A split three-judge panel issued a reprimand against Pennsylvania attorney Daniel A. Pallen, who represents physician's assistant Stephen McCarthy, who is not a lawyer, in his challenge to the Drug Enforcement Administration's revocation of his clearance to prescribe medication, noting his use of artificial intelligence-modified briefs to argue that the DEA treated his client differently than defendants in similar cases.
In the majority opinion, Judge Cindy K. Chung expressed the court's disappointment with Pallen.
"Attorney has harmed his credibility with this court," Judge Chung said. "As attorney signed his brief and submitted it as an officer of the court, this court initially credited attorney with earnest, but mistaken, efforts in offering legal authority to this court. It was highly disappointing to learn that attorney's status as an officer of the court did not prevent him from blindly submitting erroneous authority and to learn that this court's confidence in him was misplaced."
Judge Jane Richards Roth wrote in an opinion that both concurred with and dissented from the majority that she would have gone further in punishing Pallen for the "hallucinated citations."
"Had attorney's violations been limited to incorrect citations, I would be more inclined to agree with my colleagues about the severity of the sanctions imposed," Judge Roth said. "I am troubled, however, by attorney's conduct after the government spent four pages of its response brief discussing the errors for each of the eight incorrect citations. This would have been the opportune time for attorney to recognize and remedy his mistakes."
Instead, Pallen "put his nose in the air" and argued that the government had missed the point, deeming the errors to be immaterial and related only to tangential details, according to Judge Roth.
Judge Roth also commented on what she saw as the majority's hesitation in imposing monetary penalties against Pallen for lack of precedent on AI-generated work in the Third Circuit, noting that other courts within the circuit and state courts have already done so.
"My comments should not be taken to persuade against the use of AI," Judge Roth said. "I agree with my colleagues that such technology may be useful when used with proper supervision and vetting. But punishing an attorney for failure to verify information obtained from AI is consistent with the standard to which attorneys historically have been held."
Pallen filed the brief in question in September 2024. According to Judge Chung's opinion, it was "riddled" with errors, inaccuracies and, in one instance, a citation to a case that did not exist. The government pointed this out in its response brief.
Even as Pallen prepared his reply brief, he did not check the citations, though he suspected that they were AI-generated, Judge Chung said.
Eventually, the court ordered Pallen to provide copies of the eight cases summarized in his brief — prompting him to check the citations and concede his lack of attention to the matter, according to Judge Chung.
"On one hand, attorney's conduct is somewhat mitigated by the actions he took after our show cause order. Attorney has displayed sincere contrition. He has been forthcoming and admitted his many failures to this court without minimizing his conduct. Attorney also states that he has taken corrective measures to prevent a similar incident from occurring in the future," Judge Chung said.
"On the other hand, the mitigating force of attorney's remedial conduct is lessened by the fact that he only made such efforts after we issued the show cause order. That he was not already verifying the accuracy of all citations in his briefs is itself concerning," she concluded.
The case stems from DEA enforcement proceedings against McCarthy, according to his appellate brief. The DEA revoked McCarthy's certification for prescribing medicine without written authorization from a licensed physician. An administrative law judge upheld the DEA's decision and McCarthy appealed to the Third Circuit.
Neither Pallen nor the U.S. Department of Justice immediately responded to a request for comment.
Circuit Judges Cindy K. Chung, Jane Richards Roth and Peter J. Phipps sat on the panel for the Third Circuit.
McCarthy is represented by Daniel A. Pallen.
The DEA is represented by Anita Gay of the Department of Justice.
The case is McCarthy v. DEA, case number 24-2704, in the U.S. Court of Appeals for the Third Circuit.
--Editing by Karin Roberts.
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