Schaaf v. Nellis Auction Holdings, LLC, No. 2:25-cv-00647-JCM-NJK (Jan. 30, 2026)

Case details
Full caption
Stephen Schaaf v. Nellis Auction Holdings, LLC, et al.
Country
United States
Jurisdiction
Nevada (NV)
Court
Nevada Supreme Court
Decided
Jan. 30, 2026
Disposition
Motion Denied
Majority
Order Nancy J. Koppe (J.) (unanimous Court)
Stephen Schaaf, Plaintiff(s), v. Nellis Auction Holdings, LLC, et..., Slip Copy (2026) © 2026 Thomson Reuters. No claim to original U.S. Government Works.12026 WL 266231Only the Westlaw citation is currently available.United States District Court, D. Nevada.Stephen Schaaf, Plaintiff(s),v.Nellis Auction Holdings, LLC, et al., Defendant(s).Case No. 2:25-cv-00647-JCM-NJK|Filed 01/30/2026[Docket Nos. 99, 100, 103]Attorneys and Law FirmsJason J. Kuller, Ciara Sooniem Alagao, Rafii & Associates,P.C., Las Vegas, NV, Roberto Montes Jr., Pro Hac Vice, Rafii& Associates, P.C., Beverly Hills, CA, for Plaintiff.Bradley T. Austin, Theresa Trenholm, Paul Swenson Prior,Snell & Wilmer LLP, Las Vegas, NV, Eric D. Hone, JenniferW. Arledge, Kelly B. Stout, Leslie A.S. Godfrey, Sarah A.Harmon, Hone Law, Henderson, NV, for Defendants NellisAuction Holdings, LLC, Nellis Auction Arizona, LLC, NellisAuction Colorado, LLC, Nellis Auction New Jersey, LLC,Nellis Auction Texas, LLC.Bradley T. Austin, Paul Swenson Prior, Snell & Wilmer LLP,Las Vegas, NV, Eric D. Hone, Jennifer W. Arledge, Kelly B.Stout, Leslie A.S. Godfrey, Hone Law, Henderson, NV, forDefendant Cret LLC.Bradley T. Austin, Paul Swenson Prior, Snell & WilmerLLP, Las Vegas, NV, Kelly B. Stout, Sarah A. Harmon,Hone Law, Henderson, NV, for Defendants SAC Trust 2,Spencer Chupinsky, Halcyon Third Millenium Trust, KennethChupinsky.Bradley T. Austin, Theresa Trenholm, Snell & Wilmer LLP,Las Vegas, NV, for Defendant Nellis Auction Holdings LLC.OrderNancy J. Koppe United States Magistrate Judge*1 Pending before the Court are Defendants’ motion forsanctions, motion to strike, and motion to stay. Docket Nos.99, 100, 103. The parties filed supplemental briefing. DocketNos. 129, 130. The Court finds the motions properly resolvedwithout a hearing, see Local Rule 78-1, so the hearing thathad been set is VACATED. For the reasons discussed below,the motions are DENIED.I. BACKGROUNDThe case has included several instances of improper citationto caselaw by Plaintiff's counsel stemming from over-relianceon artificial intelligence in drafting three briefs. See DocketNo. 99-1.1 Defendants raised that issue in responding to thespecific briefs through the underlying motion practice. SeeDocket No. 88 at 2 n.1; Docket No. 89 at 5-9; Docket No. 101at 2. Defendants also filed a stand-alone motion for sanctionsand to strike. Docket Nos. 99, 100. Defendants also filed amotion to stay pending resolution of the motion for sanctions.Docket No. 103.II. MOTION TO STRIKEDefendants seek an order striking certain briefing on earliermotion practice filed at Docket Nos. 82, 85, 93, and 96. SeeDocket No. 100 at 10 n.61. As noted above, Defendants raisethe same issues in the underlying motion practice. See DocketNo. 89 at 5-9 (arguing for denial of Docket No. 82 on thesame grounds as addressed in the motion to strike); DocketNo. 88 at 2 n.1 (arguing that Docket No. 85 contains falselegal citations); Docket No. 101 at 2 (arguing that Docket Nos.93 and 96 should be denied based on incorrect citations). It isnot clear why the Court should effectively address the sameissue through the instant motion when it is already briefed inthe underlying motion practice. As such, this motion to strikewill be denied as duplicative.III. MOTION FOR SANCTIONSDefendants seek case-terminating sanctions. Docket No.99.2 As the motion acknowledges, case-dispositive sanctionsare limited to extreme situations based on considerations suchas prejudice to the opposing party and the unavailability oflesser sanctions. See, e.g., Leon v. IDX Sys. Corp., 464 F.3d951, 960 (9th Cir. 2006). While the Court takes very seriouslycounsel's duty of candor and competency—including toensure that they are citing real law—the instant motion doesnot show that case-dispositive sanctions are warranted in thecircumstances described. Indeed, Defendants cite to only onecase imposing dismissal sanctions for a litigant's misuse ofartificial intelligence in court filings, see Docket No. 119,and that case included concerns that the complaint itselfwas hallucinated, see ByoPlanet Int'l, LLC v. Johansson, 792
