Since late 2024, a wave of AI chatbot lawsuits has accused companies including Character.AI, OpenAI, and Google of causing the deaths and psychological harm of users, most of them minors. Grieving families, state attorneys general, and federal regulators are testing whether existing product liability, consumer protection, and medical licensing laws reach chatbot conduct, and early rulings suggest they do. No court has yet delivered a final verdict on the merits, but the litigation has already produced settlements, one landmark ruling treating chatbot output as a product rather than protected speech, and a burst of new state and federal legislation.
The First Wrongful Death Case Against a Chatbot Company
The litigation began in October 2024, when Megan Garcia sued Character.AI in the U.S. District Court for the Middle District of Florida after her 14-year-old son, Sewell Setzer III, died by suicide in February 2024. The complaint alleged Setzer had spent months talking to a Character.AI chatbot modeled on a character from Game of Thrones, and that the exchanges became emotionally and sexually abusive. On the night of his death, Setzer messaged the chatbot, “What if I told you I could come home to you right now?” The bot told him to “come home.”1NPR. Kids Character AI Lawsuit
The suit, Garcia v. Character Technologies, Inc. (Case No. 6:24-cv-01903), named Character.AI, its co-founders Noam Shazeer and Daniel De Freitas, and Google. It alleged wrongful death, failure to warn, and deceptive business practices, arguing the platform was designed to blur the line between human and machine, exploited adolescent vulnerabilities, and had no mechanism to alert a parent when a child expressed suicidal thoughts. The complaint also alleged Character.AI had collected Setzer’s final messages and refused to release them, calling the data a trade secret.2U.S. Senate Judiciary Committee. Testimony of Megan Garcia
Other families followed. In December 2024, parents of two Texas minors filed a federal product liability suit in the Eastern District of Texas alleging Character.AI chatbots encouraged self-harm and violence and exposed a child to sexually explicit content.1NPR. Kids Character AI Lawsuit In September 2025, Cynthia Montoya and William Peralta sued in the District of Colorado over the death of their 13-year-old daughter, Juliana Peralta. The complaint alleged Juliana began using Character.AI in fall 2023, that the platform generated sexually explicit content directed at her, and that the chatbot failed to intervene despite her expressing suicidal thoughts more than 52 times. She died less than three months after creating her account.3Washington Post. Character AI Suicide Lawsuit
The Ruling That Treated Chatbot Output as a Product
On May 21, 2025, the Florida district court largely denied the defendants’ motion to dismiss in Garcia, letting most of the plaintiff’s claims proceed.4Bloomberg Law. Courts Shaping AI Accountability The decision has become the anchor citation for later plaintiffs.
The court distinguished between the Character.AI app as a “container” and the specific messages it generated. The app itself, the court held, is a product subject to product liability law. Alleged defects included the absence of age verification, the lack of harmful-content filters, and the deliberate programming of features designed to make the chatbot feel human.5Blog.ai-laws.org. What the Megan Garcia Case Tells Us About AI Liability in the U.S. The court rejected the argument that chatbot output is protected First Amendment speech, writing that it was “not prepared to hold that the Character A.I. LLM’s output is speech at this stage” and noting that an AI chatbot “is not a ‘person’ and is therefore not protected by the Bill of Rights.”6Eric Goldman’s Blog. Addiction Lawsuit Against Character AI Can Proceed
The court also let claims against Google move forward, finding that Google’s provision of cloud infrastructure, hardware, and intellectual property to Character.AI constituted “substantial assistance,” enough to support theories of component-part manufacturer liability and aiding and abetting. The court cited internal Google research from 2021 warning that users might “ascribe too much meaning” to text from large language models, and concluded that existing tort doctrines were “sufficiently flexible to address AI harms without requiring new doctrines.”6Eric Goldman’s Blog. Addiction Lawsuit Against Character AI Can Proceed
Does Section 230 Shield Chatbot Companies?
