Law Firm Suit against AI Legal Subscription Service Dismissed for Lack of Standing

A U.S. District Court in Illinois dismissed a case by the Chicago-based law firm MillerKing LLC against the so-called “robot lawyer” DoNotPay, Inc. (DNP). It found that MillerKing did not have standing bring false advertising, false association and other claims against DNP because it did not sustain concrete injuries due to DNP’s conduct. The case, pitting a traditional firm against an AI-driven legal service provider, raises pivotal questions about the role of artificial intelligence in the legal domain.

For background, DNP offers an online, subscription-based service that it claims will help consumers “[f]ight corporations, beat bureaucracy and sue anyone at the press of a button.” It offers services related to marriage annulment, speeding ticket appeals, timeshare cancellation, breach of contract, defamation, copyright, child support, restraining orders, and trusts—as well as standardized legal documents—all for a monthly fee. However, DNP is not licensed to practice law and does not employ licensed attorneys. Rather, it uses artificial intelligence to provide its services.

In contrast, MillerKing is a traditional law firm. In the lawsuit against DNP, it sought to bring a class action on behalf of “[a]ll law firms in the United States in existence during the Class Period,” with claims for:

  • False Association under the Lanham Act, 15 U.S.C. § 1125(a)(1)(A), alleging that DNP made representations creating a false impression that it was affiliated with licensed attorneys and approved by the state bar;
  • False Advertising under the Lanham Act, 15 U.S.C. § 1125(a)(1)(B), alleging that DNP falsely represented that its services were offered by a lawyer, which influenced the purchasing decisions of DNP’s customers;
  • Violations of the Illinois Uniform Deceptive Trade Practices Act, 815 ILCS 510/1 et seq., alleging that DNP’s misleading statements misrepresented the affiliation, sponsorship, and quality of its services; and
  • Unauthorized Practice of Law under the Illinois Attorney Act, 705 ILCS 205/1, and the Corporation Practice of Law Prohibition Act, 205 ILCS 220/1 and 705 ILCS 220/2.

The case raises interesting questions about the nature of False Association and False Advertising claims under the Lanham Act. It also raised broader questions about how AI-driven services like DNP fit into the legal landscape, particularly when they operate in a manner similar to traditional legal services. Yet, the decision came down to a simple issue: Article III standing.

As the opinion explained, Article III of the U.S. Constitution limits federal courts to resolving “cases” and “controversies,” meaning “actual and concrete disputes [that] … have direct consequences on the parties involved.” According to the court, the key is that the plaintiff must have a “personal stake” in the outcome of the suit. In particular, the plaintiff must establish that it suffered a concrete, particularized, and actual or imminent injury caused by the defendant that could be redressed by judicial relief.

In the suit against DNP, MillerKing claimed to have injuries resulting from a “direct diversion of clients from [itself] to DNP” and “a lessening of the goodwill associated with [the firm] and [its] goods and services.” It further claimed that allowing DNP to practice law without the requisite experience, competence, and licensure would harm citizens in need of legal services, and also, infringe the rights of law firms that employ licensed attorneys.

The court found these arguments unpersuasive. It said that MillerKing “has not alleged any lost revenue or added expenditures as a result of DNP’s conduct[, n]or has it alleged that any client or prospective client has withheld business, has considered withholding business, or has even heard of DNP.” Further, the court found that MillerKing “has not presented facts to support its claim that DNP has hurt its reputation or lessened its goodwill.” While MillerKing claimed that DNP had provided poor customer service and caused adverse legal consequences for its customers, it did not show that such failures “were imputed to MillerKing specifically or lawyers generally.”

The court dismissed the suit against DNP without prejudice, giving MillerKing an opportunity to amend its pleadings and try again. Regardless of how MillerKing chooses to proceed, the case has significant implications for the legal and tech industries:

  1. Regulatory Challenges. It highlights the need for regulations regarding AI in legal services, particularly with respect to consumer protection, ethical standards and the unauthorized practice of law.
  2. Competitive Landscape. Law firms must consider the growing competition from tech-driven legal service providers and the need to adapt to a changing marketplace.
  3. Technological Innovation and Legal Ethics. Balancing technological innovation with the ethical practice of law is a critical challenge, and this case serves as a reminder of the balance between embracing new technologies and adhering to the established legal framework.

As AI continues to advance, the legal community must grapple with these emerging challenges, ensuring that innovation does not outpace the ethical and legal standards that define the profession and protect consumers.


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