The Fine Was Never The Worst Part. In Tacoma The AI Citations Cost The Whole Case.
Every sanctions tracker counts dollars, because dollars are easy to count. LeDouxx v. Outliers is the case that shows the dollars were the cheap outcome all along, and it is the third AI failure in the same docket.
Every tracker of AI hallucination cases counts the same thing, because it is the only thing that is easy to count. Dollars. A lawyer files a brief with cases that do not exist, a judge writes an order, a number appears at the end of it, and the number goes in a spreadsheet.
The numbers have been climbing all year. $5,000 in 2023. $15,000 per attorney and an indefinite suspension in 2026. An Oregon winery dispute produced roughly $109,700 across two lawyers, the largest aggregate figure anyone has recorded.
Then a district judge in Tacoma wrote an order with no number in it at all, and it is the worst outcome on the entire list.
What happened in LeDouxx
LeDouxx v. Outliers, Inc., No. 3:24-cv-05808, United States District Court for the Western District of Washington, 2026 WL 2408808, decided August 18, 2026.
The plaintiff’s side put in expert reports. The attorney had used two AI tools to prepare them and, by his own account, did not understand how to operate either one. The experts whose names were on the reports did not check the citations. The citations were not real.
The court did not reach for Rule 11 and it did not write a dollar figure. It went to Federal Rule of Evidence 702, which is the rule that decides whether expert testimony is reliable enough for a jury to hear at all, and it held that the hallucinated citations made the opinions inherently unreliable. The order says the fabrications shatter his credibility with this Court.
The report was excluded. With the expert gone, the plaintiff had no evidence sufficient to reach trial. The defense moved for summary judgment, the court granted it, and the claims were dismissed with prejudice.
Why that is a different category
A sanction is a penalty on the lawyer. It is paid, it is unpleasant, and the case continues. Sometimes the client never learns the number.
An exclusion is not a penalty on the lawyer at all. It is an evidentiary ruling, and it lands on the party. The client loses the case. Not because the claim was weak, and not because a jury rejected it, but because the document meant to prove it turned out to be unverifiable.
That distinction matters for anyone trying to predict where this goes. Courts have spent two years working out how to punish lawyers. Rule 702 was already sitting there, needed no new doctrine, and does not require a judge to find bad faith, willfulness, or anything else that makes a sanctions order hard to write. It only requires the judge to conclude the opinion is not reliable. Citations to cases that do not exist make that conclusion very easy.
The third failure in the same docket
This is the part that should stop anybody treating LeDouxx as a freak event.
| Date | What happened in this one case |
|---|---|
| January 9, 2026 | Earlier expert exclusions in the same matter |
| July 24, 2026 | The attorney sanctioned for dozens of inaccurate factual and legal citations across at least five filings |
| August 18, 2026 | Expert report excluded under Rule 702, summary judgment granted, case dismissed with prejudice |
Three separate orders. The court warned, then it sanctioned, then it ended the case. Whatever process produced the first set of fabricated citations was still producing them seven months later.
Two people did not check, and only one of them was a lawyer
The lawyer ran the tools and said he did not know how they worked. That is its own problem and courts have been addressing it all year.
The other half is newer. The experts signed reports containing citations they had not verified. An expert report is not a brief. It is offered as the work of a person with specialized knowledge, and its authority comes from that person having actually done the analysis. A named expert who did not read the sources under his own signature is a much harder thing to explain than a rushed associate.
Nothing in the published record suggests the experts were sanctioned. They did not need to be. Their opinions simply stopped counting as evidence.
What this predicts
The exclusion route is cheaper for courts than the sanctions route. A sanctions order needs findings, notice, an opportunity to respond, and usually a hearing. A Rule 702 ruling is part of work judges already do on every dispositive motion.
It reaches people no sanctions order can. Experts, consultants, and anyone else whose work product enters a case through an attorney but was not written by one.
It will not show up in the trackers. Every AI hallucination database in circulation counts sanctions. An order excluding an expert report is filed as an evidentiary ruling, has no dollar figure, and in this instance is unpublished. The count of AI failures in litigation is almost certainly lower than the reality by whatever this category contains, and nobody knows how large that is.
It is the outcome clients should actually be told about. A lawyer explaining a $2,500 sanction is explaining an embarrassment. A lawyer explaining a dismissal with prejudice is explaining that the claim is gone and cannot be refiled.
The line worth keeping
Fabricated citations shatter his credibility with this Court, and credibility is not a thing a party gets to restore by paying for it. The fine was never the worst part. It was just the part that was easy to write down.