Nippon Life v OpenAI Foundation

Nippon Life Insurance Co. of America v. OpenAI Foundation is a federal lawsuit filed on March 4, 2026, in the United States District Court for the Northern District of Illinois (Case No. 1:26-cv-02448), accusing OpenAI of practicing law without a license through its ChatGPT chatbot.

Background

The lawsuit stems from a complex procedural history involving a former disability claimant. An individual filed a long-term disability (LTD) claim with her employer in 2019. Although initially granted in 2021, the claim was later deemed ineligible. The individual hired lawyers and sued parties involved with the LTD policy in 2022, and the case settled in 2024 with a formal settlement agreement.

When a court rejected the individual's motion to reopen the matter in February 2025, she filed a new lawsuit using a complaint drafted by ChatGPT. Over the following year, the individual filed 44 additional motions, memoranda, demands, petitions, and requests—all drafted with ChatGPT's assistance, including motions that cited non-existent cases.

Claims

Nippon Life Insurance Co. of America, the plaintiff, asserted three core claims against OpenAI:

1. Tortious Interference with Contract: Nippon Life alleged that after the individual fed the settlement agreement into ChatGPT, OpenAI deliberately programmed ChatGPT to provide legal assistance designed to induce the individual to breach the settlement agreement terms and encourage continued engagement with the chatbot.

2. Abuse of Process: The complaint claimed OpenAI, through ChatGPT, "aided and abetted" the individual's filing of frivolous motions by providing legal advice, legal analysis, legal research, and assistance in drafting and preparing documents for court submission.

3. Unlicensed practice of law: The complaint alleged that ChatGPT provides legal advice, legal analysis, legal research, and drafts legal documents for court submission to any requesting user, while not being licensed to practice law in any U.S. state.

Notably, OpenAI modified its terms of use on October 29, 2025, to prohibit users from using ChatGPT for "provision of tailored advice that requires a license, such as legal or medical advice, without appropriate involvement by a licensed professional."

Relief Sought

Nippon Life requested:

• A declaratory judgment that ChatGPT practiced law without a license
• A permanent injunction against ChatGPT providing legal advice to individuals
• Punitive damages of US$10 million

Significance

This case is among the first to allege that an AI chatbot constitutes the unlicensed practice of law. Legal analysts have noted that the case raises novel questions about whether AI systems that generate legal documents and provide legal analysis can be held liable for unauthorized practice of law, and whether platform providers like OpenAI can be responsible for how users employ their tools.

Some commentators have characterized the lawsuit as fundamentally a product liability case rather than a traditional unlicensed practice claim, arguing that ChatGPT's design features—such as its conversational interface and tendency to generate persuasive legal arguments—inherently lead users to rely on it for legal guidance.