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Quinn Emanuel Wins $185 Million Fee Fight in Obamacare Case (1)

Sept. 16, 2021, 9:52 PMUpdated: Sept. 16, 2021, 11:03 PM

A federal judge on Thursday approved a request by lawyers at Quinn Emanuel Urquhart & Sullivan to be paid nearly $185 million for work on a pair of class-action lawsuits that led the U.S. government to pay health insurers more than $3.7 billion.

The fee represents 5% of the total amount that lawyers recovered for a group of health insurers that the U.S. Supreme Court ruled were due billions after the federal government failed to live up to its promise in an Obamacare program known as “risk corridors.”

The Affordable Care Act’s “risk corridor” section obligated the government to pay health insurers in exchange for selling plans at affordable premiums to a group of people who previously would have been denied coverage or charged more, the Supreme Court said in an April 2020 decision.

In total, the federal government was ordered to pay about $12 billion under the program to make up for losses they incurred by offering coverage to sicker, uninsured people.

“We are proud of the $4 billion in value we created for class members. We believed our fee request was reasonable, and the court has validated that belief,” Steve Swedlow, a Quinn Emanuel partner who represented the health insurers, said in a statement.

Quinn Emanuel’s fee request was granted over objections lodged by 34 class members who argued the Quinn Emanuel lawyers should have been paid much less: $8.8 million.

Their objections focused on the fact that the class actions were put on pause while a separate case wound its way up to the Supreme Court.

Quinn Emanuel’s lawyers worked nearly 10,000 hours on the case, meaning their average hourly rate would be valued around $18,500.

In calling the 5% fee request reasonable, Judge Kathryn Davis pointed to Quinn Emanuel’s foresight bringing the case “several months” before other lawyers brought similar claims on behalf of other insurers.

She said the Quinn Emanuel lawyers could not control that their case was put on pause, and highlighted the risks involved in advancing a challenging legal claim. She also said clients commonly agree to pay their lawyers far more than 5% in contingency fee cases. The objectors sought to pay “an infinitesimal portion” of their award in legal fees, she wrote.

“There is little reason for the Court to step in to protect the interests of sophisticated entities who made a considered decision to join these cases and, as a result, will enjoy—even at the max rate of [5%]—considerably lower costs than if they pursued their claims individually,” Davis wrote.

The case is Health Republic Insurance Company v. USA, Fed. Cl., 16 00259, Order 9/16/21.

(Adds detail from judge's order.)

To contact the reporter on this story: Roy Strom in Chicago at rstrom@bloomberglaw.com

To contact the editor responsible for this story: Chris Opfer at copfer@bloomberglaw.com

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