Court Opinion

ID: 4911692
Source: CourtListenerOpinion
Date Created: 2021-09-17 13:01:53.907161+00
Date Added: 2024-06-11T08:13:34.508322
License: Public Domain

IN THE UNITED STATES COURT OF FEDERAL CLAIMS
___________________________________
                                    )
HEALTH REPUBLIC INSURANCE           )
COMPANY,                            )
                                    )
                  Plaintiff,        )
                                    )
            v.                      ) No. 16-cv-259C
                                    )
THE UNITED STATES,                  )
                                    )
                  Defendant.        )
___________________________________ )
                                    )
COMMON GROUND HEALTHCARE            )
COOPERATIVE,                        )
                                    )
                  Plaintiff,        )
                                    )
            v.                      ) No. 17-cv-877C
                                    )
THE UNITED STATES,                  )
                                    ) Filed: September 16, 2021
                  Defendant.        )
___________________________________ )

                                    OPINION AND ORDER
       Before the Court are Class Counsel Quinn Emanuel Urquhart & Sullivan LLP’s Motions

for Approval of Attorney’s Fee Request and Class Representative Incentive Award related to their

representation of certain classes certified in the above-captioned cases. See Health Republic ECF

No. 84; Common Ground ECF No. 107. 1 Class Counsel seek approval of an attorney’s fee award

of five percent, approximately $185 million of the combined $3.7 billion judgment recovered on

the Non-Dispute Subclasses’ risk corridors claims. They also seek approval of $100,000 incentive

awards to both Health Republic Insurance Co. (“Health Republic”) and Common Ground

       1 Because the briefing pertaining to the opposed fee request motions in both cases is
substantively the same, for ease of reference this opinion and order will cite only to the briefing in
Health Republic.
Healthcare Cooperative (“Common Ground”) (collectively, “named Plaintiffs”) as representatives

of their respective classes, to be paid from Class Counsel’s fee. The Court is tasked with

determining the reasonableness of these awards. For the reasons that follow, the Court approves

in part and denies in part Class Counsel’s requests.

                                     I. BACKGROUND

       On February 24, 2016, Class Counsel filed a complaint on behalf of Health Republic as the

first challenge to the Government’s failure to make risk corridors payments to Qualified Health

Plan (“QHP”) issuers pursuant to Section 1342 of the Patient Protection and Affordable Care Act,

Pub. L. No. 111-148 (2010), 124 Stat. 119, and the Health Care and Education Reconciliation Act

of 2010, Pub. L. No. 111-152 (2010), 124 Stat. 1029 (collectively, the “ACA”). See Pl.’s Class

Action Compl., Health Republic ECF No. 1. The risk corridors program was designed to mitigate

risk for QHP issuers participating in the new insurance market created by the ACA. It did so by

providing QHP issuers compensation from the Government for any “losses exceed[ing] a certain

defined amount due to high utilization and high medical costs,” while on the other hand requiring

QHP issuers to pay the Government “a percentage of any profits [QHP issuers] made over

similarly-defined amounts.” Id. ¶ 5. In the Complaint, Class Counsel argued on behalf of Health

Republic and a putative class of QHP issuers that Section 1342 was a money-mandating statutory

provision that required the Government to “pay any QHP certain amounts exceeding the target

costs they incurred in [benefit years] 2014 and 2015,” id. ¶ 60, notwithstanding Congress’s

decision not to appropriate sufficient funds to pay such amounts, id. ¶ 10. Health Republic was

the first lawsuit filed challenging the Government’s withholding of risk corridors payments and

the first of its kind to raise a money-mandating theory of recovery under the Tucker Act. Health

Republic ECF No. 84 at 9 (citing Decl. of Stephen A. Swedlow ¶ 8, ECF No. 84-1).

                                                2
       By August 2016, numerous other firms had brought similar suits in this court on behalf of

individual QHP issuers, each arguing, among other things, that Section 1342 mandated the

Government to make risk corridors payments. See, e.g., First Priority Life Ins. Co. v. United

States, No. 16-cv-587 (Fed. Cl.) (filed May 17, 2016); Moda Health Plan, Inc. v. United States,

No. 16-cv-649 (Fed. Cl.) (filed June 1, 2016); Blue Cross and Blue Shield of N.C. v. United States,

No. 16-cv-651 (Fed. Cl.) (filed June 2, 2016); Me. Cmty. Health Options v. United States, No. 16-

cv-967 (Fed. Cl.) (filed Aug. 9, 2016); see also Health Republic ECF No. 84-1 ¶ 11.

       The Government moved to dismiss Health Republic’s Complaint, arguing that the Court

of Federal Claims lacked subject matter jurisdiction under the Tucker Act because Section 1342

did not constitute a money-mandating statute providing a substantive right to payment. See Def.’s

Mot. to Dismiss at 21–26, Health Republic ECF No. 8. The court rejected that argument and

denied the Motion to Dismiss as to the Section 1342 claim. See Health Republic Ins. Co. v. United

States, 129 Fed. Cl. 757 (2017).

       At the same time the court was considering the Government’s Motion to Dismiss, Health

Republic was moving forward in the class certification phase. The Government did not oppose

certification; consequently, on January 3, 2017, the court certified the proposed class in Health

Republic and appointed Quinn Emanuel lead class counsel. Order at 1–2, Health Republic ECF

No. 30. On February 24, 2017, exactly one year after it initiated suit, the court granted Class

Counsel’s proposed class notice plan. See Order, Health Republic ECF No. 42. Consistent with

the opt-in nature of class actions in the Court of Federal Claims, Class Counsel’s notice explicitly

informed potential class members that they must affirmatively submit a Class Action Opt-In Notice

Form to join the class, otherwise they would receive no benefit from the lawsuit. Updated

Proposed Class Notice at 2, 5, Health Republic ECF No. 41-1. The notice advised potential class

                                                 3
members that, if successful, Class Counsel would seek permission to be compensated for their

representation, which would be deducted from the amount of any recovery by the class. Id. at 7.

It did not identify a particular amount or percentage of any proposed fee award. See id.; see also

Health Republic ECF No. 84-1 ¶ 13.

       According to Class Counsel, it later became known that potential class members were

under the erroneous assumption that Class Counsel would be seeking a fee percentage in the

ballpark of 30 percent of any judgment. Mot. to Suppl. Class Notice at 1, Health Republic ECF

No. 50; Health Republic ECF No. 84-1 ¶ 13. To assuage those concerns, and with the court’s

approval, Class Counsel distributed a supplement to the class notice representing to potential class

members that they would seek a fee of no more than five percent of the class’s recovery. Proposed

Suppl. Class Notice at 6, Health Republic ECF No. 50-1; Order, Health Republic ECF No. 51;

Health Republic ECF No. 84-1 ¶ 15. The supplemental notice advised that the maximum award

may be substantially reduced depending on the level of class participation and, in any event, would

“be determined by the Court subject to, among other things, the amount at issue in the case and . .

