OpenAI is currently defending ChatGPT in lawsuits across at least four distinct areas: a novel unauthorized-practice-of-law suit brought by an insurer, a consolidated multidistrict copyright action involving the New York Times and the Authors Guild, a proposed privacy class action over web tracking, and defamation claims over hallucinated outputs. None of the headline cases has reached a final judgment, and the legal theories courts accept over the next year will shape how every large language model company is regulated.
Nippon Life’s Unauthorized Practice of Law Suit
The most watched new case is Nippon Life Insurance Company of America v. OpenAI Foundation and OpenAI Group PBC, No. 1:26-cv-02448, filed March 4, 2026, in the U.S. District Court for the Northern District of Illinois.1CourtListener. Nippon Life Insurance Company of America v. OpenAI Foundation The insurer seeks $300,000 in compensatory damages and $10 million in punitive damages, along with a permanent injunction, on three theories: tortious interference with contract, abuse of process, and unauthorized practice of law.2Commercial Litigation Update. The Case Was Settled but ChatGPT Thought Otherwise
The underlying dispute involves Graciela Dela Torre, who settled a long-term disability claim against Nippon Life in January 2024 and signed a release waiving future claims. Dissatisfied afterward, she uploaded her correspondence with counsel into ChatGPT, which told her the attorneys had “invalidated” her feelings and “deflected responsibility.” She fired her lawyers and, according to Nippon Life, began using ChatGPT as a de facto legal advisor. The insurer attributes at least 44 filings to that assistance, including 21 motions, one subpoena, and eight notices and statements. At least one filing cited a fabricated case, “Carr v. Gateway, Inc.”3American Bar Association. When Is a Settlement Not a Settlement: AI A federal judge denied her motion to reopen the settled case on February 13, 2025.2Commercial Litigation Update. The Case Was Settled but ChatGPT Thought Otherwise
The unauthorized practice of law claim is the novel one. Nippon Life argues ChatGPT went beyond general information and delivered tailored legal conclusions about Dela Torre’s specific situation without a license. The complaint also cites OpenAI’s own promotion of ChatGPT’s 297 score on the Uniform Bar Examination as a “capability assertion” inviting users to rely on it as a legal advisor, and points to OpenAI’s October 2024 terms-of-service update prohibiting legal-advice use as evidence the company recognized the risk without building meaningful safeguards.4Stanford Law School. Designed to Cross: Why Nippon Life v. OpenAI Is a Product Liability Case
OpenAI moved to dismiss on May 15, 2026, arguing that ChatGPT is “not a ‘person,’ but a tool that relies on statistics to predict the most appropriate sequence of words based on its training” and is “incapable of practicing law within the meaning of the statute.” On tortious interference, the company argued the “requisite intent to induce requires active persuasion, encouragement, or incitement that goes far beyond passively and automatically generating information in response to prompts,” and that its terms of use tell users not to rely on outputs “as a substitute for professional advice.” OpenAI said Nippon Life’s frustrations should be directed at Dela Torre, who actually wrote and filed the documents, and characterized ChatGPT as “a helpful tool and research aid that advances access to justice in courts.”5Bloomberg Law. OpenAI Dismissal Motion Says ChatGPT Is Mere Tool Not Attorney
Judge John F. Kness set a briefing schedule on June 10, 2026: Nippon Life’s response is due July 1, OpenAI’s reply by July 15, and an in-person status hearing is scheduled for August 5, 2026.1CourtListener. Nippon Life Insurance Company of America v. OpenAI Foundation No court has yet ruled on whether a chatbot can commit the unauthorized practice of law.
Some commentators have reframed the case as a product liability matter. Stanford Law School published an analysis by Eran Kahana arguing OpenAI committed “architectural negligence” by marketing a chatbot capable of passing the bar to consumers in active disputes without structural safeguards, and that the October 2024 terms-of-service disclaimer is a “behavioral patch” rather than a design fix. Kahana wrote that “a manufacturer cannot disclaim its way out of a design defect that makes the product unreasonably dangerous for its foreseeable use.”4Stanford Law School. Designed to Cross: Why Nippon Life v. OpenAI Is a Product Liability Case
The Copyright Multidistrict Litigation
The largest body of ChatGPT litigation is copyright. In April 2025, the U.S. Judicial Panel on Multidistrict Litigation consolidated twelve suits against OpenAI and Microsoft into In re: OpenAI, Inc. Copyright Infringement Litigation, No. 25-MD-3143, in the Southern District of New York before Judge Sidney H. Stein.6Norton Rose Fulbright. AI in Litigation Series: An Update on AI Copyright Cases The consolidated plaintiffs include the Authors Guild, the New York Times, the Daily News, the Center for Investigative Reporting, and Ziff Davis.7Baker & Hostetler LLP. In Re OpenAI, Inc. Copyright Infringement Litigation
Plaintiffs allege OpenAI and Microsoft used copyrighted works without permission to train large language models, and that ChatGPT outputs sometimes reproduce or closely mimic protected material. Claims span direct, vicarious, and contributory copyright infringement, as well as Digital Millennium Copyright Act violations.8ChatGPT Is Eating the World. Updated Master Chart of Copyright, DMCA and Other Claims in Suits v. AI
On October 27, 2025, the court denied OpenAI’s motion to dismiss, holding that allegations of outputs “substantially similar” to copyrighted works were sufficient to proceed. In early 2026, the court ordered OpenAI to produce 20 million output logs, then later compelled production of an additional 88 million.6Norton Rose Fulbright. AI in Litigation Series: An Update on AI Copyright Cases Discovery is ongoing, and summary judgment replies are not due until October 2026.9ChatGPT Is Eating the World. Status of All 51 Copyright Lawsuits v. AI The New York Times case is unlikely to conclude in 2026, though industry observers see a “decent chance” of settlement, partly because Anthropic settled a similar author class action for $1.5 billion in September 2025.10AI Business. AI Lawsuits in 2026: Settlements, Licensing Deals, Litigation
A separate copyright class action was filed in British Columbia on September 11, 2024, on behalf of Canadian residents whose copyrighted works were allegedly used in OpenAI’s training data without consent.11Siskinds LLP. OpenAI Class Action As of mid-2026, no court has issued a definitive ruling on whether AI training constitutes fair use in the OpenAI MDL.
