Quinn Emanuel's fees halved for $3.7B win for insurers

A federal judge has slashed attorney fees for Quinn Emanuel Urquhart & Sullivan LLP in half, from $185 million to $92.4 million, for prevailing in a lawsuit for a class of insurers that sued the Obama administration for failing to meet its obligations under the Affordable Care Act.

Judge Kathryn C. Davis of the U.S. Court of Federal Claims ruled Thursday that Quinn Emanuel's billed hours "are improperly inflated and must be reduced." Health Republic Insurance Co. et al. v. U.S., 16-CV-00259 (Court of Federal Claims, filed Feb. 24, 2016).

The law firm scored a major victory for the health insurers in two class actions, getting $3.7 billion in damages for insurers seeking Obamacare repayments. But several of the insurers, including United Healthcare Group Inc. and Kaiser Foundation Health Plan Inc., argued that Quinn Emanuel's proposed fees were excessive.

Mohammad Keshavarzi, a Los Angeles partner with Sheppard, Mullin, Richter & Hampton LLP, persuaded a U.S. Court of Appeals for the Federal Circuit panel to vacate the fee award and remand the case to the Court of Federal Claims.

The $185 million award represented a lodestar multiplier of 18 to 19, which Federal Circuit Judge Richard G. Taranto characterized as "huge."

On remand, however, Quinn Emanuel sought the same amount of attorney fees.

"In brief, the benefit the class received from Class Counsel's work was uniquely favorable, and Class Counsel undertook extraordinary risks and costs to obtain this result on claims it pioneered, all while capping its fee at a percentage below any other offered for the exact same claims," Quinn Emanuel partner Adam B. Wolfson of Los Angeles wrote.

Keshavarzi objected, arguing that Quinn Emanuel was ignoring the appellate court's instructions. "Despite this clear direction, Class Counsel's Second Petition again fails to justify its lodestar and again seeks to avoid a lodestar cross-check," he wrote. "It instead asks the Court to rubberstamp the same $185 million award."

He asked that Quinn Emanuel only get attorney fees ranging from $11.77 million to $23.14 million.

Davis roughly split the difference, reducing Quinn Emanuel's attorney fees from 5% to 2.5%.

She wrote, "The 19.12 implicit multiplier is outside the relevant norm, and that a multiplier of no higher than 9.56 is justified under the circumstances of these cases." A fee award of $92.4 million is "reasonable and does not result in a windfall for Class Counsel," the judge added.

That's quite a bit more than the multiplier range of 1 to 4 that Keshavarzi believed was justified but a lot less than Quinn Emanuel's request.

It is not clear if either side will appeal Davis' attorney fee award to the Federal Circuit again.

Wolfson and other Quinn Emanuel attorneys could not be reached for comment Friday, and Sheppard Mullin senior communications manager Jill E. Schachner wrote in an email that none of the firm's attorneys would comment.