players and the Dispute
Both Leafwell, Inc. and The Doc App, Inc. (doing business as My Florida Green) operate in Florida’s medical marijuana certification space. Leafwell is a telehealth platform helping patients obtain medical marijuana certifications; My Florida Green performs a similar function and is led by CEO Nicholas Garulay, with Jason Castro, Esq. serving as its in-house corporate counsel.
The dispute began in August 2025 when My Florida Green sent Leafwell a demand letter objecting to its “cost-free” medical marijuana certification events and requesting information about its financial relationships with dispensaries and marketing firms. When Leafwell did not respond, My Florida Green filed a Verified Complaint in state court, which Leafwell removed to the Middle District of Florida — setting off a chain of litigation that now spans at least three separate federal actions.
The AI Problem: Hallucinations From the Start
The pivotal issue for the legal profession is what happened next. According to the Amended Complaint — accepted as true at this stage of the proceedings — the Verified Complaint filed by My Florida Green in the First Federal Action “contained numerous hallucinations which were the result of the use of generative artificial intelligence.” The court defined hallucinations plainly in a footnote: “factual inaccuracies or fake legal authorities created by a generative AI chatbot.”
It did not stop there. My Florida Green also filed a Motion for Temporary Restraining Order and Preliminary Injunction that was “filled with hallucinations where AI made up legal authority, misquoted cases, and misrepresented propositions in cases.” When Leafwell identified these problems in its response, My Florida Green filed an amended motion — which was then stricken for failure to comply with the Local Rules.
The Show Cause Order and Sanctions
The same day the amended motion was stricken, District Judge Sheri Polster Chappell issued an Order to Show Cause addressing the “numerous misrepresentations of legal authority.” Castro’s response — rather than acknowledging the problem — “primarily blamed Leafwell’s counsel for any issues in the filing.” My Florida Green subsequently voluntarily dismissed the First Federal Action, but even after dismissal, Judge Chappell issued an Opinion and Order imposing monetary sanctions against Castro for the hallucinations and his failure to take responsibility.
This episode raises a critical professional responsibility point that every litigator needs to internalize: courts are not forgiving of attorneys who deploy AI carelessly and then deflect blame when caught. The conduct here — submitting fabricated citations, then blaming opposing counsel — is precisely the kind of behavior that triggers not just sanctions, but lasting reputational damage memorialized in public judicial opinions.
The Second and Third Federal Actions
Perhaps most striking is that My Florida Green then filed a second state court action in December 2025, and that action too allegedly “continues to utilize its AI-generated complaint with hallucinations.” This pattern of repeated AI misuse across multiple filings underscores a systemic failure in the attorney’s workflow — not a one-time oversight.
Leafwell responded by filing the instant action (the “Second Federal Action”) asserting claims for declaratory relief, anti-suit injunction, abuse of process, negligent supervision, and tortious interference. The litigation is now a sprawling three-case complex, all arising from what began as a competitor dispute in the medical marijuana certification industry.
What the Court Actually Decided: Three Key Rulings
Senior District Judge John E. Steele’s April 24, 2026 opinion resolves three motions and provides important guidance on several doctrines.
Diversity Jurisdiction and the “Nerve Center” Test: The court denied My Florida Green’s motion to dismiss for lack of subject matter jurisdiction. Despite a Florida Secretary of State annual report listing Leafwell’s principal place of business as Miami, Florida, the court found the report insufficient to defeat diversity — a company’s “nerve center” is determined by where actual direction, control, and coordination occur, not by a government form filed after litigation began. Leafwell’s CEO is in the United Kingdom, its COO in Virginia, board meetings occur outside Florida, and its technology is developed by contractors in Portugal and Romania. This is a useful reminder that registered agent addresses and annual reports do not control the diversity jurisdiction analysis.
Counts I and II — Dismissed Without Leave to Amend. Leafwell’s declaratory judgment claim seeking a ruling that My Florida Green was vicariously liable for Castro’s sanctions was dismissed because no actual controversy yet exists. The sanctions order is not final, Castro has not refused to pay, and Leafwell was essentially asking a second district judge to interpret and expand a nonfinal order issued by Judge Chappell — something Judge Chappell herself can address under Fed. R. Civ. P. 54(b). The anti-suit injunction claim failed because 28 U.S.C. § 2283 does not create a private cause of action, and the first-to-file doctrine does not apply when the competing cases are before courts within the same division.[1]
Count III — Abuse of Process Dismissed With Leave to Amend. The abuse of process claim was partially barred by Florida’s absolute litigation privilege — which shields the filing of complaints and motions even when they contain AI hallucinations — and was otherwise insufficiently pleaded. The court confirmed that Florida’s litigation privilege applies “to all causes of action” for acts occurring during judicial proceedings, including preliminary conduct. However, the privilege did not shield the pre-litigation demand letter, and the court granted leave to replead with more specific factual allegations of post-process misuse.
Takeaways for Litigators
This case is a vivid illustration of several converging lessons that practitioners cannot afford to ignore. Every citation generated by an AI tool must be independently verified by a human attorney before any filing goes out the door — AI tools, including the most sophisticated large language models, fabricate case citations with alarming confidence. When an error is discovered, courts expect attorneys to acknowledge it and take corrective action, and blaming opposing counsel for your own filing errors is a near-guaranteed path to sanctions. Florida’s absolute litigation privilege will shield pleadings and motions from tort claims — even defective, AI-generated ones — but pre-litigation demand letters may not enjoy the same protection, and the privilege does not insulate attorneys from Rule 11 and inherent-power sanctions. Attempting to use a declaratory judgment action to preemptively shift liability for a nonfinal sanctions order will not survive a motion to dismiss. Finally, corporate annual report filings are not dispositive of principal place of business for diversity purposes, particularly when filed after the lawsuit commences.
The Leafwell/My Florida Green saga is far from over — three federal cases remain active, Count III survives with leave to amend, and the underlying sanctions amount in the First Federal Action has not yet been determined. But the April 24, 2026 opinion already offers a valuable roadmap for understanding both the professional responsibility risks of unvetted AI-generated filings and the procedural doctrines that govern multi-front litigation of this kind.
This article is provided for informational purposes only and does not constitute legal advice. Case No. 2:25-cv-01132-JES-DNF (M.D. Fla. Apr. 24, 2026), Opinion and Order by Senior U.S. District Judge John E. Steele.