Stephen Schaaf, Plaintiff(s), v. Nellis Auction Holdings, LLC, et..., Slip Copy (2026) © 2026 Thomson Reuters. No claim to original U.S. Government Works.2F. Supp. 3d 1341, 1356 (S.D. Fla. 2025).3 In this case,Defendants point to incorrect citations in briefing (not ina pleading) that Defendants have already addressed in theunderlying briefing itself, such that the issue can be resolvedtherein. Hence, this case does not involve the type of prejudicethat warrants dismissal sanctions as recognized in the motionitself. See Docket No. 99 at 8 (explaining that prejudicewarranting dismissal sanctions exists “if the plaintiff's actionsimpair the defendant's ability to go to trial or threaten tointerfere with the rightful decision of the case”). Moreover,the Court is not persuaded that sanctions less severe thandismissal are unavailable in the circumstances of this case andthe Court admonishes Plaintiff's counsel below. As such, theCourt is not persuaded that case-dispositive sanctions shouldbe imposed.4IV. MOTION TO STAY*2 Defendants filed a motion to stay the case or discovery,pending resolution of their case-dispositive sanctions. DocketNo. 103. As explained above, the Court is not persuaded thatcase-dispositive sanctions are warranted. As such, the motionto stay is moot.V. ADMONISHMENT OF PLAINTIFF'S COUNSELThe papers allude to potentially significant life events forcounsel, see, e.g., Docket No. 73 at 2 (referencing surgery),but that does not excuse the over-reliance on artificialintelligence displayed here. While the Court declines toimpose the harshest of sanctions given the circumstances,the Court ADMONISHES Plaintiff's counsel (Jason Kuller)for his lapse in his duties as an officer of the Court.Counsel should expect that continuing to engage in thisbehavior will result in serious sanctions, up to and includingcase-dispositive sanctions imposed on his clients, monetarysanctions, and referral to the state bar.In addition to the very serious issue of unverified artificialintelligence usage, Plaintiff's counsel has engaged in avariety of other problematic conduct. For example, Plaintifffailed to comply with the deadline to oppose the motionfor case-dispositive sanctions despite receiving multipleextensions and assuring the Court that the responsive briefwould be timely filed in accordance therewith. See, e.g.,Docket No. 122 at 2 (explaining that “[c]ounsel has noother briefs, meetings, or any other competing commitmentstomorrow,” such that the final extension provided wouldsuffice). Plaintiff's counsel also violated the Court's orderthat the supplemental briefing was required to be limited tothe specific issues identified therein. See Docket No. 130;but see Docket No. 127 at 1 (“The supplemental briefs mustnot provide argument exceeding the specific issues identifiedabove”). In addition, Plaintiff's counsel plainly casts stonesfrom a glass house in shredding opposing counsel for overlyaggressive conduct, while himself engaging in ad hominemattacks and including heated argument unrelated to the issuesat hand. See, e.g., Docket No. 130 at 2-3; but see, e.g.,Local Rule 1-1(c).5 The Court's patience for such conductis very thin. Plaintiff's counsel must strictly comply with allorders moving forward and must conduct himself with theprofessionalism required. Failure to do so may result in theimposition of sanctions.VI. CONCLUSIONFor the reasons explained above, the Court DENIESDefendants’ motion for sanctions, motion to strike, andmotion to stay. Docket Nos. 99, 100, 103.IT IS SO ORDERED.All CitationsSlip Copy, 2026 WL 266231Footnotes1The parties are familiar with the facts and procedural history, so the Court will not provide an extensivebackground.2Plaintiff's counsel failed to timely oppose the motion. Although the Court has discretion to grant the motion forcase-terminating sanctions as unopposed, see Local Rule 7-2(d), it declines to do so in the circumstances ofthis case, see, e.g., Calzada v. Williamson, 2025 WL 3720262, at *1 n.2 (D. Nev. Dec. 23, 2025) (explaining
Stephen Schaaf, Plaintiff(s), v. Nellis Auction Holdings, LLC, et..., Slip Copy (2026) © 2026 Thomson Reuters. No claim to original U.S. Government Works.3discretionary nature of Local Rule 7-2(d), and declining to grant motion for dismissal sanctions as unopposed).As explained below in Section V, however, the Court is not inclined to offer such leniency moving forward.3“The Court believes that dismissal is particularly appropriate in this case because, as Paul admitted, he usedAI in generating various Complaints, which contain allegations that a District Court must (as a matter oflaw) take as true for purposes of evaluating a motion to dismiss under Rule 12 of the Federal Rules of CivilProcedure. The Court is extremely concerned that underlying factual allegations may have been hallucinatedor unverified as well, especially considering that Paul used AI in drafting the Complaints and could not assurethe Court unequivocally at the hearing that they contain no fabricated allegations.” ByoPlanet, 792 F. Supp.3d at 1356 (emphasis in original).4Although the pending motion is focused almost exclusively on the request for case-dispositive sanctions, italso makes passing reference to an award of attorney's fees. See Docket No. 99 at 10. Defendants havingfailed to provide meaningfully developed argument for that particular request, the Court declines to awardattorney's fees. Cf. Kor Media Group, LLC v. Green, 294 F.R.D. 579, 582 n.3 (D. Nev. 2013).5The overheated rhetoric is not limited to one side. All counsel would be well-advised to turn down thetemperature.End of Document© 2026 Thomson Reuters. No claim to original U.S. Government Works.
ProvenanceKnow exactly where this document came from.Members see the sourcing behind every authority on DocPost — so you can check the record yourself and cite with confidence.Request access