Home Alone 2, Lost in New York premiered a little over three decades ago, just in time for Christmas. The holiday release became an instant classic. One can imagine that an updated version would perhaps include an Airbnb stay, were it not for the new short-term rental laws now in effect. According to a recent NY Times article, “[c]ity officials estimated there were roughly 10,800 Airbnb listings as of March 2023 that were illegal short-term rentals.”
Administrative Law Challenge in State Court
In a still-active, recent NY State Court case before the Honorable Arlene Bluth, three petitioners are seeking injunctive relief to stop the enforcement of code sections enacted this year that effectively ban short-term rentals in the famous city. Petitioners argued they will suffer irreparable injury if an injunction is not granted. They argue the final rules would result in abrupt cancellations of bookings, and harm their ability to earn income from hosting guests. They assert that preserving the status quo and allowing hosts to continue to entertain visitors in New York is in the best interest of the balance of equities.
At the heart of the dispute is Local Law 18, a set of strict guidelines governing short-term rentals (less than 30 consecutive days). The law includes the promulgation and maintenance of a Prohibited Buildings List, which effectively prevents tenants from registering properties over the wishes of building owners, co-op, and condo boards without their express consent. (See, e.g., § 21-10 titled Registered host requirements ) The enforcement arm is the New York City Mayor’s Office of Special Enforcement (OSE).
Airbnb’s Hardships Are No Match for the City that Never Sleeps
In August of this year, Airbnb lost its bid for an injunction against enforcement of Local Law 18, arguing that the requirements are arbitrary and capricious and that the rules should be stricken. They further asserted that the rules have a chilling effect on hosts simply wishing to lawfully engage in the short-term rental business. Finally, they insisted that Airbnb’s business will be substantially affected. They claimed losses could be as high as up to 95% of their net revenue from short-term rental listings in New York City if they are forced to remove listings subject to the rules (due to having to remove those listings without proper verification information). The court remained unconvinced of Airbnb’s argument of hardship in relation to the new rules. In its decision dismissing the case, the court made clear its position, stating:
“Of course, Airbnb has known about these rules for many months and has had ample opportunity to tell its hosts about these new rules and tell them to apply for a registration number. Nevertheless, it made no assertions in these papers that it has stopped or modified bookings for stays after the effective date of these rules. In other words, Airbnb cannot make little or no effort to tell its hosts to register and then complain that it might have to take down hundreds or thousands of listings because they are not registered. As the regulations relate to Airbnb, they give Airbnb a very simple way to make sure it is no longer facilitating – and making money from – unlawful activity. All Airbnb has to do is properly verify potential listings.”
Interested in other state court filings involving companies like Airbnb? Curious about recent state court decisions involving administrative law? Or perhaps a judge presiding over such cases? Check out Trellis. Trellis is an AI-driven, state trial court research and analytics platform. We make the fragmented US state trial court system searchable through a single interface by providing lawyers with analytical insights on judges, cases, and opposing counsel. Request a demo today and experience for yourself the ease of our analytics and API that provide you with the tools needed to streamline your legal practice.
As jurists, law firms, legal professionals, and the public struggle to keep pace with the swift advancement of artificial intelligence, it is no surprise that courts are beginning to draft and enact rules for using these tools in legal proceedings. Just last week, before the Thanksgiving break, the Fifth Circuit Court of Appeals opened the comment period for its draft of a proposed amendment to certification rules for both lawyers and pro se litigants. The proposed new text calls on parties to “certify that, to the extent an AI program was used to generate a filing, citations and legal analysis were reviewed for accuracy.”
The Fifth Circuit has jurisdiction over Louisiana, Mississippi, and Texas courts. Fifth Circuit Rule 32.3 governs the form of filings, including typeface, word count, and type-style. The amendment includes the following proposed paragraph:
“Additionally, counsel and unrepresented filers must further certify that no generative artificial intelligence program was used in drafting the document presented for filing, or to the extent such a program was used, all generated text, including all citations and legal analysis, has been reviewed for accuracy and approved by a human.”
The rule calls for the striking of documents and sanctions for noncompliance or misrepresentation concerning failure to acknowledge the use of AI.
