When faculty suspect generative AI misuse, the legal classification of the case—grading issue versus academic misconduct—can determine whether institutions survive potential litigation. The report describes escalating disputes tied to AI-detection tools and procedural fairness. It cites a University of Minnesota expulsion case involving a Ph.D. student whose remote qualifying exam was compared to ChatGPT output; appellate courts upheld the sanction, emphasizing the university’s notice and hearing process. It also reviews Matter of Newby v. Adelphi University, where a New York court annulled an AI-related writing violation finding and ordered expungement after the student’s appeal process was described as inconsequential. The piece argues institutions need more coherent frameworks to document evidence, ensure due process, and reduce exposure to repeat lawsuits.