Although citing fake cases violates Federal Rule of Appellate Procedure 38, Rule 38 alone is not “up to the task” of sanctioning this conduct, Chambers, 501 U.S. at 50, because Rule 38 allows only for the imposition of costs and attorneys’ fees, Sanctions § 33. But we think other sanctions are also appropriate, so we employ our inherent authority

Not a lawyer, just a bit of a law nerd, by this is a big deal, especially the fact that courts have been repeatedly using their inherent authority sanction on people who fuck this up. Courts do not routinely invoke their inherent authority like this. Also this footnote is interesting:

Ghostwriting is when one person writes the document while another person takes credit for it without acknowledging the true author’s identity. See The American Heritage Dictionary of the English Language 741 (4th ed. 2000). Legal authorities generally discuss ghostwriting for a pro se litigant, see, e.g., Duran v. Carris, 238 F.3d 1268, 1272 (10th Cir. 2001), but we see no reason why rules regulating ghostwriting should apply in only the pro se context. The primary concern with ghostwriting is that the true author would escape liability for his conduct, see In re Mungo, 305 B.R. 762, 768 (Bankr. D.S.C. 2003); Ellis v. Maine, 448 F.2d 1325, 1328 (1st Cir. 1971), and that concern is just as acute when a lawyer ultimately signs the ghostwritten pleading.

It sounds like they're looking for an angle to hold the LLM operators (OpenAI/Anthropic - or at least whatever company wraps the models in the necessary bits and bobs to make it a product they can sell to stupid asshole lawyers) as ultimately accountable for these filings, just as if they were a SovCit guru providing materials for one of their griftees to submit to the court without ever actually putting their name to the record where the might face consequences. I'd need to do some research to speculate on what that might mean, but it should give everyone operating in this space pause.

I'm still reading the appendix that goes into the specific hallucinations but it sounds like they're pretty absurd based on the tone of this order.