Legal Professionals Transformed into Supervisors of AI
The proposed requirements are nothing new. In June of this year, U.S. District Judge Brantley Starr of the Northern District of Texas implemented a rule where attorneys must attest to personally overseeing the preparation of their documents, explicitly confirming accuracy where AI is used. Does this signal the end of painstaking work of law clerks, paralegals, legal secretaries, or law librarians who often spend hours, if not days, scouring the internet and shelves for sources? Are legal professionals becoming the supervisors and spot checkers for accuracy of AI? Perhaps this is the dawn of an entirely new profession, legal prompt engineering, whereby the attestation to accuracy and review by a human is all it takes to accept the new Artificial Legal Professional’s work.
In any case, what is increasing clear is that while AI has immense potential to revolutionize the legal sector, caution must be exercised. Professionals need to be educated about where data comes from, how AI models work and their limitations, and when to rely on AI versus when to lean on human judgment. Proper implementation, transparency, and continuous learning are key. This is especially important in the application of law. Indeed, to this point, Judge Starr is reported to have declared his refusal to use AI, stating, “I don’t want anyone to think that there’s an algorithm out there that is deciding their case…” This comment highlights the different concerns various legal professionals might consider in their implementation of these tools.
Hallucinations and Trust
One of the biggest challenges when it comes to the use of AI in the legal profession, is trust. The prospect of an AI model hallucinating results into a document is an all too real scenario. Back in May of this year, a lawyer who had used ChatGPT for citations in a legal brief found himself on the receiving end of sanctions, precisely because the brief cited six non-existent court decisions.
The escalating reliance on artificial intelligence in the legal domain underscores the paramount importance of ensuring its quality, accuracy, ethical integrity, and trustworthiness in user interactions. This necessity becomes starkly apparent when considering the possibility of an AI system’s erroneous interpretation of legal precedents or the hallucination of non-existing cases. These examples amplify the urgency for implementing standards and codes of conduct, potentially reinforced by legal penalties, to guarantee that AI applications in legal proceedings align with the profession’s exacting requirements. This approach is critical for fostering a deep-rooted trust in this transformative technology, which is reshaping both the legal landscape and global society.
Interested in Incorporating AI into your Workflow?
Check out Trellis! Trellis is an AI-driven state trial court research and analytics platform. We make the fragmented US state trial court system searchable through a single interface by providing lawyers with analytical insights on judges, cases, and opposing counsel. Request a demo and check out our state trial court platform, analytics, and API so that we can provide you with the tools needed to streamline your legal practice.
After a week of turmoil that began just last Friday with the ouster of OpenAI’s CEO Sam Altman, in another shocking twist of events, it was announced this morning that as of late Tuesday night, Sam Altman has been officially reinstated as OpenAI’s CEO, “reversing his ouster by OpenAI’s board last week” in response to “campaigns waged by his allies, employees, and investors.”
After negotiations throughout the weekend, OpenAI’s board will be overhauled, with Adam D’Angelo (Quora’s CEO) remaining the only holdover. The new board includes former Facebook officer Bret Taylor and former Treasury Secretary Lawrence Summers. OpenAI announced Taylor will act as board chairman for now.
Toner and McCauley –two original board members who ousted Altman agreed to step down “because it was clear that [the board] needed a fresh start.” Outgoing board members “pressed for certain concessions from Mr. Altman, including an independent investigation into his leadership of OpenAI.” According to sources close to the negotiations, the outgoing members also blocked Altman and Brockman’s return to the board.
After a whirlwind of a weekend, OpenAI employees were given this week off for Thanksgiving, and Ilya Sutskever’s attorney announced that Ilya is thrilled Altman is back as CEO and that Ilya has worked tirelessly over the past few days to make this happen with his attorney declaring: “It is what is best for the company.”
Microsoft fully supports Altman’s reinstatement, with Microsoft Chief Satya Nadella announcing on X that it is a “first essential step on a path to more stable, well-informed, and effective governance.” Furthermore, Thrive Capital announced it would continue to partner with OpenAI with a new funding offer that will now value the company at $80 billion. OpenAI went through a war, but the company came out reunited with positive prospects for its future.
What Happened?
Four of five OpenAI board members, including Adam D’Angelo, Helen Toner, Tasha McCauley, and Ilya Sutskever, decided to oust Sam Altman from the company last Friday afternoon. In their statement, the board announced Mira Muratie, OpenAI’s chief technology officer, would take over as interim CEO. After that, Microsoft Chief Satya Nadella reaffirmed the company’s commitment to its partnership with OpenAI even as Microsoft’s stock plummeted due to Altman’s termination.
