Leiske v. Kidd (Del. Ch.): one of Delaware's oldest firms — Richards, Layton & Finger — ordered to show cause over GenAI-hallucinated citations. No sanction yet.

The problem

On July 1, 2026, Vice Chancellor Lori W. Will of the Delaware Court of Chancery issued a letter opinion in Leiske v. Kidd, C.A. No. 2025-0426-CDW (LWW), an advancement case in which the plaintiffs’ answering brief (filed Jan. 22, 2026) drew a defense reply that, in the court’s words, “the defendants’ reply brief identified that the Answering Brief contained fictitious citations, fabricated quotations, and hallucinated legal propositions” (source). Plaintiffs’ counsel then filed a letter acknowledging “the use of a generative artificial intelligence (“GenAI”) tool to revise the text of the” answering brief, and the court recorded that “Counsel admitted failing to verify the accuracy of the citations before filing, attributing the oversight to a paralegal’s review” (source). What makes this matter stand out from the growing pile of AI-hallucination cases is the firm on the receiving end: Richards, Layton & Finger, P.A. (RLF), one of Delaware’s oldest and largest corporate-law firms, in the court where much of American corporate law is made (source).

What was built

No vendor product is at issue and the opinion names only “a generative artificial intelligence (“GenAI”) tool,” not a product (source). The Vice Chancellor grounded the matter in Court of Chancery Rule 11, writing that “The submission of hallucinated legal propositions raises an inference of a Rule 11(b) violation” and that “the obligation to conduct a reasonable inquiry under Rule 11, are nondelegable” (source). Those duties, she held, “Counsel cannot discharge those obligations by relying on a paralegal, much less on” an artificial intelligence program (source). She did not stop at the individual lawyer: citing Rule 11(c)(1), that “a law firm must be held jointly responsible for violations committed by its partners, associates, or employees,” she held that “the firm must answer alongside the individual signatory” (source).

The outcome

The operative order directs that “Richard P. Rollo, Esq.—the signatory to the brief and letters—and Richards, Layton & Finger, P.A. (“RLF”) are ordered to show cause why they should not be sanctioned under Rule 11(c) and this court’s inherent authority” (source). The court set a deadline: “By no later than July 15, 2026, Mr. Rollo and an authorized representative of RLF must each file an affidavit showing good cause, if any, why sanctions should not be imposed” (source). This is the honest boundary of the record — no sanction has been imposed and there is no dollar figure; the Vice Chancellor wrote that “Upon receipt and review of the affidavits, I will determine whether an evidentiary hearing or oral argument is necessary, or whether the Rule to Show Cause will be resolved on the papers” (source). By the deadline the firm answered: Bloomberg Law reported that “Richard Rollo, a director at Richards, Layton & Finger PA, and the firm’s president, Paul Heath, apologized in affidavits for burdening the court with fabrications in a Jan. 22 brief, and for a follow-up filing that failed to fully correct the errors” (source). Law.com’s Delaware Business Court Insider independently confirmed the pending, no-sanction posture, reporting that “Vice Chancellor Lori Will wrote that based on the responses, she would evaluate whether an evidentiary hearing or oral argument would be necessary to determine if sanctions should be leveled against the firm itself, the director who signed off on the filings and chairs the firm’s AI subcommittee, or both” (source). As of this writing the Vice Chancellor has not ruled on whether to impose a sanction (source).

A note on sources

The load-bearing facts — the show-cause order, the Rule 11 grounds, and the firm-and-signatory posture — rest on a Tier 1 primary: the court’s own signed July 1 letter opinion, retrieved from the CourtListener durable store and byte-integrity-tied by CourtListener’s published SHA1 (597a328e674296793791e6cbf1b572806552529b, matching the downloaded 168,728-byte payload). The weakest load-bearing sources are the two Tier 2 newsrooms that carry the affidavit responses: Bloomberg Law sits behind a subscription, and the Law.com Delaware Business Court Insider article is paywalled, with only its archive-bound dek publicly verifiable. Both report the respondents’ apologies and the not-yet-sanctioned posture — those affidavit apologies are the respondents’ own filings answering the order, not a court finding of a violation. The specific GenAI tool is unnamed on the record, and the advancement merits are a separate matter from this collateral Rule 11 issue.

How this was verified

Method: Court-origin verification. The signed Leiske v. Kidd letter opinion (Del. Ch., July 1, 2026) (Will, V.C.) was fetched from the CourtListener durable store and byte-integrity-tied by CourtListener’s published SHA1 (597a328e674296793791e6cbf1b572806552529b == the downloaded 168,728-byte payload; sha1-b32 LF5DFDTHIKLHSN4R43F7DNLSQBSVEUU3) as the Tier 1 primary for every court quotation. The pending, no-sanction posture was independently corroborated by two mutually independent Tier 2 newsrooms — Bloomberg Law (Jennifer Kay, July 15, 2026) and Law.com’s Delaware Business Court Insider (Ellen Bardash, July 16, 2026), the latter bound through organic Wayback capture 20260717234752 whose payload byte-ties to the CDX digest. Date: 2026-07-26. No sanction and no dollar figure exist on this record; any penalty figure attached to this matter would be fabrication.

Related case files

• Kjoller v. Superior Court — California’s high court directed a show-cause order over a prosecutor’s AI-fabricated brief, with no sanction yet imposed
• McCarthy v. DEA — a federal appellate first-impression public reprimand for AI-fabricated citations, with no monetary penalty
• Scott v. Illinois HRC — a state appellate court that did impose a $15,000 sanction over ChatGPT-fabricated citations
• Mavy v. Commissioner of Social Security — pro hac vice revoked and a bar referral after 12 of 19 citations were AI-fabricated

Sources

1. Court of Chancery of the State of Delaware (Will, V.C.) · Letter opinion, Leiske v. Kidd, C.A. No. 2025-0426-CDW (LWW) · 2026-07-01 · https://courts.delaware.gov/opinions/download.aspx?id=397720 — Tier 1 (primary, court-origin, byte-tied by CourtListener SHA1)
2. Bloomberg Law (Jennifer Kay) · “Delaware Law Firm Seeks to Avoid Punishment for Its AI Gaffes” · 2026-07-15 · https://news.bloomberglaw.com/daily-labor-report/delaware-law-firm-seeks-to-avoid-punishment-for-its-ai-gaffes — Tier 2 (independent newsroom, subscription)
3. Law.com — Delaware Business Court Insider (Ellen Bardash) · “Responding to Vice Chancellor, Richards, Layton & Finger Directors Address AI Hallucinations” · 2026-07-16 · https://www.law.com/delbizcourt/2026/07/16/responding-to-vice-chancellor-richards-layton—finger-directors-address-ai-hallucinations/ — Tier 2 (independent newsroom, paywalled; archive-bound dek)