The Tenth Circuit Affirms a Fee Award and Says the Plaintiffs Identified No Evidence That Counsel's Use of AI Resulted in Excessive Billing

On October 30, 2026, the United States Court of Appeals for the Tenth Circuit decided three consolidated appeals from the federal trial court in Colorado, one from an order dismissing claims for lack of personal jurisdiction and two from orders awarding attorneys' fees, and affirmed all three orders. In its opinion, marked for publication, the court answers an argument that the defendants' lawyers "should have billed fewer hours due to their reliance on artificial intelligence," and on other online research tools. Parts of the opinion follow, not the whole.

How the Fee Was Set

The trial court dismissed the claims against three of the defendants for lack of personal jurisdiction. Those defendants then moved for attorneys' fees under Colorado's fee-shifting statute, which, the opinion says, "mandates an award of fees when an action is dismissed" for lack of personal jurisdiction. They asked for $114,663.11. A magistrate judge recommended granting it in full. The district court agreed, adopting the recommendation and awarding the full amount.

The opinion sets out how a court reaches a reasonable fee. It starts from the lodestar, which is the hours reasonably expended multiplied by a reasonable hourly rate, and the party asking for fees bears the burden of establishing its entitlement and documenting the hours and the rates. The court must then make sure the lawyers have exercised "billing judgment" by winnowing out unreasonable hours. It may cut hours where the time records are sloppy and imprecise and fail to show adequately how large blocks of time were used, or where hours were "unnecessary, irrelevant and duplicative."

Here the magistrate judge had reviewed the submissions. In doing so, the opinion says, the magistrate judge considered, among other things, that defense counsel "tracked time to the tenth of an hour, did not engage in block billing, reduced hours where appropriate, and faced additional work because Plaintiffs amended their pleading." The magistrate judge found the hours reasonable, and the rates reasonable against prevailing market rates in the Colorado community for attorneys with comparable experience.

The award rested on the billing records and on rates nobody challenged: hours kept to a tenth, no block billing, hours reduced where appropriate. Would a firm's records of AI-assisted work show as much if its bill were questioned?

The Objections on Appeal

On appeal the plaintiffs challenged the reasonableness of the award on multiple grounds. Among their grounds were that defense counsel engaged in serial billing across multiple motions, billed partner time for ministerial tasks, and should have billed fewer hours because of their reliance on AI and other online research tools. A footnote records a further argument, on administrative percentages, which the court holds waived.

The court rejected the first two. Of the first, it says the plaintiffs "fail to identify any specific instance of serial billing." Of the second, it says they "fail to identify any specific billing entries that were improperly billed as partner time."

On the third, the court says that "Plaintiffs identify no evidence that counsel's use of AI resulted in excessive billing." It is possible, the opinion goes on, that a law firm's use of AI and other online research tools may "reduce[] the number of hours required" for research and thereby lower the lodestar amount. It cites a 2004 decision of another federal appeals court recognizing that online research services may reduce the hours required for manual research.

Why the Hours Stood

"As the magistrate judge explained, however," the court says, "ethical rules require counsel to verify the cases cited and to ensure that all arguments are grounded in legal authority." Among the decisions it cites are its own of 2026 imposing sanctions on a pro se attorney who used a generative AI tool to research and draft an appellate brief "without verifying whether the cited cases actually existed," and a federal trial court's finding that attorneys violated Rule 11 by submitting court filings with AI hallucinations.

Even assuming that AI and other research tools "might make attorneys more efficient in the long run," and in some circumstances "might thereby reduce the hours necessary to litigate a case," the court says the plaintiffs "have not shown that defense counsel's use of AI rendered the hours that they actually expended unreasonable."

The magistrate judge's review of the billing records, together with the unchallenged finding that the rates were reasonable, "provided an adequate basis for an appropriate fee award," the court says. It affirmed the order granting the fees in full.

The opinion leaves both standing: a lodestar that AI and other research tools may lower, and a duty to verify the cases cited. Where a bill is challenged on AI, what in the time record would show the difference?