. a ‘lodestar cross-check[.]’” Health Republic ECF No. 50-1 at 6. In sum, 153 QHP issuers opted

into the Health Republic class. Health Republic ECF No. 84-1 ¶ 17.

       In March 2017, Health Republic moved for summary judgment. See Pl.’s Mot. for Summ.

J., Health Republic ECF No. 47. On June 27, 2017, before the court decided that Motion, Class

Counsel filed a separate class action complaint in Common Ground for benefit year 2016. See

Pl.’s Class Action Compl., Common Ground ECF No. 1. As in Health Republic, the court certified

the proposed risk corridors class in Common Ground and appointed Quinn Emanuel as class

counsel. Order at 2, 3, Common Ground ECF No. 17. It likewise approved Class Counsel’s

proposed class notice plan. Order, Common Ground ECF No. 25. The Common Ground class

                                                 4
notice also advised potential class members that they must affirmatively opt into the class to benefit

from the lawsuit and that, if successful, Class Counsel would seek approval of at most a five

percent attorney’s fee award to be deducted from any class recovery. Am. Proposed Class Notice

at 1, 4–5, 6, Common Ground ECF No. 24-1. The notice similarly stated that Class Counsel’s fee

request might be reduced depending on class participation and that the fee ultimately would be

determined by the court subject to a lodestar cross-check. Id. at 6. In response, 130 QHP issuers

opted into the Common Ground class. Health Republic ECF No. 84-1 ¶ 17.

        Meanwhile, other risk corridors cases moved through the litigation process, with Moda

Health being the first to reach and be granted summary judgment. See Moda Health Plan, Inc. v.

United States, 130 Fed. Cl. 436 (2017). The favorable decision in Moda was in part a credit to

Class Counsel’s work in Health Republic, as it relied extensively on the court’s decision denying

the Government’s request to dismiss Health Republic’s Section 1342 claim. See generally id.

(citing with approval Health Republic Ins. Co., 129 Fed. Cl. at 770–72). The Government appealed

the decision in Moda Health, and pending resolution of that and other related appeals, the court

stayed further proceedings in the instant cases. Order, Health Republic ECF No. 62; Order,

Common Ground ECF No. 9. The stays lasted approximately three years.

       With Health Republic and Common Ground stayed, Class Counsel turned to filing amicus

briefs on behalf of Health Republic, Common Ground, and additional parties in the United States

Court of Appeals for the Federal Circuit. Health Republic ECF No. 84 at 12–13 (citing Health

Republic ECF No. 84-1 ¶ 22). The Federal Circuit subsequently ruled in favor of the Government

in each risk corridors appeal. See Me. Cmty. Health Options v. United States, 729 F. App’x 939

(Fed. Cir. 2018); Moda Health Plan, Inc. v. United States, 892 F.3d 1311 (Fed. Cir. 2018); Land

of Lincoln Mut. Health Ins. Co. v. United States, 892 F.3d 1184 (Fed. Cir. 2018). A divided Federal

                                                  5
Circuit later denied the motion for rehearing en banc in Moda Health, with Judge Wallach and

Judge Newman dissenting. Moda Health Plan, Inc. v. United States, 908 F.3d 738 (Fed. Cir.

2018). In his dissent, Judge Wallach cited several times Class Counsel’s amicus submissions on

behalf of Professor Kate Bundorf and other healthcare economists, as well as Health Republic and

Common Ground. See id. at 747–48 (Wallach, J., dissenting).

       In the subsequent Supreme Court proceedings, Class Counsel continued to work to assist

the QHP issuers in the risk corridors appeals for the obvious reason that success on virtually

identical claims (even in separate suits) would benefit the classes here. They again submitted

amicus briefs (albeit on behalf of a group of healthcare economists, not Health Republic or

Common Ground) at both the writ of certiorari and merits stages. See Health Republic ECF No.

84-1 ¶ 22; Opp’n and Obj. to Mot. for Approval of Atty’s Fee Req. at 12–13, Health Republic ECF

No. 89. Class Counsel also “provided comments, strategic suggestions, and assistance with

argument to the firms and attorneys handling the Supreme Court arguments.” Health Republic

ECF No. 84 at 13 (citing Health Republic ECF No. 84-1 ¶ 22). In an 8-1 decision, the Supreme

Court held that Section 1342 was a money-mandating statute that obligated the Government to

make risk corridors payments to QHP issuers, and such obligation was not impliedly repealed by

subsequent appropriation riders. See Me. Cmty. Health Options v. United States, 140 S. Ct. 1308,

1323, 1327 (2020). The decision essentially vindicated the argument Class Counsel incepted in

Health Republic. See Health Republic ECF No. 1 ¶¶ 60–63; see also Health Republic, 129 Fed.

Cl. at 770. As a result of the Supreme Court’s decision, the industry-wide recovery for QHP

issuers amounts to roughly $12 billion. Health Republic ECF No. 84 at 7. The class members

represented by Class Counsel here received a large chunk of that amount: $1.9 billion in Health

Republic and $1.8 billion in Common Ground. See Rule 54(b) J. at 1, Health Republic ECF No.

                                               6
83; see Order at 1, Common Ground ECF No. 111. This represents a 100 percent recovery of the

classes’ unpaid risk corridors payments. Health Republic ECF No. 84-1 ¶ 19.

       Seeking compensation, Class Counsel filed their Motion for Approval of Attorney’s Fee

Request and Class Representative Incentive Award on July 30, 2020. Consistent with the ceiling

set in the class notices, Class Counsel seek five percent of the common fund, or approximately

$185 million of the combined $3.7 billion awarded in the instant cases. Health Republic ECF No.

84 at 7–8. They argue that such percentage is reasonable primarily based on the seven-factor test

explicated in Moore v. United States, 63 Fed. Cl. 781, 787 (2005), and utilized by several judges

of the Court of Federal Claims applying the percentage-of-the-fund fee methodology. Health

Republic ECF No. 84 at 15 (citing Kane Cty. Utah v. United States, 145 Fed. Cl. 15, 18 (2019),

Lambert v. United States, 124 Fed. Cl. 675, 683 (2015), Quimby v. United States, 107 Fed. Cl.

126, 133 (2012)). Class Counsel argue that each of the Moore factors supports the conclusion that

they are entitled to the full five percent fee award requested. Id. Additionally, Class Counsel ask

that the Court award, from their fees, $100,000 incentive awards to each of the named Plaintiffs in

these cases. Id. at 38–39.

       Thirty-four class members lodged a consolidated objection to Class Counsel’s request.

Although Objectors state that Class Counsel “should be compensated handsomely” for their work

on the two class actions, they have a dramatically different understanding of what that means.

