Daniel A. Pallen represented Stephen McCarthy in an appeal challenging a Drug Enforcement Administration decision. In his opening brief, Pallen included summaries of eight DEA adjudications that were generated by artificial intelligence and provided by a non-attorney assistant. Seven of the summaries contained significant factual and legal inaccuracies, and one cited authority did not exist at all. Despite being alerted to these errors by the government's response brief, Pallen filed a reply brief characterizing the mistakes as "immaterial misstatements" and "minor discrepancies" without ever verifying the citations.
Writing for the panel, Circuit Judge Chung found that Pallen's conduct violated Pennsylvania Rule of Professional Conduct 1.1, which requires competent representation including "thoroughness and preparation reasonably necessary for the representation." The court noted that "competent representation required that Attorney be so thorough as to check all the citations in his Opening Brief before signing and filing it," especially given that the legal authorities were provided by a non-attorney. While the court considered whether Pallen violated the duty of candor rule, it ultimately concluded he did not act "knowingly" enough to trigger that violation.
The disciplinary proceedings began after the Third Circuit ordered Pallen to provide copies of the cited adjudications in May 2025. Only then did Pallen finally check the authorities and discover their inaccuracies. He admitted he first suspected AI had been used in early February 2025 and confirmed it in mid-February, but took no action until the court's order. The court held a show-cause hearing in August 2025 after Pallen conceded his conduct violated disciplinary rules.
The Third Circuit imposed a reprimand rather than monetary sanctions, citing this as the court's first opportunity to address AI use and noting that Pallen showed "sincere contrition." However, the court warned that "violators may well face any of the sanctions available" in future cases now that precedent has been set. Judge Roth wrote separately, arguing for more severe sanctions and finding additional violations of the duty of candor rule, emphasizing that attorneys need no special warning about verifying the accuracy of their submissions.