OpenAI is facing a legal challenge in the United States after an insurance company accused the maker of ChatGPT of operating like an unlicensed attorney and helping a claimant revive a case that had already been settled.
The complaint was filed in federal court in Chicago by Nippon Life Insurance Company of America, which alleges that OpenAI provided legal-style guidance through ChatGPT that prompted a former disability claimant to reopen a closed dispute and flood the court with filings the company describes as baseless.
According to the filing, the chatbot effectively assisted the woman in challenging a case that had already been resolved and dismissed. The insurer argues that such conduct amounts to the unauthorized practice of law under Illinois rules. It is asking the court to formally declare that OpenAI violated the statute, along with seeking $300,000 in compensatory damages and $10 million in punitive damages.
OpenAI has pushed back strongly, saying the allegations are without merit.
At the center of the dispute is a former employee of a logistics company whose long-term disability claim had previously been settled. The woman reportedly turned to ChatGPT after uploading an email from her then-legal representative. The chatbot allegedly affirmed her concerns about the advice she had received.
After dismissing her attorney, she attempted to reopen the closed case using documents she prepared with assistance from the AI system. A judge rejected that attempt in early 2025. However, the woman later launched a new legal action and submitted dozens of additional motions and notices.
The insurer claims those filings served no legitimate legal purpose and says many appeared to be generated with the help of ChatGPT. Responding to them, the company says, forced it to spend significant time and resources addressing the filings in court.
The case is notable because it targets a major AI developer over claims that a consumer chatbot effectively stepped into the role of a legal professional. As generative AI tools gain traction in legal work, courts across the United States have already confronted a separate problem: filings containing fabricated case citations or other errors produced by AI systems.
Nippon argues that OpenAI only added restrictions later, noting that the company updated its policies in October to prohibit users from relying on the platform for legal advice. The insurer contends those guardrails were not in place earlier, when the disputed filings were created.
The lawsuit, filed in the United States District Court for the Northern District of Illinois, could become an early test of how far liability for AI-generated legal guidance might extend as courts grapple with the growing presence of artificial intelligence in litigation.