Health Republic ECF No. 89 at 8. Objectors argue that Class Counsel are entitled to approximately

$8.8 million, or about .22 percent of the common fund. Id. at 9; see Reply to Opp’n and Obj. to

Mot. for Approval of Atty’s Fee Req. at 19, Health Republic ECF No. 93. Contrary to the

percentage-of-the-fund approach advocated by Class Counsel, Objectors ask the Court to apply

either the lodestar method to determine Class Counsel’s fees or to use the lodestar as a cross-check

                                                 7
against the requested fee percentage. Health Republic ECF No. 89 at 14. Under that methodology,

they ask the Court to reduce the number of hours used to calculate Class Counsel’s lodestar by 35

percent for failure to provide detailed billing records and to lower Class Counsel’s blended hourly

billable rate by 35–40 percent to align with the Laffey Matrix. Id. at 15–18. Additionally,

Objectors argue that a risk multiplier of no more than two—instead of the 18–19 multiplier

produced by Class Counsel’s requested fee—is appropriate. Id. at 20, 24. Objectors state no

objection to Class Counsel’s request for incentive awards.

                                         II. DISCUSSION

    A.      The Court Will Apply the Percentage-of-the-Fund Method to Determine
            Reasonable Attorney’s Fees in These Common Fund Cases.

         Rule 23 of the Rules of the United States Court of Federal Claims (“RCFC”) permits this

Court to “award reasonable attorney’s fees and nontaxable costs that are authorized by law or by

the parties’ agreement” in a certified class action. RCFC 23(h); see Moore, 63 Fed. Cl. at 786

(attorney’s fee awards are “committed to the sound discretion of the court”). In common fund

cases, such as this, where “each member of a certified class has an undisputed and mathematically

ascertainable claim to part of a lump-sum judgment recovered on his behalf,” Boeing Co. v. Van

Gemert, 444 U.S. 472, 479 (1980), “a litigant or a lawyer . . . is entitled to reasonable attorney fees

from the fund as a whole,” Haggart v. Woodley, 809 F.3d 1336, 1352 (Fed. Cir. 2016) (internal

quotations and modifications omitted) (citing Boeing, 444 U.S. at 478). Awarding attorney’s fees

out of the common fund guarantees that each member of the class pays its fair share for class

counsel’s representation. See Boeing, 444 U.S. at 478 (common fund fee awards avoid unjustly

enriching parties substantially benefitting from, while only minorly contributing to, the suit); see

also Kane Cty., 145 Fed. Cl. at 18. Here, the common fund between the two cases is approximately

                                                  8
$3.7 billion, from which five percent has been reserved pending resolution of Class Counsel’s fee

request. 2 See Order, Health Republic ECF No. 98; Order, Common Ground ECF No. 125.

       Federal courts have taken differing approaches to determine the reasonableness of an

attorney’s fee request in common fund cases, and thus, one of the primary disputes between Class

Counsel and Objectors is the methodology this Court should apply. Class Counsel request that the

Court use the percentage-of-the-fund approach. Health Republic ECF No. 84 at 15. Under this

approach, several judges of the Court of Federal Claims have utilized the seven Moore factors as

guideposts for determining reasonableness. Id. (collecting cases). These factors consider:

       (1) the quality of counsel; (2) the complexity and duration of the litigation; (3) the
       risk of nonrecovery; (4) the fee that likely would have been negotiated between
       private parties in similar cases; (5) any class members’ objections to the settlement
       terms or fees requested by class counsel; (6) the percentage applied in other class
       actions; and (7) the size of the award.

Moore, 63 Fed. Cl. at 787 (citing Manual for Complex Litigation § 14.121 (4th ed. 2004)

(“MCL”)). No single factor is necessarily dispositive; they can be weighed in the Court’s

discretion. See, e.g., Quimby, 107 Fed. Cl. at 134 (considering each factor and determining that

the fee likely to have been negotiated between the parties most justified the award).

       Objectors, on the other hand, advocate for either the lodestar method or the lodestar as a

cross-check against any percentage award. Health Republic ECF No. 89 at 14. No matter how it

is used, the lodestar is calculated by multiplying the number of hours reasonably billed by class

counsel in undertaking the litigation by the appropriate billable rates for their services. See Geneva

Rock Prods., Inc. v. United States, 119 Fed. Cl. 581, 594–96 (2015). In a common fund case, the

court may then increase or decrease the amount of the lodestar by a so-called risk multiplier (a

       2The parties do not dispute that a common fund exists in these cases or that the common
fund doctrine, as opposed to fee-shifting, applies.
                                                  9
number symbolizing the amount of risk or difficulty involved with the case). Haggart, 809 F.3d

at 1355 n.19.

       The Federal Circuit has not mandated the use of one approach over the other. Rather,

binding precedent holds that this Court has discretion to choose between the percentage-of-the-

fund or lodestar methods in a common fund case. 3 See id. at 1354–55. While the lodestar method

is the preferred means of calculating attorney’s fees in fee-shifting cases, it has fallen out of favor

in cases where fees are paid from a common fund. See Perdue v. Kenny A. ex rel. Winn, 559 U.S.

542, 551 (2010); see also In re Rite Aid Corp. Sec. Litig., 396 F.3d 294, 300 (3d Cir. 2005) (stating

that the percentage-of-the-fund is “favored in common fund cases because it allows courts to award

fees from the fund in a manner that rewards counsel for success and penalizes it for failure”);

Swedish Hosp. Corp. v. Shalala, 1 F.3d 1261, 1271 (D.C. Cir. 1993) (“[A] percentage-of-the-fund

method is the appropriate mechanism for determining the attorney fees award in common fund

cases.”); MCL § 14.121 (stating that “the vast majority of courts of appeals now permit or direct

district courts to use the percentage-fee method in common-fund cases” (internal notations

omitted)). The reason for this is clear: “the lodestar method was designed to govern imposition of

fees on the losing party,” not the distribution of fees from victorious plaintiffs to their attorney.

Gisbrecht v. Barnhart, 535 U.S. 789, 806 (2002) (determining the lodestar method to be

inappropriate for judging reasonableness of contingency fee arrangement between attorney and

claimant in social security case subject to statutory maximum fee percentage).

       3 Consistent with that discretion, other judges of the Court of Federal Claims have chosen
to use the lodestar as a cross-check for the percentage-of-the-fund method, see, e.g., Kane Cty.,
145 Fed. Cl. at 19; Geneva Rock Prods., 119 Fed. Cl. at 594–95, while others have declined, see,
e.g., Lambert, 124 Fed. Cl. at 683 n.10; Quimby, 107 Fed. Cl. at 133–34.
                                                  10
       But this is not the only reason why the lodestar method has been identified as a poor fit for

common fund cases. More consequential criticisms emphasize that it “is difficult to apply, time-

consuming to administer, inconsistent in result, and capable of manipulation,” and it creates

incentives for inefficiency. MCL § 14.121; see Ramah Navajo Chapter v. Jewell, 167 F. Supp. 3d

1217, 1242 (D.N.M. 2016) (The lodestar, “even when used as a cross check . . . has the effect of

rewarding attorneys for the same undesirable activities that the percentage method was designed

to discourage, namely ‘incentiviz[ing] [class counsel] to multiply filings and drag along

proceedings to increase their lodestar.’” (citation omitted)); Jones v. Dominion Res. Servs., 601 F.

