OpenAI faces US lawsuit alleging ChatGPT practised law without licence and fuelled wave of meritless court filings

ChatGPT maker OpenAI has been accused in a new lawsuit of practising law without a US licence and assisting a former disability claimant in breaching a settlement while flooding a federal court with meritless filings.

 

Nippon Life Insurance Company of America alleged in a lawsuit filed on Wednesday in federal court in Chicago that OpenAI improperly provided legal assistance to a woman who attempted to reopen a lawsuit that had already been settled and dismissed.

 

“ChatGPT is not an attorney,” the lawsuit states. Although OpenAI has demonstrated that ChatGPT can pass a bar examination, Nippon said it “has not been admitted to practise law in the State of Illinois or in any other jurisdiction within the United States”.

 

The lawsuit seeks a court order declaring that OpenAI violated Illinois’ unauthorised practice of law statute, as well as $300,000 in compensatory damages and $10 million in punitive damages.

 

OpenAI said in a statement on Thursday that “this complaint lacks any merit whatsoever”.

 

A lawyer for Nippon, a subsidiary of the Japanese insurer Nissay, said the company declined to comment.

 

Nippon claims OpenAI encouraged the woman — an employee of a logistics company whose insurance coverage was provided through Nippon — to pursue further action in her already settled disability case. The insurer said it spent significant time and resources responding to filings that were allegedly generated with the assistance of ChatGPT.

 

The lawsuit appears to be among the first cases accusing a major artificial intelligence developer of engaging in the unauthorised practice of law through a consumer-facing chatbot.

 

The case comes as the rapid adoption of generative AI tools for legal drafting has led to a rise in so-called AI “hallucinations” in court filings. Judges have increasingly sanctioned litigants and lawyers for submitting documents containing fabricated case citations or other unverified material generated by AI systems.

 

According to Nippon, the dispute arose after the employee settled her long-term disability benefits lawsuit with prejudice in January 2024. The woman herself is not named as a defendant in the current lawsuit.

 

Nippon alleged that the woman later uploaded an email from her then lawyer into ChatGPT, which purportedly validated her concerns about the legal advice she had received. She subsequently dismissed her lawyer and attempted to reopen the closed case using filings prepared with the help of the chatbot, the lawsuit said.

 

A judge rejected that request in February 2025. However, Nippon said the woman subsequently filed a new lawsuit along with dozens of motions and notices which, the insurer contends, served “no legitimate legal or procedural purpose”. The company alleges that ChatGPT drafted those documents.

 

Nippon also said OpenAI amended its policies in October to prohibit users from seeking legal advice through the platform, but claimed no such restriction existed previously.

 

The case is Nippon Life Insurance Company of America v. OpenAI Foundation and OpenAI Group PBC, filed in the US District Court for the Northern District of Illinois (No. 1:26-cv-02448).

 

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