THIS STORY HAS BEEN FORMATTED FOR EASY PRINTING

Bulger victims’ kin to push legal battle

Despite setback, encouraged by scathing dissent

By Shelley Murphy
Globe Staff / February 12, 2011

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A day after a divided federal appeals court overturned a ruling that had required the government to pay nearly $8.5 million to the families of two men killed by longtime FBI informant James “Whitey’’ Bulger, lawyers vowed yesterday to continue their legal battle.

Attorneys for the families of Michael Donahue and Edward “Brian’’ Halloran said they were heartened by a scathing dissent from one of the appeals court justices and will petition the entire six-member US Court of Appeals for the First Circuit for a new hearing.

“It’s a clear injustice,’’ said New Hampshire attorney William Christie, who represents the Halloran family. “If this is not a case that cries out for [full court] review, I can’t imagine what does.’’

Donahue’s son, Tom, an electrician from Dorchester, called the ruling “the biggest smack in the face that I’ve received yet from these courts.’’

He noted that Bulger remains a fugitive, while some of his associates cut deals that let them serve short prison terms for murder in exchange for their cooperation against corrupt FBI agents.

“Guys who were hit men and mass murderers already went to jail and got out, and we haven’t received anything but disrespect from the government,’’ Donahue said.

A US Justice Department spokesman declined to comment yesterday on the ruling.

Michael Donahue, 32, of Dorchester truck driver, an innocent bystander, was giving Halloran, a 41-year-old Bulger associate, a ride home from a bar on Boston’s waterfront on May 11, 1982, when Bulger and an unidentified accomplice opened fire, killing them.

Two years ago, a federal judge found the government was liable for the deaths because of the FBI’s corrupt relationship with Bulger and awarded $6.4 million in damages to Donahue’s wife and three sons, who were young when he was killed, and just over $2 million to Halloran’s wife.

Justice Department lawyers from the civil division in Washington, who have been fighting to et the case dismissed for the past decade, appealed.

On Thursday, two of the three appeals court justices who heard the appeal reversed the decision, ruling that the families were not entitled to anything because they filed their civil suits against the government too late. The judges said the FBI’s conduct was “reprehensible,’’ but the families were required to file their claims within two years of learning the government may have been liable for the deaths. The Halloran estate filed the claim in September 2000, and Donahue’s estate in March 2001.

The 38-page majority opinion, written by Judge Bruce M. Selya and joined by Judge Jeffrey R. Howard, said the families should have known by September 1998, based on intense news coverage of ongoing court hearings, that FBI misconduct may have led to the slayings of Halloran and Donahue. A former FBI agent testified during the hearings that he suspected another agent had warned Bulger and fellow informant Stephen “The Rifleman’’ Flemmi that Halloran was cooperating with the FBI and had implicated them in a slaying.

But, in a strongly worded 17-page dissent, Judge Juan Torruella referred to the reversal as “an unjust outcome which rewards official uncontrolled wickedness.’’

Torruella wrote that the majority ignored the fact that Halloran, in a dying declaration, had identified his killer as “Jimmy Flynn of Weymouth.’’ And despite Flynn’s being acquitted of the slayings in 1986, Torruella said the government maintained for decades that he was responsible. It was reasonable for the families to believe that, the judge said.

Torruella said it would have been pointless for the families to file a claim against the government in 1998 based on allegations that were made during pre-trial hearings after Flemmi was indicted on federal racketeering charges and Bulger, who remains a fugitive, fled to evade the charges.

“The government was at this point pursuing a strategy of dissimulation, denial, and stonewalling,’’ Torruella wrote.

The hearings before US District Chief Judge Mark L. Wolf proved a catalyst for further investigations, which led to the discovery of secret graves of victims of Bulger and Flemmi and sweeping new charges. Bulger and Flemmi were indicted in the slayings of Halloran, Donahue, and others in September 2000.

Flemmi, who is serving a life sentence for 10 murders, began cooperating with authorities in 2003. He testified during court proceedings in recent years that John J. Connolly Jr., than an FBI agent, warned him and Bulger in 1982 that Halloran was cooperating with the FBI and had implicated the gangsters in a slaying. Flemmi said the tip prompted Bulger and an accomplice to ambush Halloran and called Donahue “an unintended victim.’’

Bulger, who has been a fugitive since 1995 on the racketeering charges, was later charged with 19 murders and remains one of the FBI’s 10 Most Wanted. Connolly is serving a 10-year prison term for his 2002 racketeering conviction and another 40 years for murder in Florida.