Tag: 2023 News

ChatGPT is a chatbot developed by OpenAI. It is designed to be a conversational AI, and it has been praised for its ability to generate human-quality text. Microsoft and OpenAI have a long-term partnership that began in 2019. Microsoft invested $1 billion in OpenAI and became its exclusive cloud provider. This partnership has allowed Microsoft to integrate ChatGPT into its products and services, such as its Bing search engine. Google Bard is a conversational AI chatbot developed by Google AI. These three (of many) examples are based upon what is known as Generative AI.

Generative AI is a type of artificial intelligence that can create new content, such as images, text, and music. It does this by learning from existing data and then using that knowledge to generate new outputs. Unfortunately, the technology is capable of what the industry refers to as “hallucinations.” An AI hallucination refers to the phenomenon where an artificial intelligence system generates responses that are not based on real-world data.  Researchers and developers are actively working to mitigate and minimize hallucinations in AI systems, as they can hinder the reliability and trustworthiness of the technology.

Generative AI can be used to write movie scripts, create music, or write documents.  This is not without controversy and criticism. For example, the use of AI by college students to write essays has been a controversial topic in recent years. Some people believe that AI is a valuable tool that can help students to improve their writing skills, while others believe that it is a form of academic dishonesty and plagiarism. And now the controversial use of Generative AI has worked its way into courtrooms.

Steven Schwartz, who has worked for Manhattan law firm Levidow, Levidow & Obermam for three decades, apologized repeatedly during his emotional reading of a formal statement before Senior U.S. District Judge P. Kevin Castel who is overseeing potential sanctions.

Schwartz’s court filings included fake case citations generated by ChatGPT. According to the report by Courthouse News, he apologized for getting duped by the artificial intelligence tool. “It just never occurred to me that it would be making up cases,” Schwartz testified, explaining that he was unable at the time suspend disbelief that ChatGPT could generated totally fabricated responses to his research inquiries.

“I deeply regret my actions,” Schwartz said in court. “I have suffered both professionally and personally due to the widespread publicity. I am both embarrassed and humiliated and extremely remorseful. To say that this has been a humbling experience would be an understatement.”

The lawyer’s attorneys, Ronald Minkoff and Tyler Maulsby from Frankfurt Kurnit Klein & Selz, each argued that Schwartz made a careless mistake and should have noticed the red flags along the way but shouldn’t be accused of acting in bad faith. “There has to be actual knowledge that Mr. Schwartz knew he was providing bad cases … or that ChatGPT would be providing bad cases,” Maulsby said.

U.S. District Judge Castel did not immediately rule on punishment. See Mata v. Avianca, Inc., No. 22-cv-1461 (Doc. 31) (S.D.N.Y. May 4, 2023) (issuing rule to show cause where “[a] submission filed by plaintiff’s counsel in opposition to a motion to dismiss is replete with citations to nonexistent cases.”).

In the wake of publicity about Schwartz’s case, a Texas judge issued an order banning the use of generative artificial intelligence to write court filings without additional fact-checking conducted by an actual person.

According to the order given by Judge Brantley Starr who sites on U.S. District Court for the Northern District of Texas: “These platforms in their current states are prone to hallucinations and bias. On hallucinations, they make stuff up – even quotes and citations. Another issue is reliability or bias. While attorneys swear an oath to set aside their personal prejudices, biases, and beliefs to faithfully uphold the law and represent their clients, generative artificial intelligence is the product of programming devised by humans who did not have to swear such an oath. As such, these systems hold no allegiance to any client, the rule of law, or the laws and Constitution of the United States (or, as addressed above, the truth).”

The new requirement comes after a lawyer representing a man suing an airline used ChatGPT to prepare a legal brief, which was discovered to be laden with errors, including made-up court cases.

“We’re at least putting lawyers on notice, who might not otherwise be on notice, that they can’t just trust those databases,” Starr told Reuters. “They’ve got to actually verify it themselves through a traditional database.”

As another example, Magistrate Judge Gabriel A. Fuentes in Illinois similarly implemented a standing order that requires parties using generative AI tools in document preparation to disclose such usage in their filings.The disclosure should include specific details about the AI tool employed and the manner in which it was utilized. The judge further stated that reliance on an AI tool may not constitute reasonable inquiry under Federal Rule of Civil Procedure 11.

