OpenAI hit with lawsuit claiming ChatGPT acted as an unlicensed lawyer

By Mike Scarcella

WASHINGTON, March 5 (Reuters) - ChatGPT maker OpenAI has been accused in a new lawsuit of practicing law without a U.S. license and helping a former disability claimant breach a settlement and flood a federal court docket with meritless filings.

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

“ChatGPT is not an attorney,” the lawsuit said. Although OpenAI has shown ChatGPT can pass an attorney bar exam, Nippon said, “it has not been admitted to practice law in the State of Illinois or in any other jurisdiction within the United States.”

The lawsuit seeks an order declaring that OpenAI violated Illinois' unauthorized practice of law statute, as well as $300,000 in compensatory damages and $10 million in punitive damages.

OpenAI and a lawyer for Nippon, a subsidiary of the Japanese insurer Nissay [RIC:RIC:NPNLI.UL], did not immediately respond to requests for comment.

Nippon claimed OpenAI encouraged the woman, an employee of a logistics company that had insurance coverage through Nippon, to press ahead in her already-settled disability case. Nippon said it spent significant time and resources and racked up substantial fees responding to the woman's ChatGPT-powered filings.

The lawsuit appears to be one of the first cases to accuse a major AI developer of engaging in the unauthorized practice of law through a consumer‑facing chatbot.

It comes as the technology's rapid adoption for legal filings has led to mounting AI “hallucinations” in court filings, leading judges to sanction litigants and lawyers for submitting filings with fabricated case citations or other unverified material produced with generative AI tools.

The case stems from filings by the employee after she settled her long‑term disability benefits suit with prejudice in January 2024, according to Nippon. The woman is not a defendant in the lawsuit.

Nippon said the woman last year uploaded an email from her then-lawyer into ChatGPT, which allegedly validated her concerns about the advice she was being given. The woman fired her lawyer and moved to reopen her closed case using ChatGPT, the lawsuit said.

A judge denied that bid in February 2025, but Nippon said the plaintiff then filed a new case and dozens of motions and notices that the company contends served “no legitimate legal or procedural purpose.” Nippon claims ChatGPT drafted those papers.

Nippon said OpenAI amended its policies in October to bar users from using the platform for legal advice, but alleged it previously had no such prohibitions.

The case is Nippon Life Insurance Company of America v. OpenAI Foundation and OpenAI Group PBC, U.S. District Court, Northern District of Illinois, No. 1:26-cv-02448.

For plaintiff: Justin Wax Jacobs of Nippon Life Insurance Company of America, and Christopher Assise of Sidley Austin

For defendant: No appearances yet

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