In the recent case of Malia LLC v. State Farm, an insurance policyholder sued the insurance company claiming the insurance company wrongfully denied coverage. The insurance company moved for summary judgment. One of the pieces of evidence the insurance company asked the court to consider was a wind verification report generated by a system that “combine[d] proprietary, three-dimensional storm models with artificial intelligence, radar data, and real-world observations to analyze what actually happened.”
Plaintiff sought to exclude this evidence, arguing it was inadmissible hearsay. Under Federal Rule of Evidence 801, “hearsay” is an out of court statement that a party offers into evidence to prove the truth of the matter asserted in the statement.
The court rejected plaintiff’s argument. It observed that the report contained raw data generated by a machine or algorithm. And it went on to note that “the consensus among the circuit courts is that machine-generated data cannot be hearsay because it does not constitute a statement under [Rule 801].” It cited to the case of Lyngaas v. Curaden Ag, 992 F.3d 412 (6th Cir. 2021), which found that summary-report logs of fax transmissions were not hearsay. The Lyngaas case had cited to other similar cases, including one in which a taser report was “merely a report of raw data produced by a machine”.
The case raises a larger, perhaps more interesting question – can a litigant use generative AI to prepare content, and get it admitted into evidence when it otherwise would have been barred by the hearsay rule?
While a strict reading of the holding of Malia LLC and similar cases might lead one to believe so (since these cases actually do say that “machine-generated data cannot be hearsay”), such a conclusion would probably be overly simplistic and potentially misleading. The key distinction lies in whether the content produced by the AI is truly machine-generated in the evidentiary sense – that is, created autonomously by the machine without incorporating a human’s assertion. If a person prompts the AI with factual inputs or narrative claims, then the court would be more likely to determine that the output is merely a stylized or reorganized version of those assertions. In that scenario, the output arguably retains the character of a “statement” under the hearsay rule.
Courts are likely to scrutinize not just the form of the AI output, but the origin of the content and the intent behind its use. If the litigant’s goal in using generative AI is to repackage hearsay in admissible form, the court may well see through the tactic and apply traditional hearsay exclusions. On the other hand, if the AI produces output based solely on internal rules or statistical patterns, without incorporating or restating human assertions, then it may fall outside the definition of hearsay altogether.
In short, while these cases offer a foothold for arguing that certain AI-generated content is not hearsay, the admissibility of such content will ultimately depend on how closely the output is tied to human assertions.
Malia LLC v. State Farm, 2025 WL 1840732 (W.D. Tennessee, July 3, 2025)