Nippon Life’s AI Lawsuit Against OpenAI Over ChatGPT

The Nippon Life lawsuit against OpenAI is a federal case filed March 4, 2026, in the Northern District of Illinois, in which Nippon Life Insurance Company of America accuses OpenAI of enabling the unauthorized practice of law through ChatGPT. The insurer seeks $300,000 in compensatory damages and $10 million in punitive damages, plus a permanent injunction, after a former claimant used the chatbot to generate dozens of meritless court filings aimed at reopening a disability case that had already been settled with prejudice.¹ The case is Nippon Life Insurance Company of America v. OpenAI Foundation and OpenAI Group PBC, No. 1:26-cv-02448, and is believed to be one of the first to name an AI developer as a defendant for legal advice produced by a consumer-facing product.

What Nippon Life Is Claiming

The complaint brings three causes of action against OpenAI Foundation and OpenAI Group PBC.

Unauthorized practice of law. Nippon Life alleges ChatGPT applied legal principles to a user’s specific facts, interpreted a settlement agreement, recommended litigation strategy, and drafted custom pleadings, all of which the insurer says constitute the practice of law under Illinois statute (705 ILCS 205/1 § 1) without a license.
Tortious interference with a contract. The insurer claims ChatGPT’s guidance induced the former claimant to breach her settlement by pursuing litigation the agreement barred.
Abuse of process. Nippon Life alleges OpenAI aided the claimant’s abuse of the judicial system by providing advice and drafting filings that courts found procedurally and substantively improper.

The $300,000 compensatory figure represents the legal fees Nippon Life says it spent defending against the AI-generated filings. The $10 million punitive request is tied to the insurer’s theory that OpenAI knew consumers were treating ChatGPT as a legal advisor and chose disclaimers over a structural fix.¹

A key piece of the complaint is OpenAI’s marketing around ChatGPT’s ability to pass the Uniform Bar Examination, which Nippon Life says invited consumers to rely on the tool for legal work. The complaint also points to OpenAI’s October 2025 usage-policy update, which added a prohibition on using ChatGPT for “tailored advice that requires a license, such as legal or medical advice, without appropriate involvement by a licensed professional.”² Nippon Life frames that update not as a defense but as an admission that OpenAI recognized the risk.³

How ChatGPT Ended Up Drafting Court Filings

The underlying dispute involved Graciela Dela Torre, a former Nippon Life employee who filed a long-term disability claim for carpal tunnel syndrome and epicondylitis in July 2019. Nippon Life approved benefits the following month but terminated them in November 2021. Dela Torre sued in December 2022, settled, and the case was dismissed with prejudice in January 2024.¹

When Dela Torre asked her attorney about reopening the case, he told her the signed release prevented it. She then uploaded her attorney’s correspondence into ChatGPT and asked whether she was being “gaslighted.” ChatGPT told her she was.⁴ She fired her lawyers and began using the chatbot as what Nippon Life’s complaint calls her de facto legal advisor, prompting it to generate arguments that included the claim that her former counsel had pressured her into signing a blank signature page.⁵

Acting pro se, Dela Torre filed at least 44 documents across two proceedings: 21 motions, a subpoena, eight notices and statements, and various other filings. At least one cited a fabricated case, Carr v. Gateway, Inc., which Nippon Life says “only exists in Dela Torre’s papers and the ‘mind of ChatGPT.'”⁵ On February 13, 2025, a federal judge in Chicago denied her motion to reopen the settled case, writing that “second thoughts are not a valid reason to reopen this lawsuit.” She then filed a new suit, Dela Torre v. Davies Life & Health et al., later amending it to add Nippon Life as a defendant.

OpenAI’s Motion to Dismiss

OpenAI’s counsel at Wilson Sonsini Goodrich & Rosati and Mandell PC filed a motion to dismiss for failure to state a claim on May 15, 2026.⁶ The defense makes three main arguments.