Privacy Class Action Over Tracking Pixels
On May 5, 2026, Saje Lim filed a proposed class action, Lim v. OpenAI Global LLC, No. 3:26-cv-04063, in the U.S. District Court for the Northern District of California. The complaint alleges OpenAI embedded Facebook Pixel and Google Analytics tracking codes on the ChatGPT website, which transmitted user query topics, hashed email addresses, and device identifiers to Meta and Google in real time without user consent.12Bloomberg Law. OpenAI Sued Over Sharing of Chatbot Queries With Meta, Google
The suit asserts violations of the Electronic Communications Privacy Act, California’s Invasion of Privacy Act, and state constitutional privacy rights. Under CIPA, the plaintiff seeks statutory damages of $5,000 per violation. The theory rests on the argument that ChatGPT’s nature as an AI assistant creates a reasonable expectation of confidentiality that ad-tech tracking infrastructure violated. As of mid-2026, it is unknown whether OpenAI has removed the scripts or whether its privacy policy disclosures could affect class certification.13AI Weekly. OpenAI Sued for Sending ChatGPT Queries to Meta, Google
Defamation and Hallucinated Outputs
One early defamation suit has already ended in OpenAI’s favor. In Walters v. OpenAI, radio host Mark Walters sued after ChatGPT falsely told a journalist he had embezzled funds from the Second Amendment Foundation. The journalist had asked ChatGPT to summarize a legal complaint, and the chatbot fabricated the embezzlement allegation entirely.14Cleary Gottlieb. Georgia Court Dismisses Defamation Lawsuit Against OpenAI Over ChatGPT Output
In May 2025, a Georgia state court granted summary judgment to OpenAI on three grounds. No reasonable reader would have believed the output was factual, since ChatGPT itself had warned it lacked internet access and that the subject fell outside its knowledge cutoff. Walters, as a public figure, failed to prove actual malice or even ordinary negligence because he could not identify what standard of care OpenAI should have followed. And no damages occurred because the false output was seen only by the journalist who prompted it and was never published or believed.14Cleary Gottlieb. Georgia Court Dismisses Defamation Lawsuit Against OpenAI Over ChatGPT Output
Other AI defamation suits remain active. Indian news agency ANI sued OpenAI in a Delhi court in November 2024 over fabricated content attributed to the agency, and that case is still pending with amici appointed to address jurisdictional questions.15Quinn Emanuel Urquhart & Sullivan LLP. Client Alert: Defamation in the AI Era
Courts Divided on What ChatGPT Is
Two federal rulings issued on the same day, February 10, 2026, show how unsettled the law remains, and they matter because many of the ChatGPT cases turn on whether the chatbot is treated as a tool or as something closer to a third-party consultant.
In United States v. Heppner (S.D.N.Y.), Judge Jed S. Rakoff ruled that 31 documents a securities fraud defendant generated using Anthropic’s Claude chatbot were not protected by attorney-client privilege or the work product doctrine. Heppner had used Claude on his own, without direction from his lawyers. Judge Rakoff found that Claude is not an attorney, that Heppner had no reasonable expectation of confidentiality because Anthropic’s privacy policy permits data collection and sharing with third parties including government authorities, and that forwarding the documents to counsel after the fact did not retroactively create privilege.16Paul, Weiss, Rifkind, Wharton & Garrison LLP. SDNY Court Considers Whether AI-Generated Documents Are Subject to Privilege Protections
The same day, Magistrate Judge Anthony P. Patti reached the opposite conclusion in Warner v. Gilbarco, Inc. (E.D. Mich.). A pro se employment plaintiff had used ChatGPT to prepare litigation materials, and defendants sought to compel production. Judge Patti denied the motion, holding the materials were prepared in anticipation of litigation and protected as work product. He rejected the argument that sharing information with an AI constitutes waiver, writing that “ChatGPT (and other generative AI programs) are tools, not persons” and that waiver requires disclosure to an adversary. Compelling production, the court said, would “nullify work-product protection in nearly every modern drafting environment.”17Proskauer Rose LLP. Michigan Federal Court Protects AI-Assisted Litigation Work Product
The split cuts to the center of the Nippon Life case. If a chatbot is merely a tool, OpenAI’s argument that ChatGPT cannot practice law any more than a word processor can gains force. If the interaction looks like a consultation with a third party, the case for treating outputs as something closer to legal advice strengthens.
Where This Is All Heading
As of mid-2026, at least 97 copyright-related lawsuits have been filed against AI companies in the United States, with OpenAI named in a substantial share.8ChatGPT Is Eating the World. Updated Master Chart of Copyright, DMCA and Other Claims in Suits v. AI None of the major cases has produced a final resolution.
The pattern worth watching is where plaintiffs are aiming. Earlier AI disputes focused on user responsibility, as in Mata v. Avianca, where lawyers were sanctioned for submitting ChatGPT-generated citations to fabricated cases. The Nippon Life suit, the Lim privacy class action, and the copyright MDL all push liability upstream toward the developer. Whether courts accept that framing will shape OpenAI’s exposure and the regulatory expectations for every company building large language models.