Character.AI lawsuits: the cases, the rulings and where they stand

The short answer

Yes, Character.AI has been sued. As of October 22, 2026, AI Lawsuit Tracker (last updated October 19, 2026) lists seven private lawsuits against Character Technologies in federal courts, filed from October 2024 to August 2026. The claims include wrongful death, product liability, negligence and deceptive trade practices. These are allegations; none of the court records we read contains a finding that the company is liable.

In the first case, Garcia v. Character Technologies, a federal judge in May 2025 let most claims proceed past a motion to dismiss. In January 2026, the parties in Garcia told the court they had agreed to a mediated settlement in principle, and the parties in two Colorado cases told their courts they had reached agreements in principle to resolve those suits.

Government actions include a suit by Kentucky's attorney general, a petition by Pennsylvania's State Board of Medicine, a Texas attorney general investigation and FTC information orders. On October 12, 2026, the company said it had started a Chapter 11 case to sell the business; how that case affects each suit is a legal question the courts decide.

Government actions

These are allegations, inquiries and filings, not findings.

• Kentucky: Commonwealth ex rel. Coleman v. Character Technologies, Inc., No. 26-CI-00029, Franklin Circuit Court, filed January 8, 2026 against the company and its co-founders. The attorney general alleges violations of the Kentucky Consumer Protection Act and the Kentucky Consumer Data Protection Act, among other laws, including that the platform lacks meaningful age verification. Kentucky asks for court-ordered changes to the company's practices and money damages.
• Pennsylvania: Commonwealth of Pennsylvania, Department of State, State Board of Medicine v. Character Technologies, Inc., No. 220 MD 2026, Commonwealth Court of Pennsylvania, filed May 1, 2026 and announced by the governor's office May 5. The board alleges a character on the platform described as a psychiatrist held itself out as licensed in Pennsylvania, which the board says is unauthorized practice of medicine under the Medical Practice Act. It asks the court to order the company to stop.
• Texas: the attorney general announced on August 18, 2025 an investigation of Meta AI Studio and Character.AI, with civil investigative demands, under the state's consumer protection laws. The release says the platforms may be presented as mental health tools without medical credentials, and that the probe builds on an earlier investigation of Character.AI under the SCOPE Act. No outcome has been announced.
• FTC: on September 11, 2025, the FTC voted 3-0 to send orders under Section 6(b) of the FTC Act to seven companies, including Character Technologies. The orders seek information on how the companies test and monitor harms, limit children's and teens' use, enforce age limits and use chat data. The FTC describes 6(b) orders as a study power without a specific law enforcement purpose.
• Bankruptcy filing: on October 14, 2026, New York's attorney general and 39 other attorneys general filed a notice in the company's Chapter 11 case. They ask that any sale protect children and consumers, including age checks beyond self-reported birth dates and removal of chatbots that claim to be licensed professionals. The notice says the states investigated the company but could not reach agreement on terms before the bankruptcy filing. Florida joined the notice on October 20, 2026.

Private lawsuits

These are the private suits listed by AI Lawsuit Tracker, a sister site from the same publisher, as of October 19, 2026. Captions are shortened. Each complaint's claims are allegations. Statuses come from court records where we could read them, and otherwise are as listed by AI Lawsuit Tracker.

• Garcia v. Character Technologies, Inc., No. 6:24-cv-01903 (M.D. Fla.), filed October 22, 2024. Defendants include Character Technologies, its two co-founders and Google LLC. The claims include wrongful death, product liability and failure to warn, negligence, unjust enrichment and violation of Florida's Deceptive and Unfair Trade Practices Act, plus aiding and abetting against Google. On January 7, 2026, the parties jointly filed a notice that they had agreed to a mediated settlement in principle and asked the court to stay the case. AI Lawsuit Tracker lists the case as terminated that day.
• A.F. v. Character Technologies, Inc., No. 2:24-cv-01014 (E.D. Tex.), filed December 9, 2024 against the company, its co-founders, Google LLC and Alphabet. The court docket lists claims of strict liability, negligence and violations of the Texas Deceptive Trade Practices Act. AI Lawsuit Tracker lists the federal case as stayed.
• Montoya v. Character Technologies, Inc., No. 1:25-cv-02907 (D. Colo.), filed September 15, 2025 against the company, its co-founders, Google LLC and Alphabet; the docket lists it as a product liability case. The court stayed the case on January 7, 2026 at the parties' joint request. In an April 2, 2026 joint status report, the parties said they had reached an agreement in principle to resolve the suit and were finalizing the terms.
• E.S. v. Character Technologies, Inc., No. 1:25-cv-02906 (D. Colo.), filed September 15, 2025 against the same defendants. The complaint's claims include strict product liability, negligence, unjust enrichment, fraudulent concealment and misrepresentation, a Children's Online Privacy Protection Act claim and a Colorado Consumer Protection Act claim. In a January 6, 2026 joint motion, the parties said they had an agreement in principle to resolve the case and asked for a stay.
• P.J. v. Character Technologies, Inc., No. 1:25-cv-01295 (N.D.N.Y.), filed in September 2025. AI Lawsuit Tracker lists the case as stayed since January 13, 2026.
• D.W. v. Character Technologies, Inc., No. 2:25-cv-00824 (E.D. Va.), filed in December 2025. AI Lawsuit Tracker lists the case as dismissed on April 14, 2026 for failure to serve the complaint.
• A.D. v. Character Technologies, Inc., No. 3:26-cv-08400 (N.D. Cal.), filed August 13, 2026. AI Lawsuit Tracker lists the case as active.

