OTG New York v. Ottogi America: a New Jersey federal court fines a lawyer $3,000 for a reply brief built on AI-hallucinated citations (2025)

The problem

OTG New York, Inc. and Ottogi America, Inc., rival distributors of the Korean food brand Ottogi, are locked in a contract fight on the U.S. East Coast. As the court recites, “Plaintiff seeks twenty million dollars in damages due to Defendant’s alleged unjust enrichment and breach of contract” (source). This story is not about who wins that dispute. It is about the fake law one side put in front of a federal judge.

Plaintiff’s counsel, Sukjin Henry Cho, filed a reply brief supporting a Motion to Consolidate (source). Reviewing it, the court found the cited cases “either (1) did not exist, (2) did not support Plaintiff’s propositions and/or were irrelevant to the issue at hand, or (3) did not contain the supposed quoted authority that Plaintiff asserted” (source). The court issued an Order to Show Cause why Cho should not be sanctioned under Rule 11 (source).

What was built

There was no legal-tech product here, only unverified generative AI standing in for research. Cho’s own response conceded that “[l]egal research was conducted with the support of generative AI tools and draft summaries, supplemented by targeted LexisNexis database searches” (source). The court was blunt about the mechanism: “Mr. Cho has confirmed that he indeed used AI, which provided him with hallucinated case law and propositions that he then incorporated into his reply brief without verification” (source). No specific AI product is named in the order, and LexisNexis appears only as a supplement to, not the source of, the fabricated authority (source).

The outcome

The court found Cho “violated Rule 11 due to his negligent certification and submission of unverified case law due in part to ‘overreliance on generative [AI] prompts during early-stage research’” (source). Weighing Cho’s prompt admission and remedial steps, “the mitigating factors lead the Court to conclude that a fine of $3,000.00 is sufficient to deter this conduct in the future” (source).

The monetary sanction: a fine of $3,000.00 under Rule 11(c), payable to the registry of the court within fourteen days (source). The court also ordered that Cho’s reply at ECF No. 42 “shall be marked as WITHDRAWN and shall be STRICKEN from the record by the Clerk of the Court” (source), and that within fourteen days Cho “shall self-report this Order to the disciplinary authority of the state bars of which he is a member and file proof of service on the docket” (source).

The $3,000 is the only monetary sanction. The court’s recital that district courts have imposed fines “ranging from $1,000 to up to $6,000” is a survey of other cases, not this one (source); the twenty million dollars is the damages sought in the underlying dispute, not any sanction (source).

Two independent newsrooms reported the sanction firsthand. Bloomberg Law: “A New Jersey attorney must pay a federal court $3,000 for misusing artificial intelligence in support of a motion to consolidate cases between feuding ramen noodle distributors” (source). Daily Voice: “Sukjin Henry Cho, who operates out of Fort Lee, was fined $3,000 by United States Magistrate Judge José R. Almonte for submitting fabricated case law in a motion connected to a contract dispute between OTG New York, Inc. and Ottogi America, Inc.” (source).

How this was verified

This is a court-adjudicated public record, so no client-confirmation call applies. The Tier-1 Opinion and Order (Doc. 48, filed 2025-09-18) was read against its RECAP copy, byte-tied by sha1 to organic Wayback captures of the storage.courtlistener.com PDF, and every quoted figure above was re-checked against that capture on 2026-08-04. Two independent reputable newsrooms, Bloomberg Law and Daily Voice, carry the $3,000 sanction and the AI finding firsthand, each confirmed against its own archived capture on 2026-08-04. The honest limit: this file verifies the order as entered on 2025-09-18. It does not independently confirm that the $3,000 was paid, nor whether the order was later modified, vacated, or reversed on any objection to the magistrate judge; a reader relying on the sanction’s finality should check the live docket.

Related case files

The clearest companion is the Coomer v. Lindell sanctions, where a federal court set the same $3,000 figure per attorney for an AI-drafted brief with nearly thirty defective citations: two courts, the same price, the same unchecked-AI mechanism. For the opposite ruling on attribution, see U.S. v. Hayes, where the court sanctioned a fake citation but explicitly declined to find that AI wrote it, a useful contrast with Cho’s own admission here. And for how much heavier the same fabricated-citation conduct can land, see Lnu v. Blanche, where the Ninth Circuit added six-month suspensions on top of the fines over a failure of candor.

Sources

Checked live on 2026-08-04. Tier 1 = the federal court’s own Opinion and Order; Tier 2 = independent press naming the parties.

1. U.S. District Court for the District of New Jersey, “Opinion and Order,” OTG New York, Inc. v. Ottogi America, Inc., No. 24-cv-07209 (BRM)(JRA), Doc. 48, filed 2025-09-18 (Tier 1, primary court document; RECAP copy byte-tied to a Wayback capture). https://storage.courtlistener.com/recap/gov.uscourts.njd.550641/gov.uscourts.njd.550641.48.0.pdf
2. Bloomberg Law, “AI Hallucinations Get NJ Attorney $3,000 Federal Court Sanction,” 2025-09-19 (Tier 2, independent legal newsroom carrying the $3,000 and AI finding firsthand). https://news.bloomberglaw.com/litigation/ai-hallucinations-get-nj-attorney-3-000-federal-court-sanction
3. Daily Voice, “AI Backfires: Fort Lee Lawyer Fined $3,000 For Fake Citations In $20M Case,” 2025-09-23 (Tier 2, independent regional newsroom naming the parties and figure). https://dailyvoice.com/new-jersey/fortlee/ai-backfires-fort-lee-lawyer-fined-3000-for-fake-citations-in-20m-case/