Tovar: Fabricated Quotations Brought Sanctions Against Counsel

On September 24, 2026, a Workers’ Compensation Appeals Board panel sanctioned defense attorneys $1,000 for filing fabricated legal quotations and misrepresenting case holdings in a petition for removal. In Stephanie Tovar v. United Pacific (ADJ17817958, ADJ17817957), the panel clarified that while California workers' compensation rules do not categorically ban artificial intelligence tools, attorneys remain strictly responsible for checking filings and verifying legal citations. Crucially, as a nonprecedential panel decision, this ruling binds only the specific parties to the case, serving as persuasive guidance on professional supervision under Labor Code section 5813 and Appeals Board rules.

What the WCAB Decided in Tovar

The dispute arose after defense counsel filed a petition for removal challenging a trial judge's order. On October 13, 2025, the board issued a Notice of Intent to Impose Sanctions of up to $2,500 jointly against the employer, insurer, third-party administrator, defense law firm, and individual defense attorney after identifying fabricated quotations in the petition.

In its final September 24, 2026 decision after removal, the panel narrowed the scope of the sanction. The WCAB ordered defense attorney Brittany Luedecke and the Law Offices of Schlossberg & Umholtz to jointly and severally pay $1,000 to the state General Fund within 20 days of service (plus five days for mailing). The final sanctions order named only the attorney and law firm, not the employer, insurer or claims administrator.

The Misrepresented Cases and Fabricated Quotations

The sanctions stemmed from misrepresentations concerning psychiatric Qualified Medical Evaluator panel evaluations under Labor Code section 3208.3(d), which governs the six-month employment requirement for psychiatric injury claims. Defense counsel cited two panel decisions to argue that threshold employment defenses must be litigated before obtaining a psychiatric evaluator panel.

First, the petition cited Muldrow v. AMS Outsourcing / Staffchex, claiming it established a general rule that section 3208.3(d) must be decided prior to a psychiatric evaluation. In fact, the Muldrow panel explicitly rejected that general proposition, allowing pre-evaluation litigation only because of a specific, unappealed trial minute order unique to that record.

Second, the petition cited Mangan v. Oakdale Inn, inserting explicit quotation marks claiming the board required threshold legal issues to be resolved before incurring medical-legal evaluation costs. The panel found those quotes did not exist in any published board decision. In reality, Mangan held the opposite, affirming an order that issued a psychiatric panel and deferred the section 3208.3(d) defense.

Staff AI Use and the Attorney's Duty to Supervise

In response to the board's notice, defense counsel reported that non-attorney office support staff generated the fake quotations using generative artificial intelligence tools. Defense counsel explained that the citations remained in the filed petition due to inadvertence while the supervising attorney experienced a personal family emergency.

The panel acknowledged the emergency and credited counsel's candid response, citing those mitigating factors to reduce the monetary sanction from $2,500 to $1,000. However, the board held that a personal emergency does not excuse filing false statements or unverified citations.

Relying on Rule 5.3 of the California Rules of Professional Conduct and the en banc decision in Ledezma v. Kareem Cart Commissary and Mfg. (2024) 89 Cal. Comp. Cases 462, 473 (en banc), the panel reaffirmed that attorneys must supervise non-attorney employees at all times. The board noted that if an emergency prevents an attorney from reviewing pleadings, the firm must assign another attorney to provide supervision or seek leave from the court, rather than submitting unverified filings.

Limits of the Decision for Workers' Compensation Practice

The Tovar decision establishes distinct practical limits for attorneys and injured workers reviewing workers' compensation proceedings:

First, the panel emphasized that generative AI tools are not prohibited in WCAB practice. However, under WCAB Rule 10940(c), petitions must be verified under oath, obligating counsel to personally verify that cited cases exist and accurately support the asserted propositions.

Second, as a panel decision rather than an en banc ruling or published appellate opinion, Tovar is nonbinding and cannot be cited as controlling precedent in unrelated WCAB disputes.

Third, Tovar addresses procedural sanctions and lawyer supervision rather than altering substantive medical-legal discovery rules. The decision leaves unchanged the underlying standards governing when psychiatric evaluator panels may be issued alongside deferred threshold defenses.

Understanding Procedure and Board Filings

Frivolous filings or misstated legal rules can derail workers' compensation proceedings and create unnecessary delays for injured workers and employers alike. If you need assistance evaluating a disputed workers' compensation claim, addressing medical-legal evaluator disputes, or navigating board appeals, visit our workers' compensation practice page to learn how our firm reviews case records and represents clients in board proceedings.