Was Versant Funding v. Teras Breakbulk Ocean Navigation Enterprises sanctioned over AI-generated citations?

Versant Funding v. Teras Breakbulk Ocean Navigation Enterprises (S.D. Florida, May 20, 2025) is a documented matter involving citations that could not be verified against the reporters named. The recorded outcome was: Monetary fines imposed: $1,000 (lead counsel) + $500 (local counsel); attorney's fees/costs deferred; CLE required. $1,500 in monetary penalties.

Which AI tool was involved in Versant Funding v. Teras Breakbulk Ocean Navigation Enterprises?

The order in Versant Funding v. Teras Breakbulk Ocean Navigation Enterprises does not identify a specific generative tool by name. The court treated the citations as the product of an unverified AI-assisted drafting workflow.

May 20, 2025 · AI sanctions database

Versant Funding v. Teras Breakbulk Ocean Navigation Enterprises

Versant Funding v. Teras Breakbulk Ocean Navigation Enterprises is one matter in the Veritas record of US court proceedings involving AI-generated citations that could not be verified against the reporters named. The summary below is drawn from the underlying court document, linked at the foot of this page.

Court: S.D. Florida
Date: May 20, 2025
Party: Lawyer
AI tool: Not identified in the order
Outcome: Monetary fines imposed: $1,000 (lead counsel) + $500 (local counsel); attorney's fees/costs deferred; CLE required
Penalty: $1,500 in monetary penalties.

FineProfessional sanction

What the record shows

Counsel admitted submitting what the court called a wholly fabricated, hallucinated case citation produced by AI without attorney verification; opposing counsel and the court could not locate the cited Travelers Casualty case in Westlaw or Lexis. The court fined pro hac vice counsel $1,000 and local counsel $500 into the court registry, required both to complete an AI-ethics CLE within 30 days, and ordered them jointly and individually liable for plaintiff's reasonable attorney's fees in an amount to be determined.

This entry reflects the court document as filed. The citations at issue could not be located in the reporters named at the time of the order. The reading here is descriptive of the public record and is not legal advice.

Source documents

Primary court document ↗

The test this filing did not run

Every matter in this record shares one mechanism: a citation that did not resolve to an opinion in the reporter named, in a brief that was filed before any verification step ran. Veritas runs that step. The Filing Risk Scanner extracts each citation, resolves it against reporter and public-record sources, and returns a verdict on each one — located, partial, or not located in reporter — before the brief is signed.

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Filed under · AI sanctions database · S.D. Florida

About this publication

Veritas is a pre-filing citation verification platform for law firms and in-house counsel. Every post on the audit log is written by the Veritas editorial team and cross-checked against the underlying sanctions order, standing order, or published opinion it references. Reporter citations are read in their named volumes. Quotations from court orders are checked against the docket.

The product was built by Andrew Zoll, founder of Veritas, who tracks generative AI sanctions in federal and state courts and turns each documented failure mode into verification logic the scanner runs. Veritas was built after the canonical Mata v. Avianca sanctions order made the verification gap a published failure mode of the bar.

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