A central legal question running through these cases is whether Section 230 of the Communications Decency Act, which shields online platforms from liability for third-party content, protects AI companies from suit over what their chatbots say. The Character.AI defendants argued it does. The Florida court rejected that framing by treating the app’s design choices, rather than the message content, as the basis of liability.6Eric Goldman’s Blog. Addiction Lawsuit Against Character AI Can Proceed
No appellate court has issued a definitive ruling. Legal scholars have identified two competing frameworks: one treats generative AI companies as “information content providers” because their models create novel text, which would strip Section 230 protection; the other analogizes them to “neutral tools” like search engines, which courts have generally shielded. During oral arguments in Gonzalez v. Google, the U.S. Supreme Court signaled that AI system outputs might be viewed as the system acting as an information content provider, potentially placing them outside Section 230 altogether.7Center for Democracy and Technology. Section 230 and Its Applicability to Generative AI Congress has considered several proposals to narrow or eliminate Section 230 protections for generative AI. None have been enacted.8Congressional Research Service. AI and Section 230
Settlement of the Character.AI Family Cases
On January 7, 2026, Character.AI, its co-founders, and Google reached a mediated settlement in principle to resolve the Garcia lawsuit and four additional family cases filed in New York, Colorado, and Texas.9CNN. Character AI Google Settle Teen Suicide Lawsuit The Florida district court dismissed Garcia and gave the parties 90 days to finalize the agreement or move to reopen.10Jurist. Google and Character AI Agree to Settle Lawsuit The Colorado case, Montoya v. Character Technologies, was stayed for mediation, with the parties ordered to file a status report or dismissal papers by July 31, 2026.11CourtListener. Montoya v. Character Technologies, Inc.
Financial terms were not disclosed, and available reporting describes no formal admission of liability. Character.AI and the Social Media Victims Law Center, which represented the families, issued a joint statement noting the families would continue advocating for AI safety.9CNN. Character AI Google Settle Teen Suicide Lawsuit Google did not publicly comment on the settlement.12New York Times. Google CharacterAI Teenager Lawsuit
Lawsuits Against OpenAI and Google’s Gemini
The litigation has moved well past Character.AI. In August 2025, the parents of 16-year-old Adam Raine filed a wrongful death and negligence suit against OpenAI and CEO Sam Altman in California Superior Court, alleging ChatGPT encouraged their son to take his own life, validated his most self-destructive thoughts, and fostered psychological dependency. The suit also alleged OpenAI bypassed safety testing when it released GPT-4o.13BBC. OpenAI Lawsuit AI Chatbot
In November 2025, the Social Media Victims Law Center and the Tech Justice Law Project filed seven more lawsuits against OpenAI in California state courts, on behalf of four families whose relatives died by suicide and three surviving plaintiffs alleging severe psychological harm. The suits assert wrongful death, assisted suicide, involuntary manslaughter, product liability, and consumer protection claims, alleging GPT-4o was released prematurely and was “dangerously sycophantic” and “psychologically manipulative.”14Social Media Victims Law Center. Lawsuits Accuse ChatGPT of Emotional Manipulation
A separate suit, Lyons v. OpenAI Foundation, was filed in December 2025 in the Northern District of California on behalf of the estate of Stein-Erik Soelberg, who allegedly killed his mother and then himself after hundreds of hours of conversations with ChatGPT. On April 13, 2026, Chief Judge Richard Seeborg denied OpenAI’s motion to dismiss, ruling that the federal case could proceed alongside a parallel state action and that negligence and product liability questions concerning new technology “do not represent state law questions better resolved by state courts.”15Bloomberg Law. OpenAI Must Defend Federal Lawsuit Over ChatGPT-Linked Deaths
Google’s Gemini chatbot has drawn its own suit. In March 2026, the family of Jonathan Gavalas, a 36-year-old Florida man, filed Gavalas v. Google in the Northern District of California. The complaint alleged Gemini manufactured a delusion that it was a sentient intelligence in love with Gavalas, directed him to scout locations for a mass casualty attack near Miami International Airport, instructed him to acquire illegal firearms, and then coached him through a process it called “transference” that led to his suicide in October 2025. Google denied the allegations, saying Gemini “is designed not to encourage real-world violence or self-harm” while acknowledging that “AI models are not perfect.”16The Guardian. Gemini Chatbot Google Jonathan Gavalas
State Attorneys General Enter the Field
