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Nippon Life Insurance Company of America has filed a lawsuit against OpenAI, alleging that its ChatGPT chatbot practiced law without a license after encouraging a claimant to reopen a disability benefits case that had already been settled and dismissed.
The suit, filed in federal court in Chicago, is believed to be among the first to accuse a major artificial intelligence (AI) developer of engaging in unauthorized legal practice through a consumer-facing chatbot.
The case stems from events following a January 2024 settlement. The claimant, an employee at a logistics company with insurance coverage through Nippon, had settled her long-term disability benefits suit with prejudice. Last year, she uploaded an email from her then-lawyer into ChatGPT, which allegedly validated her concerns about the legal advice she had been receiving. She subsequently dismissed her lawyer and used ChatGPT to generate filings seeking to reopen the closed case.
A federal judge denied the bid in February 2025. The claimant then filed a new case and continued to produce numerous motions and notices that Nippon contends served "no legitimate legal or procedural purpose." Nippon claims ChatGPT drafted those papers, costing the company considerable time, resources, and legal fees to respond.
In the suit, Nippon pointed out that ChatGPT is "not an attorney" and has not "been admitted to practice law in the State of Illinois or in any other jurisdiction within the United States." The company also noted that while OpenAI amended its policies in October 2024 to bar users from seeking legal advice through the platform, no such restrictions were in place beforehand.
The suit seeks a court order finding that OpenAI violated Illinois' unauthorized practice of law statute, along with US$300,000 in compensatory damages and US$10 million in punitive damages.
OpenAI denied the allegations. "This complaint lacks any merit whatsoever," the company said in a statement cited by Reuters.
Nippon is represented by Christopher Assise of Sidley Austin and Justin Wax Jacobs, assistant general counsel at Nippon Life Benefits. OpenAI had not filed a legal appearance as of the time of reporting.
The lawsuit arrives amid growing concern over the use of generative AI tools in legal proceedings. Courts across the United States have sanctioned litigants and lawyers for submitting filings containing fabricated case citations and other unverified content produced by AI chatbots.
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