Nippon Life Insurance Sues OpenAI Over AI-Generated Legal Advice
On March 4, 2026, Nippon Life Insurance Company of America initiated legal proceedings against OpenAI Foundation and OpenAI Group PBC in the U.S. District Court for the Northern District of Illinois. The lawsuit claims an employee's extensive use of ChatGPT—an AI tool developed by OpenAI—resulted in actions that interfered with a contractual agreement, constituted abuse of judicial processes, and amounted to unauthorized legal practice.
Nippon Life, a provider of long-term disability insurance in the U.S. and a subsidiary of Japan's Nippon Life Insurance Co., filed this action due to events involving Graciela Dela Torre. Dela Torre had previously filed a claim for long-term disability benefits due to medical conditions and later settled a lawsuit with Nippon Life in January 2024, wherein she waived further claims. Despite this settlement, Dela Torre became dissatisfied, sought advice from ChatGPT, and took subsequent legal actions influenced by its responses.
After ChatGPT allegedly advised her that she might have been coerced into the settlement, Dela Torre attempted to reopen her case. The court denied this motion in February 2025, but she initiated new litigation against another insurer and reasserted claims against Nippon Life in a separate suit, with all filings reportedly generated via ChatGPT assistance.
Nippon Life's complaint includes allegations of interference with the contractual agreement due to advice provided by ChatGPT, abuse of the judicial process through the filing of numerous legal motions lacking merit, and violation of Illinois law on unauthorized practice of law, asserting that ChatGPT functioned beyond its purpose by essentially providing legal counsel.
The case also highlights issues surrounding OpenAI's marketing of ChatGPT’s capabilities, such as its performance on the bar exam, which Dela Torre perceived as verifying its suitability for legal advice. Despite OpenAI's policy updates in 2024 prohibiting legal advice from ChatGPT, Nippon Life argues this was insufficient to prevent misuse.
OpenAI refutes Nippon Life’s claims, labeling the lawsuit as baseless, and as of now, no legal representation for the defendants has been entered. This case could significantly impact the regulation of AI tools in compliance with professional licensing and regulatory frameworks within various industries. The legal community is closely monitoring how this proceeding will address the delineation between permissible AI functions and the unauthorized practice of law.