Quinn Emanuel’s $185 Million Fee Mostly Insured as Fight Goes On

Quinn Emanuel Urquhart & Sullivan insured about 90% of a $185 million legal fee that the law firm is still fighting over with some of its clients, according to court documents filed Monday.

The firm’s insurance policy covers nearly $167 million of the fee, awarded in lawsuits by major health insurers against the U.S. government. The fee, which followed a nearly $4 billion win for the health insurers, has been challenged by some of the companies in an appeal.

The policies shed more light on what’s at stake for the law firm in an intense fight over the fee and quantify the potential losses for a relatively young judgment preservation insurance market that’s usually entirely private. Experts have said big, early losses on these types of policies could cause their prices to increase.

The existence of Quinn’s insurance policy became public during the fee fight. Some of Quinn Emanuel’s clients argue that the firm should be forced to take a drastic haircut on the nine-figure award and return the rest of the money to the companies.

The firm has been pursuing the nine-figure legal fee since 2020, after the Supreme Court ruled that the federal government must pay health insurers roughly $12 billion under the ACA’s “risk corridor” provisions. Quinn Emanuel’s clients collected roughly a quarter of that award.

Documents previously made public showed Quinn Emanuel had obtained a $25 million primary insurance policy after winning the fee. The documents also referenced other “excess” policies, which led to speculation the firm had insured only a small portion of the award.

The Monday court filing shows the primary and excess policies amount to $166.85 million in total. Other details of the policy, such as how much the firm paid for the policy or who insured it, remain confidential.

In effect, the policies mean Quinn Emanuel will keep the vast majority of the fee regardless of the court’s ultimate ruling. The health insurers opposing the fee have said the policies preclude the firm from seeking “a reasonable fee” from the court or else risk violating the policies.

The policies require Quinn Emanuel to litigate the case as if no insurance was in place. The objecting insurers have argued Quinn Emanuel didn’t seek a “reasonable fee” after the appeal at least in part because the policies could be voided if the firm was found to not be “vigorously prosecuting” the award.

A federal appeals court last year ruled that the $185 million fee must be reconsidered, subject to what’s known as a “lodestar” analysis, which compares the fee to the amount of work done by the lawyers in the case.

Lawyers for the health insurers objecting to the fee said this month Quinn Emanuel should be paid between $12 and $23 million in the case. Despite the insurance policy, Quinn Emanuel has argued it should receive the full $185 million, which represents 5% of the total damages its clients received.

The case is Health Republic Insurance Co. v. The United States, Ct. Cl., 16 259, 3/18/24.