Supp. 2d 756, 766 (S.D. W.Va. 2009) (The lodestar cross-check tends to “re-introduce[] the

problems of the lodestar method.” (internal quote omitted)).

       Considering the circumstances of these cases, the Court believes the percentage-of-the-

fund is the appropriate method for calculating Class Counsel’s fee award. The lodestar method’s

primary emphasis on billable hours worked, with potential upward adjustment for the risks

assumed by counsel, fails to appreciate certain factors important to analyzing the reasonableness

of Class Counsel’s fee request—for example, the class members’ affirmative choice to join these

suits (knowing the potential of a five percent fee) rather than to pursue individual claims subject

to a higher market rate for attorney’s fees and the tremendous 100 percent recovery they obtained.

See In re Synthroid Mktg. Litig., 325 F.3d 974, 975 (7th Cir. 2003) (attorney’s fees should reflect

the “market rate for legal services . . . rather than the compensation a judge thinks appropriate as

a matter of first principles”). Thus, a nuanced, factor-based analysis will more appropriately gauge

the reasonableness of Class Counsel’s requested fee than Objectors’ suggested use of the lodestar

(either directly or as a cross-check), which relies on arbitrary premises and results in a grossly

disproportionate fee award to Class Counsel in comparison to the complete recovery obtained by

                                                11
the classes. See Will v. Gen. Dynamics Corp. No. 06-698-GPM, 2010 WL 4818174, at *3 (S.D.

Ill. Nov. 22, 2010) (“The use of a lodestar cross-check in a common fund case is unnecessary,

arbitrary, and potentially counterproductive.” (citations omitted)).

       Objectors rely on In re Volkswagen “Clean Diesel” Marketing Sales Practices & Products

Litigation, MDL No. 2672 CRB (JSC), 2017 WL 1352859 (N.D. Cal. Apr. 12, 2017) (“Clean

Diesel”), to support application of the lodestar method. Health Republic ECF No. 89 at 26. The

comparison is unconvincing despite the .25 percent attorney’s fee awarded in that case. First, in

Clean Diesel, Volkswagen—the defendant—agreed to pay attorney’s fees as part of a class

settlement; the class members received their recovery without making any payment for class

counsel’s representation. Clean Diesel, 2017 WL 1352859, at *1. The court declined to address

whether the common fund doctrine applied and, if so, which approach for calculating attorney’s

fees was appropriate. Id. at *2. It instead chose to apply the lodestar method because of its

applicability in both common fund and fee-shifting cases. Id. As a result, Clean Diesel is not

especially instructive.

       Second, the facts of Clean Diesel differ substantially from those in the cases at bar. The

Clean Diesel court cited three reasons for using the lodestar method to calculate fees in the “unique

circumstances” of that case: (1) “much of the groundwork” for the class settlement was laid in

negotiations preceding a separate class settlement (for which counsel had received compensation);

(2) the separate settlement incentivized Volkswagen to quickly reach settlement in Clean Diesel;

and (3) the high amount of the settlement at issue resulted primarily from the nature and value of

the assets at issue. Id. The court held that the percentage method would overcompensate class

counsel where counsel “did not expend significant additional time” reaching the settlement in

Clean Diesel or “undertake significant additional risk.” Id. As discussed further below, the same

                                                 12
cannot be said for Class Counsel’s prosecution of the instant cases. 4 Additionally, these cases do

not involve circumstances where a reduction in fees is necessary to protect class members from a

suboptimal settlement or the pecuniary self-interest of class counsel. See In re Subway Footlong

Sandwich Mktg. & Sales Pracs. Litig., 869 F.3d 551, 556 (7th Cir. 2017) (“A class settlement that

results in fees for class counsel but yields no meaningful relief for the class ‘is no better than a

racket.’” (citation omitted)); see also Reynolds v. Beneficial Nat. Bank, 288 F.3d 277, 279 (7th Cir.

2002).

         Accordingly, the Court will use the percentage-of-the-fund method to evaluate the

reasonableness of Class Counsel’s requested fee using the multi-factor analysis applied in Moore.

   B.         Class Counsel’s Requested Attorney’s Fee Is Reasonable.

         An analysis of the relevant factors persuades the Court that a five percent fee is reasonable.

         1.      The Quality of Counsel

         The quality of Class Counsel is essentially undisputed here, and the Court finds nothing in

this category that justifies a reduction in the requested fee. Both Quinn Emanuel and the members

of Class Counsel’s team have a history of providing quality results for their clients, including in

large class actions. See Health Republic ECF No. 84 at 16–18; Health Republic ECF No. 84-1 at

¶¶ 2–7. Despite the at times hyperbolic nature of their Motions, the facts show that Class Counsel

demonstrated a degree of foresight in bringing these suits and focusing their attention on the

         The other cases relied on by Objectors also demonstrate the fact-specific nature of a
         4

court’s decision to use either the percentage-of-the-fund or lodestar method in common fund cases.
Health Republic ECF No. 89 at 25–26 (citing In re Wash. Pub. Power Supply Sys. Sec. Litig., 19
F.3d 1291 (9th Cir. 1994), and Alexander v. FedEx Ground Package Sys., Inc., No. 05-cv-00038,
2016 WL 3351017 (N.D. Cal. June 15, 2016)). What is reasonable in one case, however, does not
constrain the exercise of the Court’s discretion in these cases. Wash. Pub. Power, 19 F.3d at 1296
(courts “should be guided by the fundamental principle that fee awards out of common funds be
reasonable under the circumstances” (emphasis in original) (internal quotation marks omitted)).
                                                  13
Section 1342 claim several months before other parties began filing individual complaints based

in part on the same legal theory. See Health Republic ECF No. 84 at 18–19. Even though

Objectors call into question the novelty of the argument, they do not contest that Class Counsel

pioneered the Section 1342 lawsuit by a matter of months or that the same argument they first

pressed eventually persuaded the Supreme Court to rule in favor of QHP issuers. See Health

Republic ECF No. 89 at 10 (referencing comments made by America’s Health Insurance Plans in

2014 arguing that the Government was statutorily required to make risk corridors payments). That

the favorable Supreme Court decision came down in separate, parallel cases handled by other

counsel does not undermine the quality of Class Counsel’s representation or the value added by

class counsel to the broader risk corridors litigation. See id. at 12–13. Indeed, one reason other

related cases beat Class Counsel to the high court was because Class Counsel, unlike in some of

those cases, successfully defeated dismissal at the pleading stage. See Health Republic ECF No.