A few hours after the board’s decision was announced, Greg Brockman, the chairman of the board and a co-founder of the company, took to X and announced he was quitting OpenAI. Following this, various tech leaders and industry voices took to social media to support Altman, including Atlman’s younger brother and CEO of Lattice, Jack Altman, former Google CEO Eric Schmidt, and Airbnb CEO Brian Chesky.
Shortly after that, Microsoft (OpenAI’s biggest investor who owns 49% of the company) announced it would hire Altman and Brockman, and the two men would lead an advanced research lab at Microsoft. Microsoft’s CEO, Nadella, announced that Altman would be chief executive of the new lab, “setting a new pace for [AI] innovation” and that the lab would “operate as an independent entity within Microsoft.”
On Sunday, November 20th, OpenAI named Emmett Shear, former CEO of Twitch, as the OpenAI’s interim CEO. Meanwhile, throughout the weekend, Altman and his supporters pressured OpenAI’s board to reinstate him. Microsoft led the charge, which included appeals from venture capitalists, other tech executives, and smaller investors concerned about the shocking developments.
Then, in an epic display of solidarity, 700 out of 770 employees signed a letter on Monday, November 21st, stating they would resign from OpenAI if Altman were not reinstated. Ilya Sutskever, the company’s chief scientist and co-founder, signed the petition and took to X announcing that he deeply regretted his part in the board’s decision to fire Altman, saying he “never meant to harm the company.” In the letter, the employees threatened to leave the company for Microsoft if Altman was not reinstalled as the CEO. According to sources, Microsoft offered guaranteed positions for all OpenAI employees at Microsoft and agreed to match their pay.
What Does This Mean for the AI Industry?
The chaotic rift at OpenAI highlights a more extensive debate in the AI community. Some AI creators believe that AI is the most significant technological breakthrough since the creation of the internet and want to push its boundaries and tap into AI’s fullest potential. Others caution that if AI is not developed carefully and regulated by strict guidelines and policies, it could be dangerous for the world and a major threat to humanity. Indeed, it was Ilya Sutskerver who, in filmed interviews with Tonje Hessen Schei for a feature length project titled iHumanhighlighted sobering question about the advancement of GAI and whether this was good or bad for humanity. This debate played out in the schism of OpenAI’s former six-member board.
Three of OpenAI’s now former board members fall on one end of the spectrum of this debate. “Tasha McCauley and Helen Toner have ties to the Effective Altruism movement, a utilitarian-inspired group that has pushed for AI safety research and raised alarms that a powerful AI system could one day lead to human extinction.” According to sources who spoke to the NY Times, Ilya Sutskever, was also “increasingly worried that OpenAI’s technology could be dangerous and that Altman was not paying enough attention to that risk.”
D’Angelo, a remaining board member, lies somewhere in the middle. He is a longtime friend of Altman and has previously written, “There is a risk that as AI gets better and better, it at least destabilizes things…This is totally independent of concerns about AI ‘taking over’ with its own ‘free will.’ I think that is a risk, too, but it is much further off.”
Altman and Brockman are at the other end of the spectrum. Altman, one of the most recognizable faces in the tech industry, has spent his career pushing for the advancement of AI and “led OpenAI to the adult table of the technology industry.” He is why the San Francisco startup is now at the center of an AI boom, despite some believing he needs to pay more attention to AI’s potential dangers and risks. This tension, it is said, gave rise to the series of events that unfolded over the weekend and into the week, and it will continue to permeate the tech industry as AI develops rapidly –with legislators and regulators rushing to catch up.
What a Story…Want More?
It’s been a crazy week for the folks at OpenAI. Check back with the Trellis blog for updates on this story. Interested in integrating AI into your legal workflow? Want to save time researching, writing, and prepping for trial? Check out Trellis! Trellis is an AI-powered state court research and data analytics platform created by litigators for litigators. We have the largest searchable database of state trial court records, so you can save time, and stay current with ongoing litigation by accessing thousands of searchable court documents. Dive into our judge and law firm analytics and make actionable decisions in court. Contact us today for a demo.
Happy Thanksgiving from all of us here at Trellis!