Five Guys Enterprises, LLC is an American fast food chain focused on hamburgers, hot dogs, and french fries. It is headquartered in Lorton, Virginia. Five Guys has over 1,600 locations in the United States, Canada, Europe, and Asia. The company is privately owned and operated by the Murrell family. The state with the most number of Five Guys locations in the US is California, with 128 restaurants, which is about 9% of all Five Guys restaurants in the US.

In December 2018, a class action lawsuit was filed by lead plaintiff Jeremy R, Lusk in the United States Federal District Court in Fresno California against Five Guys Enterprises alleging that the company violated California labor laws by denying its workers breaks and overtime pay. The lawsuit was filed on behalf of 2,206 non-exempt workers at the gourmet burger chain. Lusk worked as an hourly, non-exempt, manager-in-training at a Five Guys establishment in California from August to November 2016.

Lusk alleged that while working as an hourly, non-exempt employee, he and class members were not always permitted to take 30-minute meal breaks and 10-minute rest breaks for each 4-hour work period as it would be too busy to do so. And that he and class members were required to perform work off- the-clock as they would have to clock out but continue to perform work, such as counting out the cash register, which may take up to twenty minutes.

Lusk also alleged that he and class members were required to utilize their own personal vehicles to perform their job duties, such as travelling to and from other restaurants owned by Defendants to pick up food and supplies and Five Guys did not reimburse them for utilizing their own personal vehicles to do so.

This conduct was the basis of his claims under Labor Code §§ 203 and 226 and the Unfair Competition Law for failure to pay for all time worked, failure to provide legally compliant meal and rest breaks, failure to reimburse, and failure to provide meal and rest periods.

Plaintiff finally alleged that Defendants obtained his and class members’ employment applicants’authorization to procure background check reports through the use of a disclosure form that did not comply with the Fair Credit Reporting Act (FCRA),the California Consumer Credit Reporting Agencies Act ( CCRAA) or Investigating Consumer Reporting Agency Act (ICRAA) requirements. However verified discovery responses later established the Defendants had not actually run any background checks on any employees or applicants, including Plaintiff.

In October 2019, Five Guys and the plaintiffs agreed to a $1.2 million settlement. However, the settlement was rejected by a California federal judge on December 23, 2019, the Court without a hearing and identified several issues that needed to be addressed.

On May 18, 2020, Plaintiff filed a First Amended Motion for Preliminary Approval, which addressed the issues raised by the Court. However, on October 19, 2020, the Court again denied Plaintiff’s motion and found more issues that needed to be addressed.

On February 26, 2021, Plaintiff filed a Supplemental/Second Amended Motion for Preliminary Approval. On June 1, 2021, the Court denied Plaintiff’s motion.

On September 25, 2021,Plaintiff filed a Third Amended Motion for Preliminary Approval. On January 24, 2022, the Court denied Plaintiff’s motion.

On July 25, 2022, Plaintiff filed a Fourth Amended Motion for Preliminary Approval. On October 3, 2022, the Court approved Plaintiff’s amended motion without a hearing in its Order on Plaintiff’s Fourth Amended Motion for Preliminary Approval. The Court set the Final Approval Hearing for March 27, 2023, which was later continued to another date..

In a brief filed April 13, 2023, the Five Guys employees urged U.S. District Judge Jennifer Thurston to green light the settlement — seven months after they received preliminary approval of the deal.

This proposal is the fifth due to the judge’s questions on the four previous occasions. With the new agreement of $1.2 million, each claimant could receive up to $900, dependent on the final plaintiffs’ legal fees.

The Five Guys employment law class action is one of several recent lawsuits alleging that the company violated labor laws. In 2022, a former employee filed a lawsuit alleging that Five Guys violated the Illinois Biometric Information Privacy Act (BIPA) by requiring employees to scan their fingerprints to clock in and out of work. In addition, Five Guys has been hit with a negligence class action lawsuit alleging that the company failed to properly secure the private information of individuals who applied for employment with the company.