84 at 19. At the end of the day, what is more important is that Class Counsel’s legal theory resulted

in a huge award to the classes here. In re Synthroid, 325 F.3d at 979–80 (excellent outcome for

class weighed against reducing fees); see Health Republic ECF No. 84-1 ¶ 24. As such, this factor

weighs in favor of Class Counsel.

       2.      The Complexity and Duration of the Litigation

       Courts have recognized that “[m]ost class actions are inherently complex.” In re Austrian

& German Bank Holocaust Litig., 80 F. Supp. 2d 164, 174 (S.D.N.Y. 2000) (citing In re NASDAQ

Market-Makers Antitrust Litig., 187 F.R.D. 465, 477 (S.D.N.Y. 1998)). The instant cases are no

exception. First, the legal question presented in these cases was not straightforward. As Class

Counsel note, when they brought the Health Republic case in February 2016, there was little in the

way of relevant binding precedent, both in terms of cases addressing money-mandating statutes

                                                 14
and in those interpreting Section 1342. See Health Republic ECF No. 84 at 21 (“‘[r]arely has the

[Supreme] Court determined whether a statute can fairly be interpreted as mandating compensation

by the Federal Government” (internal quotation marks omitted) (quoting Me. Cmty. Health

Options, 140 S. Ct. at 1329)). The number of diverging opinions in the Court of Federal Claims,

the Federal Circuit, and Supreme Court suggest that while these cases “turned on purely legal

issues,” as Objectors emphasize (Health Republic ECF No. 89 at 9), the question of whether

Section 1342 mandated risk corridors payments to QHP issuers was nonetheless complex enough

to split multiple courts as to its proper resolution.

       Additionally, although these cases did not involve contested class certification, discovery,

or trial, Class Counsel engaged in litigation in either a direct or supporting role at every level

before the class members in these cases were awarded judgment in their favor, including motion

practice at the pleading and merits stages in Health Republic as well as participation in related

appeals in both the Federal Circuit and Supreme Court. See In re Black Farmers Discrimination

Litig., 953 F. Supp. 2d 82, 94 (D.D.C. 2013) (rejecting “[a]n exclusive focus on the lack of

discovery, merits briefing, and trial” in determining class counsel’s fee award). These efforts

spanned the course of over four years.

       Objectors focus on the fact that Health Republic and Common Ground were stayed at a

relatively early stage of the litigation pending the appeals in other risk corridors cases, and they

diminish the overall influence Class Counsel had on the success of their claims, which they claim

were secured in separate matters before the Supreme Court. See Health Republic ECF No. 89 at

9, 12–13, 26. In a different scenario, these arguments would likely gain traction. But not here.

Objectors do not dispute that Class Counsel was first to file the Section 1342 claim in Health

Republic months before other cases followed suit with, in part, identical claims. Nor do they

                                                  15
dispute that Health Republic failed to win the race to the Supreme Court only because Class

Counsel succeeded in surviving dismissal, while other risk corridors cases did not or simply moved

to judgment faster as individual (not class) claims. While it is not possible for this Court to divine

to what extent Class Counsel’s amicus arguments swayed the Maine Community majority,

Objectors also do not dispute that Class Counsel pressed the classes’ interests—albeit in a

supporting role—during the course of the stays. Nor can they deny that Class Counsel’s arguments

had some objective impact in other trial court and intermediate appellate proceedings. See Moda

Health Plan, 130 Fed. Cl. at 450–51; Moda Health Plan, 908 F.3d at 747–48 (Wallach, J.,

dissenting). Simply put, these are not cases in which Class Counsel merely rode the coattails of

other innovative litigators.

       Second, Class Counsel have been tasked with organizing and managing two large classes

(153 members in Health Republic and 130 members in Common Ground, Health Republic ECF

No. 84-1 ¶ 17). The logistics of administering such large class participation—for example, flying

to meet with QHP issuers, fielding and resolving questions of class members and other issuers,

assisting class members who faced insolvency—magnifies the complexity of these cases. See

Health Republic ECF No. 84 at 22–23; Health Republic ECF No. 84-1 ¶¶ 18, 20–21; In re Black

Farmers Discrimination Litig., 953 F. Supp. 2d at 94 (acknowledging the “unenviable logistical

challenges that confronted class counsel” in large class action). All told, Class Counsel brought

together and have represented QHP issuers representing approximately one-third of the overall

value of risk corridors claims. Health Republic ECF No. 84-1 ¶ 17. Thus, the second Moore factor

also supports a finding of reasonableness.

                                                 16
       3.      The Risk of Nonrecovery

       Victory was never a certainty in these and the other risk corridors cases. Success was

dependent on a showing that Section 1342 created one of those “rare money-mandating

obligation[s]” requiring the Government to make risk corridors payments to QHP issuers. Me.

Cmty., 140 S. Ct. at 1331. The Government vigorously opposed the claim, successfully securing

dismissal of the same Section 1342 claim in other risk corridors lawsuits before multiple judges of

the Court of Federal Claims. See, e.g., Me. Cmty. Health Options v. United States, 133 Fed. Cl. 1

(2017); Blue Cross and Blue Shield of N.C. v. United States, 131 Fed. Cl. 457 (2017); Land of

Lincoln Mut. Health Ins. Co. v. United States, 129 Fed. Cl. 81 (2016). Losses in the Federal

Circuit, and that Court’s later rejection of rehearing en banc, only compounded the risk of non-

recovery. It would take a favorable decision by the Supreme Court to change the course.

       As Objectors argue, the existence of multiple similar suits likely served to spread the risk,

and the stays in Health Republic and Common Ground reduced the number of hours Class Counsel

invested into risk corridors litigation at the trial court level. See Health Republic ECF No. 89 at

26, 29. But those factors do not significantly diminish the overall risk that the classes’ Section

1342 claim would not succeed. See Raulerson v. United States, 108 Fed. Cl. 675, 678 (2013)

(noting that “all litigation carries risk”). If anything, the consistent losses other firms faced in

litigating the same claim increased the riskiness of any additional time Class Counsel spent on

Health Republic and Common Ground. All totaled, Class Counsel accumulated 10,000 billable

hours and assumed all litigation costs for which they may not have received any compensation at

all had the outcome gone the other way. Health Republic ECF No. 84-1 ¶ 23. This factor,

therefore, supports their fee request.