A settlement in principle is an agreement to settle that the parties are still putting in final form. We found no court record or company statement giving the terms of any of these settlements.

Key rulings so far

The main ruling is the order on the motions to dismiss in Garcia, dated May 20, 2025 and filed May 21, 2025 (Doc. 115). It decided only whether the complaint's allegations were enough to go forward, not whether they are true.

• The court granted the motions to dismiss in part and denied them in part. It dismissed the claim for intentional infliction of emotional distress without leave to amend and let the remaining claims proceed.
• On the First Amendment, the court said it was not prepared to hold, at that stage, that Character.AI's output is speech.
• The court held that Character.AI is a product for the purposes of the product liability claims, to the extent they arise from alleged design defects rather than from ideas or expression.
• The court found the complaint adequately alleged claims against Google as a component part manufacturer and for aiding and abetting.
• The co-founders' motions to dismiss for lack of personal jurisdiction were denied without prejudice, with leave to refile within 90 days after jurisdictional discovery. The claims against Alphabet were dismissed without prejudice at the plaintiff's request.

How the bankruptcy affects the cases

Character.AI's blog says the company started a voluntary Chapter 11 case to run a court-supervised sale. The case is in the U.S. Bankruptcy Court for the District of Delaware, No. 26-11603-BLS.

Under the Bankruptcy Code, filing a petition generally stays the continuation of court proceedings against the debtor that began before the case (11 U.S.C. 362(a)(1)). That paragraph's text refers to proceedings against the debtor; whether the stay reaches other defendants, such as Google or the co-founders, is a question for the courts.

Section 362(b)(4) excepts actions by a governmental unit to enforce its police and regulatory power, including enforcing a judgment other than a money judgment. Whether that exception covers the Kentucky or Pennsylvania actions is a legal question for the courts.

In their October 14, 2026 notice, the attorneys general reserved the right to bring police and regulatory actions against the company, to object to a sale or plan, and to ask for a consumer privacy ombudsman.

As of October 22, 2026, we could not confirm from the bankruptcy docket whether the company has asked the court to extend the stay to co-defendants, or whether the court has ruled on how the stay applies to any of these cases.

What Character.AI has said and changed

On October 22, 2024, Character.AI's blog announced changes including a revised disclaimer on chats that the AI is not a real person, changes to its models for under-18 users and a notice after an hour-long session. The post also says the company had recently added a pop-up that points users to the National Suicide Prevention Lifeline when certain phrases appear. The post does not mention the lawsuit.

In a November 21, 2025 post, Character.AI's blog said it would begin removing open-ended chat for U.S. users under 18 starting November 24, 2025, with other markets to follow, and that it had begun rolling out age assurance technology in the U.S. It cites input from safety partners and outside experts.

In its October 12, 2026 bankruptcy post, the company refers to significant legal, regulatory and operational headwinds over the past year. It says the platform is still running, and that it will be wound down if no bid emerges that keeps it operating.

Laws that may apply

The government actions rely on existing state laws: Kentucky's Consumer Protection Act and Consumer Data Protection Act, Pennsylvania's Medical Practice Act, and Texas consumer protection law and its SCOPE Act. Newer laws aimed at companion chatbots include:

• California SB 243 (Bus. & Prof. Code sections 22601-22606), signed October 13, 2025, took effect January 1, 2026. It requires operators of companion chatbot platforms to give a clear notice that the chatbot is AI when a reasonable person could think it is human, and bars them from letting a companion chatbot engage with users unless they maintain a protocol to prevent suicidal ideation, suicide or self-harm content that includes referrals to crisis services. A 2026 law, SB 1119, removes its duties toward known minors from January 1, 2027.
• New York General Business Law section 1701, part of the state's AI companion law that took effect November 5, 2025, makes it unlawful to provide an AI companion without a protocol that makes reasonable efforts to detect suicidal ideation or self-harm and refers users to crisis services, such as the 988 hotline.

We are not saying Character.AI is covered by, or out of compliance with, any of these laws. It may have practices it has not published, and whether a law applies to it is a legal question this guide does not decide.