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Judge cuts Quinn Emanuel’s $185M fee, an amount deemed ‘astronomical’ by objectors

By Debra Cassens Weiss

October 14, 2024, 1:12 pm CDT

A federal judge has slashed a $185 million fee that she initially awarded to Quinn Emanuel Urquhart & Sullivan, an amount that translated to about $18,500 per hour for its work in an insurance class action lawsuit.

U.S. Court of Federal Claims Judge Kathryn C. Davis had initially awarded Quinn Emanuel 5% of a $3.7 billion judgment for about 10,000 hours of work. In an Oct. 10 opinion, she reduced the law firm’s claimed hours by 15% and reduced the award to 2.5% of the recovery, amounting to $92.4 million.

Davis reduced the award after the U.S. Court of Appeals for the Federal Circuit said she failed to properly conduct a “lodestar cross-check.” The cross-check considers hours worked, billing rates and a risk multiplier to compensate for the risk of no or reduced recovery.

Reuters and Law360 have stories.

Quinn Emanuel sought the attorney fee for suing on behalf of two classes of health insurers in litigation under the Affordable Care Act. The insurers said the federal government did not abide by its promise to pay them for losses incurred for the first three years of participation in the law’s insurance marketplace.

Health insurers who opposed the fee amount said it was “astronomical,” according to Reuters. They said Davis should award between $11.77 million and $23.14 million.

Davis said the amount requested by objecting insurers was “so low as to disincentivize attorneys from pursuing class actions.” She said Quinn Emanuel “pioneered” a “novel, winning legal theory” based on “an untested argument.”

After Quinn Emanuel sued, copycat suits followed. They led the U.S. Supreme Court to affirm Quinn Emanuel’s theory, Davis said. The novelty and complexity of Quinn Emanuel’s claim, along with the risk of nonpayment if the litigation didn’t succeed, justify a multiplier of 9.56, Davis said.

The multiplier is calculated by multiplying a firm’s hours by their rates. Davis used the reduced hours and Quinn Emanuel’s 2020 rates to calculate the multiplier.

Quinn Emanuel had obtained “judgment preservation insurance” on nearly $167 million of the $185 million fee award, Bloomberg Law reported in March. Typically, judgment preservation insurance is used to preserve a portion of large awards from being overturned on appeal.

The case is Health Republic Insurance Co. v. United States.