                                                17
       4.      The Fee That Likely Would Have Been Negotiated Between Private Parties in
               Similar Cases

       That Class Counsel are seeking a fee of only five percent weighs heavily in favor of

reasonableness when compared to other fee awards in typical common fund cases. It is not atypical

to find attorneys “regularly contract[ing] for contingent fees between 30% and 40% in non-class,

commercial litigation.” In re Ins. Brokerage Antitrust Litig., 282 F.R.D. 92, 123 (D.N.J. 2012);

Decl. of Brian T. Fitzpatrick ¶ 23, ECF No. 84-2 (“[T]he most common percentages awarded by

federal courts nationwide using the percentage method were 25%, 20% and 33%, with a mean

award of 25.4% and a median award of 25%.”). Fee awards in that range and higher have been

awarded in class actions filed in the Court of Federal Claims. See Raulerson, 108 Fed. Cl. at 680

(approving a 33 percent fee on a $22 million settlement); Quimby, 107 Fed. Cl. at 134 (approving

a 40 percent fee on a $74 million settlement).

       More importantly, Class Counsel’s five percent fee is also well below the market rate for

attorney’s fees in the risk corridors litigation. The 25 percent attorney’s fee arrangement that

Health Republic and Common Ground agreed to with Class Counsel before the certification of

their respective classes reinforces this point, as do the higher rates sought by other firms

representing QHP issuers. See Health Republic ECF No. 84-1 ¶ 8; id. ¶ 14 (averring that other

firms’ fee percentages were “in multiples” of Class Counsel’s five percent fee); Suppl. Decl. of

Stephen A. Swedlow ¶ 10, Health Republic ECF No. 93-2 (describing fees of 15 percent or more

sought by other firms representing individual clients). Thus, by opting into the classes, Objectors

received a substantial percentage reduction in the cost of pursuing their claims. The number of

QHP issuers opting into the class after receiving notice of Class Counsel’s maximum five percent

fee suggests that many of the class members recognized the potential savings and considered the

                                                 18
requested fee to be at least a better deal than could be had by bringing their own individual lawsuits.

See Health Republic ECF No. 84-1 ¶¶ 15–16; Quimby, 107 Fed. Cl. at 134.

       The decision in Quimby affirms this analysis. There, using the same seven-factor test, the

Quimby court approved a fee of 30 percent of a $74 million common fund largely because the fee

award was in line with what would have been negotiated in similar cases. Quimby, 107 Fed. Cl.

at 134. Although the size of the award gave the court some pause due to the unique circumstances

in that case, it ultimately reasoned that “[a] contingent fee that is reached by the free consent of

private parties should be respected as fair as between them.” Id. In its discussion, the court

emphasized the fact that the class members assented to the 30 percent fee arrangement by opting

into the class after receiving notice that counsel would seek that fee. Id. “[B]y opting into the

class, each member effectively accepted the offer of representation for a thirty percent contingency

fee, and presumably concluded that a better deal could not be reached with their own counsel.”

Id.; cf. Restatement (Third) of the Law Governing Lawyers § 34 cmt. C. (Am. Law Inst. 2007)

(“Fees agreed to by clients sophisticated in entering into such arrangements (such as a fee contract

made by inside legal counsel in behalf of a corporation) should almost invariably be found

reasonable.”).

       Similar reasons militate for the approval of Class Counsel’s full fee request. First,

Objectors, like the class members in Quimby, acted affirmatively to join the classes in these cases.

See Haggart v. United States, 89 Fed. Cl. 523, 530 (2009) (“[F]or an opt-in class action [under

RCFC 23], each participating member of the class must act affirmatively to participate . . .”). They

did so after being fully advised by the class notices that Class Counsel would seek no more than

five percent of any recovery. See, e.g., Health Republic ECF No. 50-1 at 6; Health Republic ECF

No. 84-1 ¶ 15. And they did so notwithstanding that there was a market for private counsel

                                                  19
representing individual QHP issuers with risk corridors claims. Notably, the class members in

these cases consist of sophisticated entities with access to in-house legal counsel. See Health

Republic ECF No. 84-1 ¶ 21; Health Republic ECF No. 93 at 26. As issuers of insurance plans,

the class members are no strangers to the task of determining what costs are acceptable to bear

relative to the risks involved in a particular venture. Objectors’ affirmative choice to join these

cases and pay, at most, the five percent fee identified in the class notices points strongly in favor

of approving Class Counsel’s fee. 5

       Two representations in Class Counsel’s class notice need addressing, however. The notice

stated that “the fee may be substantially less than 5% depending upon the level of class

participation” and asserted that the fees would be subject to a lodestar cross-check. See, e.g.,

Health Republic ECF No. 50-1 at 6 (emphasis added). Objectors point out that Class Counsel

concede they achieved substantial class participation, which Objectors argue justifies reducing the

percentages. Health Republic ECF No. 89 at 29 (quoting Health Republic ECF No. 84-1 ¶ 17).

As the language of the notices makes clear, however, a reduction was not guaranteed. Nor would

Class Counsel have authority to make such a guarantee because the ultimate decision to reduce a

requested fee percentage, if at all, rests within the Court’s discretion—whether based on class

participation or through use of the lodestar cross-check. 6

       5  Objectors emphasize the lack of a formal written agreement to a five percent fee, but that
fact is not determinative. Given the circumstances discussed above, and consistent with Quimby,
“by opting into the class, each member effectively accepted the offer of representation” for, at
most, a five percent contingency fee. Quimby, 107 Fed. Cl. at 134.

       6  As additional context, Class Counsel state that at the time of the notice’s issuance, they
were involved in settlement negotiations with the Government for the entire risk corridors liability,
not just the parties represented in Health Republic. Had a settlement been reached, it would have
resulted in $10 billion in settlement proceeds at a time when Class Counsel had spent $2 million
litigating Health Republic. Health Republic ECF No. 93-2 ¶ 3; see ECF No. 84-1 ¶ 10.
Consequently, Class Counsel issued the supplemental notice in anticipation of an early settlement
                                                 20
       In sum, especially where the other factors favor Class Counsel’s five percent fee, 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 five

percent—considerably lower costs than if they pursued their claims individually.

       5.      The Percentage Applied in Other Class Actions

       A five percent fee is low compared to those awarded in numerous other class actions.

Health Republic ECF No. 84 at 31–32 (collecting cases); see Health Republic ECF No. 84-2 ¶¶

23, 26; see also Decl. of Charles Silver ¶¶ 49, 75–77, Health Republic ECF No. 84-3. Other judges

of the Court of Federal Claims have previously acknowledged that “an award equal to one third of

the common fund is commensurate with attorney fees awarded in other class action common fund

cases.” Kane Cty., 145 Fed. Cl. at 19; see Raulerson, 108 Fed. Cl. at 680; Moore, 63 Fed. Cl. at

787. And multiple circuit courts have adopted benchmarks of between 20 and 30 percent for

calculating percentage awards. See Moore, 63 Fed. Cl. at 787 (collecting cases and concluding

that one-third of the common fund is a typical recovery).

