(AKM Enterprises Inc. d/b/a Moblize v. Corva AI, LLC, et al., No. 23-4144, S.D. Texas.)
(Defendants’ response to plaintiff’s motion for leave to file a response to defendants’ motion for sanctions available. Document #46-251105-034B.)
The defendants’ response was filed Oct. 10.
AKM Enterprises Inc. d/b/a Moblize filed a trade secrets suit against Ryan Dawson and Corva AI LLC in the U.S. District Court for the Southern District of Texas.
Delay
The defendants moved for leave to file a motion for sanctions against AKM. The court granted the motion in July 2025, and the defendants filed the sanctions motion on Aug. 1. The motion involves AKM’s alleged failure to timely provide discovery materials after it produced 2.2 million pages of discovery late.
The parties filed a joint letter regarding the discovery dispute on Sept. 19.
On the same day, AKM filed a motion for leave to file a response to the motion for sanctions. AKM says it attempted to file its response prior to the deadline and believed that the response had been filed properly. The electronic filing system never sent a rejection notice or otherwise indicated that the filing was not successful. As a result, AKM believed for nearly a month that the document had been filed, it says.
“Defendants’ characterization in today’s joint letter that Plaintiff ‘failed to respond, waiving all defenses’ demonstrates the prejudicial consequences of the technical filing failure. This mischaracterization underscores the necessity for immediate relief to prevent Defendants from exploiting a [filing system] malfunction to obtain procedurally defective sanctions targeting arbitration conduct outside this Court’s jurisdiction,” AKM says.
The 28-day delay had no practical impact, AKM says, adding that no hearings were rescheduled. AKM also argues that the defendants cannot complain about discovery production when their own production has been minimal. Finally, courts prefer to decide cases on the merits, not mere technicalities, AKM argues.
‘Post-Hoc Story’
In their response to AKM’s motion for leave to file a response, the defendants contend that the plaintiff “fails to take accountability, misrepresents the law and invents a rule that does not exist. This is not excusable neglect but rather further evidence that Plaintiff is litigating in bad faith and utilizing the legal process to harass and abuse.”
AKM offers a “post-hoc story riddled with credibility issues,” the defendants say. Courts extend deadlines for excusable neglect, but the record shows gross carelessness, the defendants say.
And AKM relies on McCarty v. Thaler, 376 F. App'x 442 (5th Cir. 2010), for the concept of “inadvertent delays.” But that phrase never appears in Thaler. AKM also relies on Halicki v. La. Casino Cruises, 151 F.3d 465 (5th Cir. 1998), for the idea that a party could not have discovered an electronic filing error without “clairvoyance.” But again, Halicki does not address the electronic filing system or any filing error at all, the defendants argue.
AKM also completely manufactures a purported rule of adminstrative procedure in Texas federal court, the defendants say. AKM points the court to a rule in Section 13(D), but there are only 12 administrative procedure rules in the Southern District of Texas, the defendants say.
‘Classic’ AI Behavior
“This is classic ‘hallucination’ behavior that one would expect from the usage of generative AI. Indeed, this is not the first time Plaintiff has completely mischaracterized a case citation or manufactured unsupported statements. . . . Plaintiff even leaves a clue regarding its AI usage by injecting what is an obvious AI prompt in the middle of Respondent’s Interrogatory,” the defendants say.
“Plaintiff’s careless use of AI also resulted in a blatant misrepresentation to the Court regarding Defendants’ document production. Plaintiff’s claim that Defendants have only produced 3 pages is objectively false, and Plaintiff’s counsel has represented a different number to this Court previously. . . . Plaintiff’s misrepresentation of such to the Court indicates its flippant attitude toward the truth and the lack of regard for diligently checking ChatGPT’s output, instead relying on a ‘Paste and Pray’ approach, leaving Defendants and the Court to shoulder the cost of correcting the record,” the defendants allege.
The nontraditional writing style and other markers of AI suggest AKM simply copied and pasted directly from ChatGPT, the defendants say. And while AKM points to work it performed on the response, working on a response is not the same as filing a response. The only acceptable evidence of a filing is a notice of electronic filing (NEF). Yet AKM admits it never received an NEF. AKM’s belief that it successfully filed its response despite the absence of an NEF “is not diligence; it is negligence,” the defendants say.
“And Plaintiff’s suggestion that only ‘clairvoyance’ could have revealed the problem is absurd. Every practitioner knows the responsibility lies with counsel—not the Court or [the filing system]—to confirm receipt before the deadline. Ignoring the absence of an NEF for twenty-eight days is not excusable neglect. Plaintiff’s failure to take accountability for its mistake should be dispositive. The ‘reason for delay’ was entirely within Plaintiff’s control,” the defendants say.
Sanction
AKM is correct that cases would ideally be decided on the merits and not technicalities, the defendants say. But deadlines are not technicalities, they are integral to the administration of justice, the defendants tell the court.
“Currently, Plaintiff has faced no repercussions for its abusive and dilatory tactics. Defendants are incurring unnecessary expense as a result of this pattern. When viewed together with Plaintiff’s reliance on mischaracterizations of the record, mischaracterizations of case law, and AI-generated submissions, the record demonstrates not good faith but a consistent strategy: use procedural carelessness and delay as a litigation tactic,” the defendants argue.
The defendants ask the court to award sanctions and issue an order to show why AKM should not be sanctioned for its repeated reliance on AI.
Counsel
The defendants are represented by Bradley L. DeLuca and Omid Abaei of Johnson DeLuca Kurisky & Gould PC.
AKM is represented by Jaclyn I. Barbosa of Jaclyn I. Barbosa Attorney at Law PLLC and Colleen E. McKnight of McKnight Law PLLC.
All are in Houston.
(Additional documents available: Defendants’ motion for sanctions. Document #46-251105-032M. Plaintiffs’ motion for leave to file response to motion for sanctions. Document #46-251105-033M. Joint letter. Document #46-251105-035B.)