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

homesafetytechpros — Sun, 20 Oct 2024 23:51:45 +0000

Law Firms

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

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. (Image from Shutterstock)

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.

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Nixon Peabody sues law firm for allegedly luring away its clients without cut of contingency fee

homesafetytechpros — Mon, 14 Oct 2024 16:56:38 +0000

Law Firms

Nixon Peabody sues law firm for allegedly luring away its clients without cut of contingency fee

By Debra Cassens Weiss

October 10, 2024, 3:26 pm CDT

Nixon Peabody has filed a lawsuit alleging that its clients were improperly lured away by personal injury law firm Shaheen & Gordon through use of “scare tactics” and false promises. (Image from Shutterstock)

Updated: Nixon Peabody has filed a lawsuit alleging that its clients were improperly lured away by personal injury law firm Shaheen & Gordon through use of “scare tactics” and false promises.

Nixon Peabody filed the suit with its co-counsel Rilee & Associates, Law.com reports.

The two firms allege that Shaheen & Gordon “improperly enticed” their clients to switch firms before submitting their claims to a settlement fund, according to Law.com. The clients were survivors of abuse at the Sununu Youth Services Center.

Thirty-five clients jumped to Shaheen & Gordon between February 2023 and June, the suit says.

Nixon Peabody and Rilee & Associates say they spent thousands of hours representing victims and setting up a settlement fund with state legislators. Their original fee agreement called for attorney fees amounting to 40% of gross recoveries along with costs. The two firms say they have been cut out of Shaheen & Gordon’s client recoveries.

Shaheen & Gordon allegedly told survivors that the firm could obtain the highest damages award to which they are entitled by submitting their claims to the settlement fund, according to Law.com’s description of the suit allegations. That is not necessarily the case, the suit says.

Shaheen & Gordon gave this statement to the ABA Journal: “Shaheen & Gordon has reviewed the complaint and denies the allegations. Clients are not the property of their lawyers, and they are free to hire counsel of their own choosing. Shaheen & Gordon has attempted to cooperate with Nixon Peabody but has not received any specific demands or proposals. We are truly surprised by this lawsuit and do not intend to litigate it in the press.”

Updated Oct. 10 at 4:02 p.m. to add the statement by Shaheen & Gordon.

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Use of ChatGPT to support fee bid is ‘utterly and unusually unpersuasive,’ federal judge says

homesafetytechpros — Fri, 01 Mar 2024 14:31:04 +0000

Technology

Use of ChatGPT to support fee bid is ‘utterly and unusually unpersuasive,’ federal judge says

By Debra Cassens Weiss

February 27, 2024, 8:20 am CST

A federal judge in New York City has reduced a law firm’s fee request by about half after criticizing its use of the artificial intelligence tool ChatGPT-4 as a “cross-check” to determine prevailing market rates for attorneys. (Image from Shutterstock)

U.S. District Judge Paul A. Engelmayer of the Southern District of New York said in a Feb. 22 opinion the Cuddy Law Firm’s use of ChatGPT-4 to reinforce its fee bid is “utterly and unusually unpersuasive,” report Reuters and Law360.

The Cuddy Law Firm had sought $113,484 in fees plus interest. Engelmayer granted feels of $53,050 plus interest.

The proper reference, Engelmayer said, would be the rate paid to comparable lawyers in special education law in the Southern District of New York. The Cuddy Law Firm had represented a child seeking a free appropriate education based on his disabilities, which included disorders relating to language, hyperactivity, attention deficit and stress.

The firm had sought hourly fees of $550 to $600 for senior lawyers, $425 for midlevel associates and $375 for junior associates.

“These hourly rates exceed those awarded in this district, for attorneys of comparable experience, and indeed for some of these very attorneys,” Engelmayer said.

Engelmayer said the firm had cited ChatGPT-4 sources as a “cross-check” to support “problematic sources” regarding hourly billing rates that aren’t specific to lawyers in special education litigation.

“As the firm should have appreciated, treating ChatGPT’s conclusions as a useful gauge of the reasonable billing rate for the work of a lawyer with a particular background carrying out a bespoke assignment for a client in a niche practice area was misbegotten at the jump,” Engelmayer wrote.

Engelmayer cited recent cases in which ChatGPT generated fake case citations.

“In claiming here that ChatGPT supports the fee award it urges, the Cuddy Law Firm does not identify the inputs on which ChatGPT relied. It does not reveal whether any of these were similarly imaginary. It does not reveal whether ChatGPT anywhere considered a very real and relevant data point: the uniform bloc of precedent … in which courts in this district and circuit have rejected as excessive the billing rates the Cuddy Law Firm urges for its timekeepers.

“The court therefore rejects out of hand ChatGPT’s conclusions as to the appropriate billing rates here. Barring a paradigm shift in the reliability of this tool, the Cuddy Law Firm is well advised to excise references to ChatGPT from future fee applications.”

Benjamin Kopp of the Cuddy Law Firm told Reuters that he queried ChatGPT-4 about the rates that clients might expect to be charged by attorneys and questions that clients might ask to determine how rates and fees would be affected by various factors in a case.

He addressed that issue in an August 2023 declaration.

“The underlying assertion was not about ChatGPT’s correctness on rates, but rather, what parents would expect as consumers,” Kopp told Reuters in an email.

The Cuddy Law Firm had sought $113,484 in fees plus interest. Engelmayer granted feels of $53,050 plus interest.

The firm had sought hourly fees of $550 to $600 for senior lawyers, $425 for midlevel associates and $375 for junior associates.

“These hourly rates exceed those awarded in this district, for attorneys of comparable experience, and indeed for some of these very attorneys,” Engelmayer said.

Engelmayer cited recent cases in which ChatGPT generated fake case citations.

He addressed that issue in an August 2023 declaration.

“The underlying assertion was not about ChatGPT’s correctness on rates, but rather, what parents would expect as consumers,” Kopp told Reuters in an email.

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