Combating insurance fraud requires understanding the psychological factors that drive consumers to engage in fraudulent activity. The new Coalition Against Insurance Fraud’s study provides important insights into these factors, such as the perceived likelihood of being caught and the perceived severity of the consequences of committing insurance fraud.

The study “Who Me? Who Commits Insurance Fraud and Why” analyzes how American consumers view insurance fraud and insurance crime and delves into the psychology of insurance fraud to understand the motivations and justification for the crime derived from in-depth interviews with those convicted of insurance fraud.

A significant number of Americans aged 45 and younger show a high level of tolerance for insurance fraud – even feeling envious of those who commit it – according to a new survey of insurance consumers by Verisk and the Coalition Against Insurance Fraud.

The study found that 87-96% of older respondents consider insurance fraud a crime, while only 75% of those under age 45 consider it a crime, with the percentage skewing downward by age to only 64% for the youngest group.

Other findings include:

– – More than 36% of all Americans believe it’s acceptable to submit an inflated auto damage claim
– – Over 30% of 25-34-year-olds “definitely would” submit a fraudulent property damage claim
– – 27% of those 18-24 would commit workers’ compensation fraud, compared to less than 10% of those 45 and older
– – Over a quarter of those 18-34 are “motivated” to commit insurance fraud compared to less than 7% of those over 45

Completing the “insurance fraud trifecta” the study also looked more closely at attitudes toward submitting a fraudulent workers compensation injury claim. Drawing from the combined overall responses, 5.71% of persons admitted to have already submitted a non-job injury to their employer to be paid. Based on the Coalition’s study in 2022 on Workers Compensation Fraud this alone could constitute nearly $1.5 billion each year of fraudulent workers compensation claim payments.

Others have not yet had the chance. Persons who say they “definitely would” submit such fake injury claims accounted for 11.36% of responses, even exceeding those who told us they “might” consider making such a claim at 10.50%. Collectively these groups accounted for 27.57% of all respondents, yet again representing a very high acceptance rate for the commission of insurance fraud in our nation across multiple lines of insurance, and even when doing so would involve not only lying to the insurance carrier, but also to your employer.

“This study should sound the alarm for insurers, consumer activists, regulators, and legislators on the state of fraud in America. While it’s marginally reassuring that 84% of Americans in the survey consider insurance fraud a crime, the 16% that do not consider it a crime potentially represent more than 53 million Americans,” said Matthew Smith, executive director of the Coalition Against Insurance Fraud. “There is a need for consumer education on the harm insurance fraud crimes have on our economy and on every American citizen and family.”

Sadly, the change in societal attitude toward insurance fraud has been discovered in other surveys on other topics.

Several years ago, the Pew Memorial Trust released a report finding younger Americans to have “emerged into adulthood with low levels of social trust.” Pew noted, “The future of an ethical society is looking grim and we can expect even more fraud in the future.”

The recent book The Man Who Broke Capitalism cited a study by McKinsey finding 61% of current American CEOs would be willing to violate federal and state laws if necessary to meet quarterly financial reporting expectations of Wall Street investors.

Lewis Brisbois Bisgaard & Smith LLP is a large, international law firm with over 1,500 attorneys in 34 offices across the United States, Canada, Europe, and Asia. The firm was founded in 1965 and is headquartered in Los Angeles, California.

In addition to insurance defense, It has a range of legal services such as complex litigation, including class actions, mass torts, and product liability cases. Lewis Brisbois also has a significant practice in representing businesses in a variety of industries, including healthcare, technology, and energy.

Last month John Barber, who was chair of the Lewis Brisbois’ employment practice, said at least 110 lawyers were leaving Lewis Brisbois after signing agreements to join a newly-formed spinoff firm and as many as 140 lawyers could eventually join the new firm, Barber Ranen. Barber will lead the firm along with Jeffrey Ranen, who was a national vice chair of the labor and employment practice at Lewis Brisbois.

Barber Ranen would open three physical offices in Los Angeles, Newport Beach, and San Francisco, Barber said, with other lawyers working remotely in Sacramento, Seattle, Salt Lake City, Boston, Denver, Pittsburgh, Portland, Las Vegas and Phoenix.

