OpenAI Accused in Chicago Lawsuit of Acting as Unlicensed Legal Advisor

According to Reuters, the insurer claims OpenAI enabled a woman to pursue legal action after her long-term disability lawsuit had already been resolved and dismissed. Nippon Life argues that the chatbot’s involvement encouraged the claimant to challenge the outcome of the case and submit additional filings that the company says lacked merit.

“ChatGPT is not an attorney,” the lawsuit states. Nippon Life asserts that even though OpenAI has demonstrated that ChatGPT can pass an attorney bar exam, the system “has not been admitted to practice law in the State of Illinois or in any other jurisdiction within the United States.”

The lawsuit seeks a court declaration that OpenAI violated Illinois laws governing the unauthorized practice of law. Nippon Life is also requesting $300,000 in compensatory damages and $10 million in punitive damages, per Reuters.

Representatives for OpenAI and an attorney for Nippon Life, a subsidiary of Japanese insurer Nissay, did not immediately respond to requests for comment, according to Reuters.

Related: NY Bill Would Bar AI Chatbots From Providing ‘Substantive’ Medical or Legal Responses

In its filing, Nippon Life alleges that OpenAI’s chatbot encouraged the claimant—an employee of a logistics company insured by Nippon—to continue pursuing claims related to disability benefits after the original case had already been settled. The insurer says it had to devote significant time and financial resources responding to court documents that it claims were generated with the help of ChatGPT.

The case may be among the first to directly accuse a major artificial intelligence developer of engaging in unauthorized legal practice through a publicly available chatbot, according to Reuters.

We’d love to be your preferred source for news.

Please add us to your preferred sources list so our news, data and interviews show up in your feed. Thanks!

Add as Preferred Source

The lawsuit also comes amid increasing scrutiny of generative AI tools in the legal field. Courts have recently encountered instances in which filings produced with AI contained fabricated legal citations or other inaccurate material, leading judges to sanction attorneys and litigants who relied on such tools without proper verification, per Reuters.

Nippon Life’s complaint stems from events that occurred after the employee settled her lawsuit over long-term disability benefits with prejudice in January 2024. The woman herself is not named as a defendant in the case.

According to Reuters, the insurer alleges that the claimant uploaded an email from her lawyer into ChatGPT in 2024. The chatbot allegedly supported her concerns about the legal advice she had received. Afterward, the woman dismissed her attorney and attempted to reopen the settled case using documents generated with the help of ChatGPT.

A judge rejected her attempt to revive the case in February 2025. However, Nippon Life claims that the woman subsequently initiated a new lawsuit and filed dozens of motions and notices that the insurer contends served “no legitimate legal or procedural purpose.” The company alleges that those documents were drafted using ChatGPT, according to Reuters.

Nippon Life also noted in the lawsuit that OpenAI revised its policies in October to prohibit users from relying on the platform for legal advice. The insurer claims the platform previously lacked such restrictions, per Reuters.

The case is titled Nippon Life Insurance Company of America v. OpenAI Foundation and OpenAI Group PBC and is being heard in the U.S. District Court for the Northern District of Illinois under case number 1:26-cv-02448.

Attorneys representing the plaintiff include Justin Wax Jacobs of Nippon Life Insurance Company of America and Christopher Assise of Sidley Austin, according to Reuters.

Source: Reuters