11th Circuit: Judge Must Explain Denial Of Fees In OpenAI Defamation Case

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(April 2, 2024, 10:39 AM EDT) -- ATLANTA — Absent some explanation of why a district court judge didn’t award fees and costs after OpenAI LLC admitted that it could not defend removal of a defamation case against it, there is no way to review the ruling, an 11th Circuit U.S. Court of Appeals panel said April 1 in vacating the ruling and remanding for an explanation.

(Mark Walters v. OpenAI LLC, No. 23-13843, 11th Cir., 2024 U.S. App. LEXIS 7643)

(Opinion available.  Document #46-240403-050Z.)

Journalist Fred Riehl subscribes to ChatGPT, which is owned by OpenAI LLC.  As part of his employment, he interacted with the artificial intelligence about a court case on which he was reporting, Second Amendment Foundation, et al. v. Robert Ferguson, et al., W.D. Wash., No. 23-647.  Washington Attorney General Robert Ferguson and others are the defendants in Second Amendment, while Second Amendment Foundation (SAF) and Alan Gottlieb are the plaintiffs.

Summary

Riehl asked ChatGPT to summarize the allegations in Second Amendment, to which the program responded that it involved Gottlieb’s claims that while Mark Walters was serving as SAF’s treasurer or chief financial officer, he defrauded and embezzled funds from the foundation.

Walters is the host of the nationally syndicated Armed American Radio.  He says he is not a party to Second Amendment, that he never held either position at SAF and that there are no allegations that he misappropriated funds from SAF.  In fact, Second Amendment does not involve allegations of financial misconduct at all, Walters says.

When asked to provide a portion of the complaint, ChatGPT produced a paragraph describing the fabricated claims, Walters says.  When questioned further, ChatGPT provided the entire text of the complaint, though it was completely fabricated and included the wrong case number, Walters says.

Walters claims that by sending Riehl the materials through ChatGPT, OpenAI published false and malicious information about him that harmed his reputation and caused him public ridicule.

Warnings

In a June 5 complaint filed against OpenAI in the Gwinnett County, Ga., Superior Court, Walters seeks compensatory and punitive damages.  The case was removed by OpenAI on July 14 to the U.S. District Court for the Northern District of Georgia on the basis of diversity jurisdiction.  The court issued an order to show cause asking OpenAI to defend its removal.  OpenAI conceded in an Oct. 6 filing that it could not identify each member of its limited liability corporation and that it would withdraw its removal.

In remanding the case on Oct. 25, Judge Michael L. Brown declined to award attorney fees or costs.  Walters appealed the decision not to award costs and fees to the 11th Circuit.

The opening brief was filed Dec. 8, while OpenAI’s appellee brief was filed Feb. 7.

Walters argued that the District Court provided no explanation or analysis for why it denied an award, leaving the appellate court with no means of reviewing the decision. Absent a way to review the decision, the court has no choice but to vacate the denial of costs and fees and remand for issuance of a new order and explanation of the reasoning, Walters said.  In response, OpenAI said Walters seeks $11,120 in fees and costs but believes — “incredibly” — that the appellate court cannot review the denial of that request. Walters’ position is “antithetical” to 11th Circuit case law, and he finds no support for such a novel theory, OpenAI said.

The 11th Circuit panel said remand for an explanation of the ruling on fees and costs is appropriate.  Fees and costs are awarded under U.S. Code Section 1447(c), 28 U.S.C. § 1447(c), based on the reasonableness of the removal.  Absent an explanation for why costs and fees were denied, it is impossible to determine the correctness of the decision, the panel said.

Circuit Judges Charles R. Wilson, Adalberto Jordan and Robert J. Luck participated in the per curiam opinion.

Counsel

Walters is represented by John R. Monroe of John Monroe Law PC in Dawsonville, Ga.

OpenAI is represented by Brendan Krasinski of DLA Piper LLP (US) in Atlanta; Ilana H. Eisenstein and Marie Bussey-Garza of the firm’s office in Philadelphia; Peter Karanjia of its Washington, D.C., office; Danny Tobey of its Dallas office; and Ashley Allen Carr of its Austin, Texas, office.

(Additional documents available:  Walters’ corrected reply.  Document #46-240403-051B.  OpenAI’s appellee brief.  Document #46-240306-025B.  Walters’ opening brief.  Document #46-240306-026B.  Order remanding case.  Document #46-231101-021R.)