The Barber Ranen rationale for leaving was to “build something that’s reflective of our values and our beliefs,” Barber told Above The Law. “We wanted to lead with empathy, collaboration and compassion, to do it our way and not have any baggage,” Ranen told the Los Angeles Business Journal about the formation of Barber Ranen.

But this week Above the Law, and other media sources are reporting “Now, Barber and Ranen are making headlines once again, and this time, the news is quite alarming.”

According to the New York Post, Barber and Ranen are alleged to have engaged in racist, misogynistic, homophobic and antisemitic language about their clients and colleagues while at Lewis Brisbois, according to a review of internal emails released Monday morning.

Lewis Brisbois found the problematic emails after an audit triggered by a formal complaint about Barber and Ranen, according to two sources familiar with the matter. The firm said it is now conducting a thorough review of Barber and Ranen’s correspondence and are interviewing other employees who had interacted with the pair. “We are deeply troubled by their use of prejudiced language and racial and cultural slurs aimed at colleagues, clients, attorneys from other firms, and even Judges,” the firm’s leader said in a statement.

Barber Ranen CEO Tim Graves released a statement Monday confirming that the two men had resigned following the discovery of the emails.  “The remaining Equity Partners express their disappointment and disdain for the language Mr. Barber and Mr. Ranen used. We will form a new firm. We ask for the support of our friends and colleagues while we heal and plan our path forward.”

The first release of these emails was made by Lewis Brisbois to Forward, a non-profit that claims to be “the most widely read Jewish newspaper anywhere.” Forward said that “The firm released a larger tranche of inflammatory correspondence from the attorneys targeting other groups, which was first reported on by the New York Post on Saturday.”

According to Forward, the internal emails go back to 2012. and “reveal the two cultivated a culture of bigotry and disparagement.”

Robert Glassman, a member of the board of directors at Los Angeles’ Stephen S. Wise Temple and a partner at Panish Shea Boyle Ravipudi, said he worked on dozens of cases against Lewis Brisbois and found it appalling that “this kind of hatred still permeates itself in the Los Angeles legal community.”

In a Sept. 13, 2012 email, for example, Ranen wrote to Barber, “I forgot to write that we will not hire Jews” after the latter recommended a person – his or her identity was redacted by the company – for a litigation contract. In another email earlier that year, Ramen told Derek Sachs, a former partner at Lewis Brisbois, “This is the reason why people don’t like Jews,” in response to an invoice submitted to them. In a June 2012 email thread that begins with discussing a new hire, Ranen referred to Barber as a “Jew” for owing him money.

Many of the shocking missives obtained by The Post from the pair’s former firm “were also racist or anti-LGBTQ.”

Critics ripped the two men’s behavior and the firm’s hypocrisy.

“Though they may pretend to have founded their new firm in pursuit of ‘empathy and compassion,’ it is beyond any doubt that they are incapable of doing so,” civil rights activist Al Shaprton told The Post. “I am calling on The State Bar of California to conduct a full review of their character and licenses to practice law. Though these emails alone are beyond sufficient to question Barber and Ranen’s integrity, it is easy to imagine they are just the tip of the iceberg of their intolerance toward communities of color, women and the LGBT community.”

Barber and Ranen did not return multiple messages seeking comment.

The Barber Ranen exodus followed an earlier announcement this January that Atlanta-founded labor and employment law firm Constangy, Brooks, Smith & Prophete added 32 cybersecurity and data privacy lawyers from Lewis Brisbois Bisgaard & Smith. The law firm said it will open six new offices with the new team, which includes lawyers spread across 17 cities.

State Farm General Insurance Company®, State Farm’s provider of homeowners insurance in California, just announced it will cease accepting new applications including all business and personal lines property and casualty insurance, effective May 27, 2023. This decision does not impact personal auto insurance. State Farm General Insurance Company made this decision “due to historic increases in construction costs outpacing inflation, rapidly growing catastrophe exposure, and a challenging reinsurance market.”

Before State Farm’s announcement, the company requested a 28% rate hike on homeowners’ insurance. Instead, the state forced the company to cut rates.

