A US appeals court recently overturned a $185 million legal fee award to the law firm Quinn Emanuel Urquhart & Sullivan in the Affordable Care Act case. The three-judge panel of the US Court of Appeals for the Federal Circuit stated that the lower court judge did not provide adequate justification for the award. The judges further noted that the analysis of the fee award was inconsistent with the terms of notices sent to class members in the case.
Quinn Emanuel, a 900-lawyer firm, represented a class of health insurers who sued the US government over the “risk corridor” program. The program was designed to encourage insurers’ participation in health exchanges under the Affordable Care Act. Quinn Emanuel argued that the $185 million award was fair compensation for its work litigating the provision of the federal law.
However, UnitedHealthcare and other class members challenged the award, arguing that a fee award of no greater than $20 million was appropriate in the case. They described the $185 million award as untenable and astronomical.
The Federal Circuit panel ruled that Federal Claims Court Judge Kathryn Davis should have performed a more in-depth analysis of the law firm’s hours and rates in assessing the fee request. The panel stated that the law requires a lodestar cross-check, which was not done in this case. They noted that even if the hours and rates were accepted, the lodestar would only be approximately $10 million, which is a stark contrast to the $185 million proposed by Quinn Emanuel.
The appeals court’s decision is a significant setback for Quinn Emanuel. The firm is now reviewing its options for the next steps in response to the ruling. Derek Shaffer, who defended the fee in arguments before the Federal Circuit, did not immediately respond to a request for comment.
In conclusion, the US appeals court’s ruling on the $185 million legal fee award for Quinn Emanuel in the Affordable Care Act case highlights the importance of providing adequate justification for legal fees. The court’s decision to vacate the award and order a new review could lead to a reduction in compensation for the plaintiff’s attorneys, who secured a $3.7 billion settlement with the US government. The case serves as a reminder that the courts will closely scrutinize legal fee awards to ensure they are fair and consistent with the terms of the case.
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U.S. appeals court tosses $185 million Quinn Emanuel fee award in Obamacare case