Flux Drive challenges AI-assisted legal fees; Tenth Circuit upholds the award.
Flux Drive challenged fees for AI-assisted legal work. The Tenth Circuit found no showing of excessive billing and upheld two awards, while saying research tools may reduce hours in some cases.
Case period:
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Overview
Flux Drive and its co-plaintiffs argued that defense counsel's use of AI and online research tools should have reduced the hours billed in a trade-secret lawsuit. On October 30, 2026, the Tenth Circuit rejected that challenge because the plaintiffs had not shown the hours actually worked were unreasonable. The opinion notes that lawyers must still verify legal authorities.
The court affirmed an initial $114,663.11 fee award and a separate $68,990.50 supplemental award. Its AI holding addresses the hours counsel actually expended, on the billing records in this case.
Read the full background
The fee appeals followed dismissal of the Rong defendants for lack of personal jurisdiction in Colorado. The published opinion (opens in a new tab) treats the dismissal and two fee awards as three consolidated appeals.
Timeline
4 timeline entries on this page. Dates: December 10, 2025 to October 30, 2026
December 2025
District court awards $114,663.11 in initial fees.
The court adopts the magistrate judge's recommendation for the initial attorneys' fee award.
[01]Flux Drive v. Sparks: consolidated appellate opinion
The court recounts the parties' fee arguments and affirms both fee awards. Its AI analysis concerns the reasonableness of actual hours on this record.
Flux Drive v. Sparks: consolidated appellate opinionNos. 25-1308, 26-1013 and 26-1292; pp. 8-9 and 34-38
January 2026
Plaintiffs appeal the initial fee award.
The appellate opinion records the plaintiffs' January 9 appeal of the initial fee award. It later addresses the AI argument in their appellate submissions.
[01]Flux Drive v. Sparks: consolidated appellate opinion
The court recounts the parties' fee arguments and affirms both fee awards. Its AI analysis concerns the reasonableness of actual hours on this record.
Flux Drive v. Sparks: consolidated appellate opinionNos. 25-1308, 26-1013 and 26-1292; pp. 8-9 and 34-38
July 2026
District court adds $68,990.50 in supplemental fees.
The court adopts the supplemental recommendation after exclusion of a requested 2.5 percent administrative fee.
[01]Flux Drive v. Sparks: consolidated appellate opinion
The court recounts the parties' fee arguments and affirms both fee awards. Its AI analysis concerns the reasonableness of actual hours on this record.
Flux Drive v. Sparks: consolidated appellate opinionNos. 25-1308, 26-1013 and 26-1292; pp. 8-9 and 34-38
October 2026
Tenth Circuit affirms dismissal and both fee awards.
The court rejects the fee challenges, including the contention that counsel's AI use made the actual recorded hours unreasonable.
[01]Flux Drive v. Sparks: consolidated appellate opinion
The court recounts the parties' fee arguments and affirms both fee awards. Its AI analysis concerns the reasonableness of actual hours on this record.
Flux Drive v. Sparks: consolidated appellate opinionNos. 25-1308, 26-1013 and 26-1292; pp. 8-9 and 34-38
Arguments
Documented position
Flux Drive and its co-plaintiffs' appellate position, recorded on pages 35-36 of the October 30 opinion.
AI use should have reduced the billed hours.
The plaintiffs argue that defense counsel should have billed fewer hours because they used AI and online research tools. They also challenge serial billing and partner time on ministerial tasks.
Limit of this argument
The court held that the plaintiffs identified no evidence that AI use made the hours actually expended unreasonable.
Read sources
Sources
- Flux Drive v. Sparks: consolidated appellate opinionNos. 25-1308, 26-1013 and 26-1292; pp. 8-9 and 34-38
Documented position
The Rong defendants' fee motion, supported by an affidavit and detailed hourly accounting, described on page 8 of the opinion.
The fee request was supported by recorded work.
The Rong defendants sought fees supported by an affidavit and detailed hourly accounting. Their request sought compensation for the work recorded by counsel.
Limit of this argument
The magistrate judge found the hours and rates reasonable. In affirming, the appellate court acknowledged that research tools can reduce necessary hours in some cases. Those findings are the courts' reasoning.
Read sources
Sources
- Flux Drive v. Sparks: consolidated appellate opinionNos. 25-1308, 26-1013 and 26-1292; pp. 8-9 and 34-38
Sources
(1)
Original text
Flux Drive v. Sparks: consolidated appellate opinion
Relevant passage: Nos. 25-1308, 26-1013 and 26-1292; pp. 8-9 and 34-38
About this source
The court recounts the parties' fee arguments and affirms both fee awards. Its AI analysis concerns the reasonableness of actual hours on this record.
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- Flux Drive challenges AI-assisted legal fees; Tenth Circuit upholds the award.
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The Dispute Index. "Flux Drive challenges AI-assisted legal fees; Tenth Circuit upholds the award.". First published: 2026-11-03. Last updated: 2026-11-03. https://disputeindex.com/cases/flux-drive-ai-assisted-legal-fees-tenth-circuit