Ferguson

In a mass tort action, class counsel stipulated to the certifi-

cation of a mandatory, non-opt-out class with respect to punitive damages. *1041 To settle the action, class counsel agreed to dismiss the punitive damages class claims with prejudice. Despite objections from some class members, the trial court dismissed the punitive damages claims and approved the settlement. Two of these objectors now contend class counsel committed legal malpractice and seek to recover the punitive damages they would have recovered but for counsel’s negligence. We now consider whether plaintiffs in a legal malpractice action may recover as compensatory damages the punitive damages they allegedly lost due to the negligence of their attorneys in the underlying litigation (lost punitive damages). We conclude they may not.

Facts

A. The Underlying Class Action

In 1994, a processing tower at a refinery in Rodeo, California, released hydrogen sulfide and a toxic chemical called Catacarb into the atmosphere. The release of these substances affected thousands of residents living near the refinery.

Soon thereafter, respondent Lieff, Cabraser, Heimann & Bernstein, LLP (Lieff Cabraser), filed a…

I agree with the majority that these two plaintiffs in a legal malpractice action may not recover as compensatory damages the punitive damages they allegedly lost when, as part of a settlement in the underlying class action, the attorneys for the class stipulated to a dismissal of the punitive damages sought by the class. But, unlike the majority, I would leave for another day the determination whether today’s holding applies to cases outside the class action context, when considerations different from those involved here may lead to a different conclusion.

I.

Plaintiffs are two of over 12,000 individuals who, after exposure to a toxic chemical emanating from a leak at a refinery, joined a class action against the refinery’s owner. Plaintiffs were among eight objectors to the $80 million settlement, which included a stipulation for dismissal of the punitive damage claims. The trial court approved the settlement, finding that “the public’s interest in punishing . . . and deterring” the defendant had been achieved, and that the settlement was made in good faith (Code Civ. Proc., § 877.6).

Under the terms of the settlement, plaintiffs were free to seek a jury trial on their…

In a mass tort action, class counsel stipulated to the certification of a mandatory, non-opt-out class with respect to punitive damages. To settle the action, class counsel agreed to dismiss the punitive damages class claims with prejudice. Despite objections from some class members, the trial court dismissed the punitive damages claims and approved the settlement. Two of these objectors now contend class counsel committed legal malpractice and seek to recover the punitive damages they would have recovered but for counsel's negligence. We now consider whether plaintiffs in a legal malpractice action may recover as compensatory damages the punitive damages they allegedly lost due to the negligence of their attorneys in the underlying litigation (lost punitive damages). We conclude they may not.

In 1994, a processing tower at a refinery in Rodeo, California, released hydrogen sulfide and a toxic chemical called Catacarb into the atmosphere. The release of these substances affected thousands of residents living near the refinery.

Soon thereafter, respondent Lieff, Cabraser, Heimann & Bernstein, LLP (Lieff Cabraser), filed a class action lawsuit against Union Oil Company…