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Quinn Emanuel represented a class of healthcare insurers in an Affordable Care Act case against the federal government, and secured a $3.7 billion settlement. For their efforts — and the risk associated with taking on the contingency case — the trial court awarded them $185 million in legal fees.
Partner Derek Shaffer had to appear before the U.S. Court of Appeals for the Federal Circuit to defend the large size of the award against the complaints of class objectors. And as reported by Reuters, it did not appear to go particularly well:
During argument, the appeals court appeared concerned by what appeared to be the Federal Claims judge not performing a “lodestar cross-check,” which involves a review of hourly rates and the number of hours worked on a case. “You put the world on notice. There will be a lodestar cross-check. She didn’t do it,” Chief Judge Kimberly Moore told Shaffer.
The class objectors, represented at oral argument by Sheppard Mullin, suggested attorneys fees of $8.8 million. That must be one hell of a lodestar cross-check if the proper amount of fees is a mere 4.8 percent of the award! Biglaw elites may look down their noses at plaintiffs’ work — particularly of the contingency variety — but society needs these suits. As Judge Posner famously described “the realistic alternative to a class action is not 17 million individual suits, but zero individual suits.” Everyone waits to object after the case is all nice and settled, but as Shaffer indicated during argument, Quinn Emanuel took on a real risk of NEVER getting compensated, noting the government “is not a defendant who is likely to settle — this is not a defendant who fears being subjected” to a large penalty.
And having that much cash on the line apparently made Shaffer a little testy. And Judge Moore was quick to point it out:
“Counsel, I’m trying to … figure out to myself why you’re … pointing your finger at us and sort of yelling at the court,” Moore remarked. She added: “It’s your money. If I had $187 [sic] million on the line, I’d probably lose my cool a little bit, too — so go for it.”
Shaffer did apologize but Judge Moore is not wrong — well over a hundred million dollars is a lot to get angry over.
Kathryn Rubino is a Senior Editor at Above the Law, host of The Jabot podcast, and co-host of Thinking Like A Lawyer. AtL tipsters are the best, so please connect with her. Feel free to email her with any tips, questions, or comments and follow her on Twitter (@Kathryn1).
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