       Even in megafund cases such as this, where courts often decrease the percentage awarded

as the size of class recovery increases, a five percent fee is well within the reasonable range of fees

sought and, in fact, is on the low end of what is traditionally awarded. See In re Payment Card

Interchange Fee and Merch. Disc. Antitrust Litig., 991 F. Supp. 2d 437, 445 (E.D.N.Y. 2014) (10

percent fee was justified for awards between $1–2 billion, and eight percent fee was justified for

awards between $2–4 billion); Health Republic ECF No. 84-2 ¶ 26 (table of billion-dollar class

and a reduction in their fee award due to the quick resolution of the entire risk corridors claims.
Health Republic ECF No. 93-2 ¶ 3. Although a reduction may very well have been appropriate
under those circumstances, the early settlement never materialized.
                                                  21
action awards and accompanying fee percentages); Health Republic ECF No. 84-3 at 182–83 (table

of cases involving megafund percentage awards).

       Accordingly, this factor weighs in Class Counsel’s favor.

       6.      The Size of the Award

       Where a successful lawsuit results in a multi-billion-dollar award, even a minute fee

percentage can result in a sizeable award to counsel, the case at hand being such an example. In a

vacuum, Class Counsel’s proposed fee results in a seemingly massive award of approximately

$185 million. But comparing that amount to the almost $3.7 billion awarded to the class members

demonstrates the reasonableness of the request and weighs heavily in the Court’s analysis. See

Raulerson, 108 Fed. Cl. at 680 (comparing the size of the fee in relation to the size of the award).

       Not surprisingly, the bulk of Objectors’ arguments relate to this factor. Instead of the five

percent Class Counsel seek, Objectors argue that an award of $8.8 million would be generous and

any amount above $20 million would be “patently unreasonable.” Health Republic ECF No. 89

at 28. As Class Counsel point out, the $8.8 million figure represents .22 percent of the common

fund. Health Republic ECF No. 93 at 19.

       Before addressing some of Objectors’ arguments for reducing Class Counsel’s fee,

identifying exactly what Objectors are requesting is useful. With a little basic math it becomes

evident that Objectors are seeking to pay an infinitesimal portion of their recovery to Class Counsel

in attorney’s fees. Take Rocky Mountain Health Maintenance Organization, Inc., for example,

who seeks to pay fees of approximately $109,000 from its combined $49.5 million dollar

judgment. See Health Republic ECF No. 83-1 at 6; Common Ground ECF No. 111-1 at 6. Or take

Kaiser Foundation Health Plan Inc. of Colorado, who having received $141 million, now seeks to

pay approximately $310,000 to Class Counsel. See Health Republic ECF No. 83-1 at 5; Common

                                                 22
Ground ECF No. 111-1 at 5. Notably, Objectors do not draw attention to the fact that their

requested reductions would result in a .22 percent attorney’s fee in exchange for the 100 percent

recovery they obtained.

       As explained above, the Court has determined that the percentage-of-the-fund is the proper

approach to evaluate the reasonableness of Class Counsel’s fee request. Accordingly, most of

Objectors’ specific arguments are irrelevant. The Court will nevertheless pause to address a few

reasons why a reduction of fees is not justified.

           a)      Detailed Billing Records

       First, Objectors contend that Class Counsel’s fee request should be reduced because they

provided only a declaration with a one-paragraph summation of their lodestar rather than

submitting detailed billing records. Health Republic ECF No. 89 at 15. Extrapolating from

decisions in several fee-shifting cases, Objectors assert that a 35 percent reduction in Class

Counsel’s lodestar is therefore warranted. Id. at 17–18 (citing Am. Rena Int’l Corp. v. Sis-Joyce

Int’l Co., LTD., No. CV 12-6972 FMO (JEMx), 2015 WL 12732433 (C.D. Cal. Dec. 14, 2015)).

The Court finds the amount of Objectors’ proposed reduction to be largely arbitrary and agrees

with Class Counsel that detailed billing records are not required where the percentage-of-the-fund,

or even the lodestar cross-check, is employed. See In re Rite Aid Corp. Sec. Litig., 396 F.3d at 306

(“The lodestar cross-check calculation need entail neither mathematical precision nor bean-

counting.”); In re Puerto Rican Cabotage Antitrust Litig., 815 F. Supp. 2d 448, 465 n.18 (D.P.R.

2011) (using “the Court’s common sense, experience, and familiarity with this case” to find that

expending over 30,000 billable hours was reasonable without reviewing detailed billing records).

       To the extent Objectors rely on fee-shifting cases (where the lodestar method is required)

to argue for the necessity of detailed billing records, their argument is unavailing. See Health

                                                23
Republic ECF No. 89 at 16 (collecting cases). Unlike in fee-shifting cases where the court must

determine the additional amount a losing defendant must pay to compensate the plaintiff’s

attorneys, in common fund cases there is “no direct or immediate danger of unduly burdening the

defendant,” making rigorous scrutiny of billing records unnecessary. 7 See Applegate v. United

States, 52 Fed. Cl. 751, 761 (2002) (quoting Skelton v. Gen. Motors Corp., 860 F.2d 250, 254 (7th

Cir. 1988), cert. denied, 493 U.S. 810 (1989)). Instead, even if the Court were applying the

lodestar method as a cross-check, it could simply determine the reasonableness of the fee based on

its familiarity with the case. Goldberger v. Integrated Res., 209 F.3d 43, 50 (2d Cir. 2000); In re

Puerto Rican Cabotage Antitrust Litig., 815 F. Supp. 2d at 465 n.18.

           b)      The Lodestar Multiplier

       Objectors argue that the fee sought by Class Counsel is unreasonable because it represents

a multiple of 18–19 times their $10 million lodestar, and thus should be reduced after a cross-

check of the percentage. Health Republic ECF No. 89 at 20, 24; see Health Republic ECF No. 84-

1 ¶ 23. Objectors argue that a multiplier of two is commensurate with the work performed by

Class Counsel. Health Republic ECF No. 89 at 24–25. Choosing a multiplier between the parties’

opposing data points seems a relatively arbitrary exercise, at least compared to the multi-factor

analysis performed above. Although Class Counsel concede that their requested fee results in an

uncommonly high payout, they point to several cases where courts have approved similar or larger

multipliers. See Stop & Shop Supermarket Co. v. SmithKline Beecham Corp., No. Civ. A. 03-

4578, 2005 WL 1213926, at *18 (E.D. Pa. May 19, 2005) (multiplier of 15.6); In re Merry-Go-

       7  For the same reasons, the Court is not bound to use the Laffey Matrix here, as it was
created to assist in analyzing awards under a fee-shifting statute. Adolph Coors Co. v. Truck Ins.
Exch., 383 F. Supp. 2d 93, 98 (D.D.C. 2005) (“[T]he Laffey Matrix, published by the United States
Attorney’s Office, is a concession by that office of what it will deem reasonable when a fee-shifting
statute applies and its opponent prevails and seeks attorneys’ fees.”).
                                                24
Round Enters., Inc., 244 B.R. 327, 335, 345 (D. Md. 2000) (multiplier of 19.6); Am.’s Mining

Corp. v. Theriault, 51 A.3d 1213, 1252 (Del. 2012) (multiplier of 66, though no cross-check was

conducted). Therefore, even if the Court applied the lodestar cross-check, a multiplier of 18–19

would, at least, not be outside the realm of reasonableness.