First, ChatGPT is a tool, not a person. OpenAI describes it as “a tool that relies on statistics to predict the most appropriate sequence of words” and argues it cannot practice law under an Illinois statute written to regulate human conduct.⁷

Second, tortious interference requires “active persuasion, encouragement, or incitement,” which OpenAI says goes beyond passive, automatic text generation. The company calls the allegation “incorrect as a matter of law and fundamentally incompatible with the nature of the technology.”⁷

Third, the user, not the tool, wrote and signed the filings. OpenAI argues that making a general-purpose product available to the public is not aiding and abetting, and that any grievances belong with Dela Torre.⁷

Legal commentators have noted OpenAI could potentially invoke Section 230 of the Communications Decency Act, though it is not clear from public filings whether that argument was raised in the motion itself.⁸

Where the Case Stands

The case was assigned to Judge John F. Kness, with Magistrate Judge Gabriel A. Fuentes. On the same day it filed its motion to dismiss, OpenAI moved to reassign the case away from Judge Kness. That reassignment motion is pending before Judge Pallmeyer, and Judge Kness has held the motion to dismiss in abeyance until the reassignment question is resolved.⁶

Under the current schedule, Nippon Life’s response to the motion to dismiss is due by July 1, 2026, and OpenAI’s reply by July 15, 2026. An in-person status hearing is set for August 5, 2026. A non-lawyer, Dr. Michael Spece, has sought leave to file an amicus brief supporting OpenAI’s motion; on June 10 the court ordered him to explain whether he is a licensed attorney and to cite precedent for a non-party, non-lawyer filing such a brief. He submitted a supplemental statement on June 15, and the court had not ruled on the request as of June 16, 2026.⁶

Why the Case Matters

The suit sits at two open legal questions: whether AI developers can be held liable for harmful legal outputs, and whether unauthorized-practice-of-law statutes written for humans apply to software at all.

The closest precedent, Mata v. Avianca, sanctioned human lawyers under Rule 11 for filing ChatGPT-generated briefs with fabricated citations, placing responsibility on the user who signed the filing. Nippon Life is trying to push liability upstream to the developer.¹ Courts have continued to focus on the user side: in January 2026, the Seventh Circuit declined to sanction a pro se plaintiff for AI-hallucinated case law in Jones v. Kankakee County Sheriff’s Department but warned about accuracy, and a pro se litigant in the Western District of Michigan was fined $2,900 in late 2025 for similar hallucinations.⁴

On the regulatory side, New York’s Senate Bill S7263A would prohibit chatbot operators from knowingly permitting their AI to impersonate a licensed professional, including an attorney, in a manner that would be a crime if performed by a human. It would carry civil penalties of up to $15,000 per day per violation and would bar operators from disclaiming liability simply by disclosing that the user is talking to a non-human system. As of June 2026, the bill remains in the Senate Rules Committee.⁹ Neither Congress nor the American Bar Association has established a safe harbor or certification regime for AI legal applications, leaving the Northern District of Illinois’s handling of this case as one of the first opportunities for a court to draw a line between a general-purpose tool and something that crosses into the practice of law.

1
American Bar Association. When Is a Settlement Not a Settlement AI
2
Bloomberg Law. ChatGPT Terms Act as Liability Shield for Doling Out Legal Advice
3
Stanford Law School. Designed to Cross: Why Nippon Life v. OpenAI Is a Product Liability Case
4
Georgetown Law Legal Ethics Journal. GPT Esquire: How the Nippon Case May Shape the Future of AI in Pro Se Litigation
5
Commercial Litigation Update. The Case Was Settled, but ChatGPT Thought Otherwise
6
CourtListener. Nippon Life Insurance Company of America v. OpenAI Foundation
7
Bloomberg Law. OpenAI Dismissal Motion Says ChatGPT Is Mere Tool, Not Attorney
8
The Indiana Lawyer. Can ChatGPT Practice Law? OpenAI Faces First-of-Its-Kind Lawsuit in Illinois
9
New York State Senate. Senate Bill S7263A