While recent headlines have followed State Farm pulling out of the new homeowners insurance market in the state, Allstate says they paused it last year. “We paused new homeowners, condo and commercial insurance policies in California last year so we can continue to protect current customers,” Brittany Nash, spokesperson for the company, told ABC10 in an email. Allstate had previously filed for a 39.6% increase. In a statement to ABC10 a spokesperson for the California Department of Insurance (CDI) said current customers will not lose their insurance.

State Farm was California’s largest property insurer and Allstate was fourth as of 2021.

The late May decision by State Farm follows a similar call by insurance giant GEICO, which closed all sales centers in the state last year.  The Sacramento Bee reported last August that 38 offices are closing and hundreds of GEICO workers are being laid off across the state as a result.

And according to a report by CBS News, from 2020 to 2021, auto insurance losses spiked 25% while premiums increased by only 4.5%, according to the American Property Casualty Insurance Association. The rate and severity of auto accidents are up as well as the costs to cover them.

Progressive stopped advertising in the state. Progressive President and Chief Executive Officer Tricia Griffith said in an earnings call last year that the company was slowing its growth in California.  Insurers “are becoming increasingly less willing to write new business” in California because of the moratorium, Joseph Lacher Jr., Kemper’s president, chief executive officer and chairman said during an earnings call last month.

According to an article in the Los Angeles Times, a series of catastrophic wildfires in recent years has increased calls from insurers to weaken the state’s consumer-friendly policies that have held down rates for decades. The insurance crunch is affecting buyers across the state already, even in areas where the wildfire risk is low. In San Francisco, real estate agents say they have seen deals fall through because would-be buyers couldn’t get insured.

And last March, before the State Farm announcement, the Wall Street Journal reported that “Insurance Companies Are Quietly Fleeing California.” It went on to say that the “recent spate of flood-level storms in Northern California brought attention to the Golden State’s ailing levees. As an “atmospheric river” pummeled the low-lying Sacramento region, a nearly endless parade of trucks carrying rubble raced to shore up an aged system.

“The recent floods and wildfire season have also have saddled insurance companies with as much as $1.5 billion in losses. Insurance markets could weather these blows, but California’s government-controlled insurance system won’t let them. Thus, insurers are pulling out of the state or reducing their underwriting, leaving many homeowners dependent on the bare-bones insurer of last resort: the state-created (though insurer-funded) Fair Access to Insurance Requirements Plan.”

Car insurers are backing away, too, Jerry Theodorou, an R Street Institute insurance expert observed in the Orange County Register, notes, as losses increased 25% in one year, while premiums rose only 4.5%. That statistic offers insight into the problem.

In 1988 California voters approved a ballot measure backed by tort lawyers that turned the insurance commissioner into a rate-setting czar. “Proposition 103 . . . requires the ‘prior approval’ of California’s Department of Insurance before insurance companies can implement property and casualty insurance rates,” the department’s website explains. “The ballot measure also required each insurer to ‘roll back’ its rates 20 percent. Prior to Proposition 103, automobile, property and casualty insurance rates were set by insurance companies without approval by the Insurance Commissioner.”

“In the last six years, we lost 20 years’ worth of underwriting profit, and that was due to the catastrophic wildfires that we’ve faced,” said Janet Ruiz, a spokesperson with the Insurance Information Institute.

However, according to a report by Consumer Watchdog, State Farm’s announcement that it would immediately stop selling homeowners insurance to new customers in California is unlawful under Proposition 103, and appears intended to force Insurance Commissioner Ricardo Lara to rubber stamp $721 million in new and potentially unjustified premium hikes State Farm wants its policyholders to pay, Consumer Watchdog said this morning.  

Consumer Watchdog warned of damaging consequences for California consumers unless Commissioner Lara orders Illinois-based State Farm – the state’s largest insurance company – to reverse its action and comply with the law, as previous Commissioners have done when insurers break the law.  

However the California Insurance Commissioner does not seem to agree with Consumer Watchdog’s interpretation of Proposition 103. Following State Farms announcement, the Insurance Commissioner published a “Consumer Alert” which announced the State Farm decision, and clearly stated “While the California Department of Insurance cannot legally control a company’s business decision, we can help Californians navigate their options.” The Department of Insurance concluded by saying it “continues to proactively outreach to insurance companies to write more business in California so consumers continue to have available coverage options in the face of continued climate change. These discussions are on-going.”