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It isn’t likely lawyers will be held liable to their clients anytime soon for “lost” punitive damages. In arguments Wednesday, justices of the California Supreme Court were highly skeptical about the idea, expressing the feeling that little good could come from letting clients seek punitive damages arising from alleged legal malpractice. Justice Marvin Baxter asked plaintiffs lawyer David Becht whether that wouldn’t amount to second-guessing a lawyer’s strategy, particularly in a case involving a massive toxic tort settlement such as the one in question. Dissatisfied clients, he noted, could run from lawyer to lawyer filing malpractice claims. “Where’s the finality in this case?” Baxter asked. “This could go on forever.” Becht, a partner at Adams Nye Sinunu Bruni Becht, represents Brent Ferguson and Florencia Prieto, who sued Lieff Cabraser Heimann & Bernstein for malpractice for dismissing punitive damages claims in order to seal an $80 million class action settlement with Unocal Corp. over a 1994 toxic leak in the East Bay. The two claim that “but for” the firm’s negligence they might have received a huge punitive damages award on top of the $225,000 they got together in compensatory damages. From the start on Wednesday, the Supreme Court’s justices appeared to agree that allowing that kind of liability for lawyers wasn’t a good idea. Chief Justice Ronald George queried whether letting lawyers be sued for “lost” punitive damages punishes the wrong party — the lawyers — rather than, in this case, the corporation that accidentally released 100 tons of Catacarb. “How can that be consistent with the overall rule for punitive damages?” he asked. “When we punish we try to punish the persons who deserve punishment, right?” Becht said that’s exactly what would be happening if lawyers face punitive damages for malpractice. “What we’re saying is the attorney has to pursue the punitive claim just like every other claim,” he said, “with due diligence.” Becht’s opponent, Howard, Rice, Nemerovski, Canady, Falk & Rabkin partner Jerome Falk Jr., had an easier time with the panel, but still got hit with some tough questions. “It seems you’re arguing that punitive damages are good for the rest of the world, but not for attorneys,” Justice Ming Chin said. “Their malpractice caused the damage. Why shouldn’t they be held liable?” Justice Kathryn Mickle Werdegar asked Falk whether he was arguing that claims for punitive damages should never be allowed in a legal malpractice case or just in class action settlements. And Baxter asked what if a lawyer had committed serious misconduct, such as taking a bribe to settle a case by agreeing to dismiss punitive damages? Falk said there are occasions where attorneys could face punitive measures, and that Baxter’s scenario could well be such a situation. Currently, there are two lower court rulings that hold different views on the issue. In Piscitelli v. Friedenberg, 87 Cal.App.4th 953, San Diego’s Fourth District Court of Appeal in 2001 refused to permit punitive damage claims in legal malpractice cases. But in 1992, Sacramento’s Third District in Merenda v. Superior Court, 3 Cal.App.4th 1, had held that lost punitive damages were simply one more component of compensatory damages for malpractice. Justice Joyce Kennard noted Wednesday that several states have followed the Merenda reasoning. “The view you wish us to adopt,” she told Falk, “would be the minority view.” Many of those states, Falk said, “have not analyzed it in the context of proximate cause.” And, he said, there is no showing in his case that Lieff Cabraser was the proximate cause of the plaintiffs’ injuries. The case is Ferguson v. Lieff Cabraser Heimann & Bernstein, S104444. The court’s ruling is expected within 90 days.

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