By David Thomas and Mike Scarcella

July 9 (Reuters) - (Billable Hours is Reuters' weekly report on lawyers and money. Please send tips or suggestions to D.Thomas@thomsonreuters.com.)

Simpson Thacher & Bartlett is facing a rare malpractice trial in Florida state court next week over decade-old allegations that the U.S. law firm botched a stock sale on behalf of an insurance administrator that later went bankrupt.

Simpson Thacher was tapped by Fort Lauderdale, Florida-based Patriot National to sell part of its publicly traded stock to a group of private hedge funds. But the law firm did not craft restrictions that would have prevented those funds from short-selling the company's stock starting in late 2015, former Patriot National CEO Steven Mariano alleged in a lawsuit.

The company's stock price dropped, creating "a death spiral Patriot National was never able to overcome," said Warren Burns, a partner at Burns Charest, who is representing Mariano. Patriot National filed for bankruptcy in early 2018.

Simpson Thacher said in a statement that the firm stood behind its work for and advice to Patriot National. The firm said Mariano's allegations are "baseless, ignore the realities of the transaction and fail to establish causation or damages. We look forward to vigorously contesting them at trial.”

Opening arguments in the trial are slated to start Wednesday in the 17th Judicial Circuit for Broward County in Fort Lauderdale, Florida.

Mariano, who was also Patriot National's main shareholder, in 2017 brought a claim of professional malpractice and negligence against Simpson Thacher and Kasowitz LLP, another U.S. law firm. Mariano tapped Kasowitz to pursue litigation against the funds that were short-selling Patriot National's stock, but he alleged that Kasowitz failed to alert him to Simpson Thacher's alleged malpractice.

Mariano's case against Kasowitz is on pause and will not be decided at next week's trial because the jury's ruling on the claims against Simpson Thacher could affect the viability of Mariano's case against Kasowitz, Burns said. A spokesperson for Kasowitz did not immediately respond to a request for comment.

Burns said Mariano is seeking over $200 million in damages.

Simpson Thacher argued in a September 2025 filing that Mariano had "no evidence to support his far-fetched claim of manipulative short-selling, much less that it caused Patriot National to fail nearly two years after his sale."

17th Judicial Circuit Court Judge John Bowman denied Simpson Thacher's motion for summary judgment in December.

Jury trials on legal malpractice cases are rare as the claims can be difficult to prove, and are often dismissed before they even reach a jury, said Noah Fiedler, a Milwaukee lawyer who advises and defends attorneys on malpractice and attorney disciplinary claims.

Fiedler, who co-authored an American Bar Association study reviewing legal malpractice claims, said in an email that legal malpractice cases are expensive for both plaintiffs and defendants. He said many cases settle "because law firms and insurance companies are risk-averse, and have developed a good sense of the reasonable value of claims."

Quinn Emanuel withdraws challenge to fee distribution in $6 billion 3M earplugs settlement

U.S. law firm Quinn Emanuel has withdrawn its challenge to its proposed share of legal fees in the 3M combat earplugs litigation, after a federal judge indicated she would approve a court official’s proposed payout distribution to plaintiffs’ lawyers in the sprawling $6 billion nationwide class action settlement.

Pensacola, Florida-based U.S. District Judge M. Casey Rodgers, ​who has overseen the earplug litigation, awarded the firm interim compensation of $11.2 million based on an accounting of available settlement funds. The firm ultimately could receive additional compensation, based on its 4.5% share of fees.

Quinn Emanuel had argued in its opposition that it should be granted a greater percentage, saying "no other firm can claim to as long or involved a history with the subject matter."

A court-appointed special master said the allocations are based on each firm's overall contribution to the litigation, with final payouts to depend on the size of the fund approved by the court. In the three largest awards, Aylstock, Witkin, Kreis & Overholtz is set to ​receive 21%, followed ⁠by Seeger Weiss at 17% and Ciresi Conlin at 10%. Those firms did not challenge the distribution plan. 3M's settlement came in the largest mass tort litigation in U.S. history. The company denied any wrongdoing.

Also on Billable Hours' radar this week…

-Two former partners of Clifford Chance have sued the global law firm ​in New York, challenging its bid to take back millions of dollars in compensation paid ‌out before they left this year for rival Sidley Austin. The case offers a rare look inside a global law firm's partnership agreement.

-The group of public health professionals, scientists and others that sued the U.S. Food and Drug ​Administration to obtain COVID-19 vaccine approval records has asked a federal judge to order the government to pay ‌more than $867,000 in legal fees and costs.

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