        7.      Objections to the Fee Request

        Of the hundreds of class members in Health Republic and Common Ground, the Court

received one substantive objection on behalf of 34 entities belonging primarily to two

organizations: UnitedHealthcare (23 of the 34 entities) and Kaiser Foundation Health Plan (four

of the 34 entities). See Health Republic ECF No. 89 at 8, 30; Health Republic ECF No. 93-2 ¶ 2.

In total, nine individual organizations object to Class Counsel’s request for a five percent fee. See

Health Republic ECF No. 89 at 30. Although larger than those involved in other percentage-of-

the-fund cases in this court, the number of objections is relatively low when viewed in the context

of the classes here. See, e.g., Lambert, 124 Fed. Cl. at 683–84; Quimby, 107 Fed. Cl. 126 at 134.

According to Class Counsel, putting Objectors aside, 90 percent of the organizations whose entities

opted into these suits, representing approximately $2.1 billion in damages, do not object to the fee.

Health Republic ECF No. 93 at 7 n.1. Consequently, the final factor likewise supports the

determination that Class Counsel’s fee request is reasonable.

   B.        The Requested Incentive Awards Are Denied.

        Lastly, Class Counsel ask that the Court approve two awards of $100,000 each to the named

Plaintiffs, Health Republic and Common Ground. Health Republic ECF No. 84 at 38–39.

Although not frequently addressed in the Federal Circuit, other courts have generally recognized

that whether to approve an incentive award in a class action is a matter of the court’s discretion.

See Rodriguez v. West Publ’g Corp., 563 F.3d 948, 958–59 (9th Cir. 2009); Dial Corp. v. News

                                                 25
Corp., 317 F.R.D. 426, 439 (S.D.N.Y. 2016); Radosti v. Envision EMI, LLC, 717 F. Supp. 2d 37,

52–53 (D.D.C. 2010).

       As Class Counsel note, other courts have with some frequency found it appropriate to

approve incentive awards to named plaintiffs in class actions as a reward for the benefits they

conferred to the class and the burdens they bore as class representatives. 8 See Health Republic

ECF No. 84 at 39 (citing In re Vitamin C Antitrust Litig., No. 06-MD-1738 BMC JO, 2012 WL

5289514, at *11 (E.D.N.Y. Oct. 23, 2012)). But the circumstances in which those courts have

granted incentive awards differ substantially from the circumstances at hand. Unlike the cases

Class Counsel cite, where requests for incentive awards were granted as part of a court’s broader

approval of a class settlement and (importantly) were paid from the settlement fund, Class Counsel

are requesting the awards to Health Republic and Common Ground be paid directly from their fee.

Approval of incentive awards in the latter scenario is much rarer. See 5 Newberg on Class Actions

§ 17:5 (5th ed.) (“In some rare cases, courts have alluded to the idea that incentive awards may be

[] paid by class counsel out of their fees and expenses.” (collecting cases)).

       This Court has concerns about the propriety of approving incentive awards paid from Class

Counsel’s fee. The Model Rules of Professional Conduct prohibit the sharing of attorney’s fees

with nonlawyers. See MODEL RULES OF PRO. CONDUCT R. 5.4(a) (AM. BAR ASS’N 2021). Similar

rules exist in jurisdictions that likely govern Class Counsel’s representation in the instant cases.

See, e.g., D.C. RULES OF PRO. CONDUCT R. 5.4(a) (2021); ILL. SUP. CT. R. 5.4(a) (2021); CAL.

RULES OF PRO. CONDUCT R. 1-320(a) (2018). Other courts have reached different conclusions on

       8 On the other hand, incentive awards appear to be an infrequent issue in this court. Class
Counsel have cited to only one case where a judge of the Court of Federal Claims approved an
incentive award. Health Republic ECF No. 84 at 38 (citing Russell v. United States, 132 Fed. Cl.
361, 365 (2017) (approving incentive awards as part of class settlement)).
                                                26
whether professional rules of conduct bar such awards. Compare In re Anthem, Inc. Data Breach

Litig., 2018 WL 3960068, at *32 (N.D. Cal. Aug. 17, 2018) (declining to award incentive awards

from attorney’s fee, which “may run afoul of ethical rules,” and instead directing payment of

awards from the class settlement fund), with In re Presidential Life Sec., 857 F. Supp. 331, 337

(S.D.N.Y 1994) (awarding incentive awards from attorney’s fees and declining to enforce rule

against fee-sharing where concerns of corruption were not at play). Regardless, this Court declines

to exercise its discretion in a manner that would potentially sanction the violation of ethical rules,

especially where the relevant rules do not recognize an exception for an attorney to share court-

awarded fees with its client in the case for which the fees were awarded. See In re UnumProvident

Corp. Derivative Litig., No. 1:02-CV-386, 2010 WL 289179, at *8 (E.D. Tenn. Jan. 20, 2010)

(noting lack of ethical concern with incentive award paid from attorney’s fees given exception

provided in applicable ethics rules but noting the “problematic nature” of such arrangement).

Because the judgments have already been disbursed from the common fund to the Non-Dispute

Subclasses (less five percent for potential attorney’s fees), there is no alternate source of funds

available from which the Court could consider making the incentive awards.

       Consequently, Class Counsel’s request for incentive awards to Health Republic and

Common Ground is denied.

                                       III. CONCLUSION

       For these reasons, the Court finds Class Counsel’s request for a five percent attorney’s fee

to be reasonable. Accordingly, Plaintiff’s Motions (Health Republic ECF No. 84; Common

Ground ECF No. 107) are GRANTED as to the fee request. Having determined pursuant to RCFC

54(b) that there is no just reason for delay, the Court directs the Clerk to enter judgment in Health

Republic in the amount of $95,183,102.35 to be paid to Class Counsel from the Non-Dispute

                                                 27
Subclass fund. The Clerk is likewise directed to enter judgment in Common Ground in the amount

of $89,665,569.32 to be paid from the Non-Dispute Subclass fund. Class Counsel’s request to pay

$100,000 incentive awards from their fees to Health Republic and Common Ground, respectively,

is DENIED.

       SO ORDERED.

Dated: September 16, 2021                          /s/ Kathryn C. Davis
                                                   KATHRYN C. DAVIS
                                                   Judge

                                              28