A lawyer hired by the Chicago Housing Authority revealed this summer that she used ChatGPT and failed to check her work, when defending the housing authority in a lawsuit involving the poisoning of two children by lead paint.
Now, her former law firm and the lawyer who signed off on the legal motion that cited a fake court case are being sanctioned.
Cook County Circuit Judge Thomas Cushing sanctioned Larry Mason and his law firm Goldberg Segalla on Friday, Mason for $10,000 and the firm $49,500, for improper use of artificial intelligence and false misrepresentations to the court.
The CHA and the lawyer who improperly used AI, Danielle Malaty, weren’t penalized for the error.
Malaty was fired from Goldberg Segalla in June and started her own firm, Malaty Law Group. She was handed a $10 sanction in July in a separate case in which two of her court filings contained 12 hallucinated case citations.
Goldberg Segalla’s conduct was “a serious failure,” Cushing wrote in his order.
“The court’s focus here is not the misuse of artificial intelligence to conduct unreliable legal research and drafting. It is the inexcusable submission of false authority and factual arguments to the court, the subsequent misrepresentations about the extent of the improper conduct, and the failure to take prompt responsibility for errors once discovered,” Cushing wrote. “The obligations on officers of the court at issue here precede by centuries the age of electronic research and artificial intelligence.”
Mason didn’t respond to a request for comment. Malaty’s attorney, Daniel Meyer, didn’t respond to a request for comment.
A jury decided in January that the agency was responsible for the lead poisoning of two children. The CHA was ordered to pay more than $24 million, including past and future damages, to the two residents who sued on behalf of their children.
On Friday, the judge granted the plaintiffs an additional $8 million for attorney’s fees, bringing the total owed by the CHA to $32.2 million, court records show. The CHA didn’t respond to a request for comment on how it will pay the plaintiffs.
The judge also threw out the CHA’s post-trial motion, which sought a verdict in its favor, a new trial on liability or a new trial on damages or to lower the verdict, court records show.
The CHA is “reviewing the court’s opinion and evaluating our options going forward,” Matthew Aguilar, a CHA spokesperson, said in an emailed statement.
“The Chicago Housing Authority remains aware of the serious and lasting effects lead exposure can have on a child’s life and we are committed to transparency and action as we work to provide safe, healthy homes for every resident,” he said.
In the past two decades, the CHA’s redevelopment and renovation efforts have included “extensive modernization work aimed at addressing historical lead hazards,” Aguilar said.
The housing authority created a new division in April focused on environmental concerns and hazards for residents. The division’s staff is starting by focusing on lead-based paint hazards as they build out the program.
As of November, the CHA said it had abated lead hazards inside 66 units and performed additional lead abatement work in common spaces of buildings to benefit a total of 116 units.
‘Regrettable situation’
At an October hearing regarding the sanctions, an attorney representing Goldberg Segella called the briefing issue “a regrettable situation” and apologized on behalf of his clients to the court and others involved. He argued, along with the Malaty’s attorney, that sanctions shouldn’t be issued. Malaty was not present at the October hearing.
Goldberg Segalla first apologized for the error in a June 18 court filing, calling it a “serious lapse in professionalism.”
“An exhaustive investigation revealed that one attorney, in direct violation of Goldberg Segalla’s AI use policy, used AI technology and failed to verify the AI citation before including the case and surrounding sentence describing its fictitious holding,” Mason said in the filing.
Mason, lead counsel in the lead paint case, said “several contributors” supported him while preparing the motion. He also said the investigation found “no intent to deceive the Court” and no other attorneys at the firm were aware of the improper citation.
Goldberg Segalla has since implemented “firm-wide measures to re-educate its attorneys” on its AI use policy, the June filing said, and “established preventative measures.”
The CHA’s Chief Legal Officer Elizabeth Silas sent Mason a letter in July thanking him for bringing the AI issue to the agency’s attention and for apologizing for the error, the Chicago Tribune reported in July.
“As you know, CHA expects its outside counsel to hold themselves to the highest responsible and ethical standards,” Silas wrote. “We sincerely hope that the Court recognizes this unfortunate error and recognizes Goldberg Segalla’s good faith actions to investigate, accept responsibility, and take proper corrective action. Please note, however, that depending on the Court’s finding and rulings, CHA may consider and reserves the right to take additional appropriate action to protect its interests.”
The CHA, the third-largest public housing authority in the country, serves more than 65,000 households and is the largest single owner of rental housing in the city with more than 21,000 housing units.
At a July special hearing, called by the court to hear more about the AI error, Malaty told the judge she didn’t think ChatGPT could create fictitious legal citations and didn’t check to ensure the motion was accurate. Three other Goldberg Segalla attorneys then reviewed the draft motion — including Mason, who served as the final reviewer — as well as the CHA’s in-house counsel, before it was filed with the court.
“I find all of this very unfortunate,” Malaty said in the hearing. “At no point did I have any intent to deceive the court.”
Mason told the judge in July that because of his repeated losses when arguing before the court during the January trial, he was “very hands off” with the post-trial motion because the case “needed a fresh perspective away from me.” He said he wasn’t expected to check the 58 cases cited in the motion and is “personally disgusted” and “embarrassed” by what happened, calling the mistake “horrific.”
Matthew Sims, an attorney for the plaintiffs, said in a written statement Monday: “We are not surprised that the Court affirmed the jury’s verdicts in this case. In the end, justice has been served. We are, however, disappointed that the CHA and its legal team went to such great lengths to try and take away that jury’s justice.”
Goldberg Segalla has billed the CHA more than $1.1 million for legal services between March 2024 and July 2025, according to records obtained through a public records request. The housing authority previously said it will not be billed for any time or expenses related to the AI issue.
In January 2022, Shanna Jordan, mother of Jah’mir Collins, now 11, and Morgan Collins, mother of Amiah Collins, now 7, sued the CHA, The Habitat Co., East Lake Management Group and Environmental Design International, saying the defendants knew their unit had lead-based paint and their children suffered “severe lead poisoning” while living at 7715 N. Marshfield Ave. The Rogers Park property is owned by the CHA.
The lawsuit said the agency knew the property had lead-based paint since 1992 and faced city code violations in the early 2000s because of the hazard.
Environmental Design had conducted an inspection for lead-based paint in 2017, on behalf of the housing authority, and found lead-based paint, the suit said. Environmental Design settled with the plaintiffs prior to the trial.
Habitat and East Lake Management, who had managed the CHA-owned property, were found not liable for the children’s injuries. The companies settled with the plaintiffs in 2025 for much smaller amounts, $200,000 and $400,000, respectively.
Habitat then sued the CHA and two of its attorneys in February for an alleged breach of contract and legal malpractice over the agency’s handling of the lead poisoning lawsuit. A few months prior to the January ruling, Habitat had terminated all of its management agreements with the housing authority, covering 16 buildings and approximately 3,400 units of public housing.
This wasn’t the first time the CHA approved housing for residents who were later diagnosed with lead poisoning. Dozens of children were found to have been poisoned by brain-damaging lead while living in homes and apartments declared safe by the housing authority, a 2017 Chicago Tribune investigation found.