Feb 25 (Reuters) - Three lawyers suing Walmart ( WMT ) in a

personal injury lawsuit must pay fines totaling $5,000 for

citing fake cases generated by artificial intelligence in a

court filing, a federal judge ruled.

The lawyers, including two from national law firm Morgan

& Morgan and one from a smaller firm, had an ethical obligation

to ensure that the cases they cited were real, U.S. District

Judge Kelly Rankin in Wyoming said in his sanctions order on

Monday.

"As attorneys transition to the world of AI, the duty to

check their sources and make a reasonable inquiry into existing

law remains unchanged," Rankin wrote.

Judges across the country have questioned or disciplined a

growing number of lawyers over the past two years for including

AI-generated cases and quotations in court documents. Examples

have cropped up in at least nine lawsuits since chatbots like

ChatGPT ushered in the AI era, highlighting a new litigation

risk.

Rankin imposed a $3,000 fine on Rudwin Ayala of Morgan &

Morgan, who earlier this month apologized and said he used an

internal AI program that "hallucinated" the cases, which he

incorporated into a filing in the case.

The judge also removed Ayala from the lawsuit, and he

imposed fines of $1,000 each on T. Michael Morgan and local

counsel Taly Goody of Goody Law Group for not doing enough to

ensure the accuracy of the filing that Ayala drafted.

Ayala, Morgan and a representative for Morgan & Morgan did

not immediately respond to requests for comment on Tuesday.

Morgan is the son of Morgan & Morgan founder John Morgan,

according to past media reports.

Goody said in an email that she did not receive the filing

to review before it was submitted, and pointed to an earlier

explanation she provided to the court.

Walmart ( WMT ) declined to comment. It has denied the allegations

in the underlying lawsuit, which accuses the retailer of selling

a defective hoverboard toy that allegedly caught fire and burned

down the plaintiffs' house. The case is scheduled to go to trial

next month.

In deciding sanctions, the judge said he weighed the fact

that lawyers "have been on notice" about generative AI's ability

to hallucinate cases. He said Ayala's "honesty and candor" and

steps taken by Morgan & Morgan to head off future incidents

helped lead to a less severe punishment.

"When done right, AI can be incredibly beneficial for

attorneys and the public," Rankin wrote. "The instant case is

simply the latest reminder to not blindly rely on AI platforms'

citations regardless of profession."

In a separate case, a federal magistrate judge in Indiana

last week recommended a $15,000 fine for a lawyer who submitted

three briefs that had non-existent case citations generated by

AI and referred him to the chief judge for possible additional

discipline.