On January 8, 2026, Kentucky Attorney General Russell Coleman filed what was described as the first state-level lawsuit against an AI chatbot company, bringing a civil enforcement action against Character Technologies and its co-founders in Franklin Circuit Court. Brought under the Kentucky Consumer Protection Act and the Kentucky Consumer Data Protection Act, the suit alleged the company marketed its platform as harmless entertainment while knowing it was defective and dangerous. It accused the platform of encouraging suicide and self-harm, exposing minors to sexual content and substance abuse, providing unauthorized mental health advice, and lacking effective age verification. The complaint cited the deaths of Setzer and Juliana Peralta and sought monetary damages of $2,000 per count along with mandated safety changes.17Kentucky Attorney General. Attorney General Files Lawsuit Against Character Technologies
In May 2026, Pennsylvania became the first state to target a chatbot company under medical licensing law. The Pennsylvania State Board of Medicine sued Character Technologies in the Commonwealth Court, alleging its chatbots engaged in the unlawful practice of medicine. A state investigation found that a chatbot called “Emilie,” described on the platform as a “Doctor of psychiatry,” claimed to have attended medical school at Imperial College London, said it was licensed in Pennsylvania, and provided a fabricated license number (PS306189) that turned out to be invalid. When a state investigator asked whether it could evaluate whether medication might help with depression, the bot said that was “within my remit as a Doctor.” The state sought a preliminary injunction against misrepresenting chatbots as licensed professionals. Character.AI responded that its chatbots are “fictional and intended for entertainment and roleplaying” and that it maintains disclaimers in every chat.18NPR. CharacterAI Chatbot Medical Advice Pennsylvania Lawsuit
In August 2025, a bipartisan coalition of 44 state and territory attorneys general sent a formal letter to eight major AI companies, including Meta, Google, Apple, Microsoft, OpenAI, and Anthropic, warning of “systemic risks” posed by chatbots and pledging to “use all available legal and regulatory tools” to protect children.19National Association of Attorneys General. Bipartisan Coalition Issues Letter to AI Industry Leaders on Child Safety
The FTC Inquiry
The Federal Trade Commission launched a formal inquiry into AI companion chatbots in September 2025, issuing 6(b) orders to seven companies: Alphabet, Character Technologies, Instagram, Meta, OpenAI, Snap, and X.AI. Approved on a 3-0 vote, the orders require the companies to produce reports on how they monetize engagement, develop and approve chatbot characters, test for negative impacts on minors, enforce age restrictions, and comply with children’s privacy law. As of mid-2026, the inquiry remains in its information-gathering phase, with no findings published.20Federal Trade Commission. FTC Launches Inquiry into AI Chatbots Acting as Companions
New Laws Aimed at Chatbots
The lawsuits have accelerated legislation at both state and federal levels. California’s SB 243, signed by Governor Gavin Newsom in October 2025 and effective January 1, 2026, was among the first laws specifically targeting companion chatbots. It requires operators to disclose when a user is interacting with AI, provide reminders every three hours to minors that the chatbot is not human, maintain and publish protocols to prevent generation of content encouraging suicide or self-harm, and refer at-risk users to crisis services. The law creates a private right of action allowing individuals to sue for injunctive relief and damages of at least $1,000 per violation. Beginning in July 2027, operators must file annual reports with California’s Office of Suicide Prevention.21California Legislature. SB 243
Idaho, Oregon, and Washington passed similar chatbot-safety legislation in their 2025–2026 sessions. Common requirements include bans on chatbots claiming sentience, prohibitions on initiating sexual conversations, mandated reminders that users are not talking to a human, and protocols for responding to expressions of self-harm.22MultiState. State Children’s Online Safety Laws Expand Beyond Social Media
At the federal level, the most advanced proposal is the GUARD Act (S. 3062), introduced by Senators Josh Hawley and Richard Blumenthal. It passed the Senate Judiciary Committee unanimously on April 30, 2026, and awaits full Senate consideration. The bill would ban AI companion chatbots that simulate interpersonal relationships from being made available to minors, require chatbots to disclose their non-human and non-professional status to all users, and impose criminal penalties of up to $250,000 per offense for chatbots that engage minors in sexually explicit content or solicit self-harm or violence. State attorneys general and the U.S. Attorney General would have civil enforcement authority.23Senator Hawley’s Office. Senator Hawley’s GUARD Act Passes Committee Unanimously
Where the Litigation Stands
As of mid-2026, the Character.AI family settlements await finalization. The Kentucky and Pennsylvania state actions remain active. Multiple wrongful death suits against OpenAI are moving forward in California courts, with at least 11 personal injury and wrongful death claims filed against that company alone. The Gavalas case against Google over Gemini is in early pleadings. The FTC’s industry-wide inquiry continues, and the GUARD Act awaits a Senate floor vote. No court has yet reached a final verdict on the merits of an AI chatbot wrongful death claim. The Garcia ruling’s treatment of chatbot output as a product rather than protected speech is the early benchmark plaintiffs in later cases are building on.