McIntyre ex rel. Estate of McIntyre v. U.S.

• Decision Date: 16 October 2008
• Docket Number: No. 07-1664.,No. 07-1663.,07-1663.,07-1664.
• Citation: 545 F.3d 27
• Parties: Emily McINTYRE, as Administrator of the ESTATE OF John L. McINTYRE; Christopher McIntyre, in His Capacity as Co-Administrator of the Estate of John L. McIntrye, Plaintiffs, Appellees/Cross-Appellants, v. UNITED STATES of America, Defendant, Appellant/Cross-Appellee, H. Paul Rico; John Morris; John J. Connolly, Jr.; Roderick Kennedy; Robert R. Fitzpatrick; James Ring; James W. Greenleaf; James Ahearn; Kevin J. Weeks; James J. Bulger; Stephen J. Flemmi; John Doe Number 1-50; Federal Bureau of Investigation; Lawrence Sarhatt; John V. Martorano; Richard F. Bates; Joseph Yablonsky; James F. Scanlon; Dennis F. Creedon; Thomas J. Daly, Defendants.
• Court: U.S. Court of Appeals — First Circuit

545 F.3d 27

Emily McINTYRE, as Administrator of the ESTATE OF John L. McINTYRE; Christopher McIntyre, in His Capacity as Co-Administrator of the Estate of John L. McIntrye, Plaintiffs, Appellees/Cross-Appellants, v. UNITED STATES of America, Defendant, Appellant/Cross-Appellee, H. Paul Rico; John Morris; John J. Connolly, Jr.; Roderick Kennedy; Robert R. Fitzpatrick; James Ring; James W. Greenleaf; James Ahearn; Kevin J. Weeks; James J. Bulger; Stephen J. Flemmi; John Doe Number 1-50; Federal Bureau of Investigation; Lawrence Sarhatt; John V. Martorano; Richard F. Bates; Joseph Yablonsky; James F. Scanlon; Dennis F. Creedon; Thomas J. Daly, Defendants.

No. 07-1663.

No. 07-1664.

United States Court of Appeals, First Circuit.

Heard March 3, 2008.

Decided October 16, 2008.

Thomas M. Bondy, Attorney, Appellate Staff, Civil Division, U.S. Department of Justice, with whom Peter D. Keisler, Assistant Attorney General, Jeffrey S. Bucholtz, Acting Assistant Attorney General, Jonathan F. Cohn, Deputy Assistant Attorney General, Steven I. Frank and Jonathan H. Levy, Attorneys, Appellate Staff, Civil Division, U.S. Department of Justice, were on brief, for appellant/cross-appellee.

William E. Christie, with whom Steven M. Gordon and Shaheen & Gordon, P.A., were on brief, for appellees/cross-appellants.

Before LIPEZ and HOWARD, Circuit Judges, and BESOSA,^* District Judge.

LIPEZ, Circuit Judge.

This case is another chapter in the saga of the relationship between the FBI's Boston Office and two organized crime figures, James "Whitey" Bulger and Stephen Flemmi, whose unlawful, violent conduct in that city spanned three decades. Following an eighteen-day bench trial featuring nine witnesses and thousands of pages of exhibits, the district court concluded that former FBI agent John Connolly was acting within the scope of his employment when he leaked the identity of an informant, John McIntyre, resulting in McIntyre's brutal murder by Bulger, Flemmi and their associates in the notorious Winter Hill Gang. The court consequently awarded McIntyre's estate approximately $3.1 million in damages against the government under the Federal Tort Claims Act (FTCA), 28 U.S.C. § 1346.

The government has appealed, arguing that Connolly was a rogue agent whose disclosure of McIntyre's identity violated fundamental FBI policies and was beyond any rational view of conduct falling within the scope of his employment. We reject the government's position. We affirm the judgment of the district court.

I.

The district court meticulously set out the factual background of this case, detailing the decades of history concerning Bulger's and Flemmi's involvement with the FBI in Boston and, in particular, the pair's relationship with Connolly. See McIntyre v. United States, 447 F.Supp.2d 54, 62-104 (D.Mass.2006). Parts of that more than 40-page history also have been reported in other opinions that we have issued, including our decision affirming Connolly's conviction on charges stemming from his efforts to facilitate Bulger's and Flemmi's criminal activities and to protect them and their associates from arrest and prosecution. See United States v. Connolly, 504 F.3d 206 (1st Cir.2007); McIntyre v. United States, 367 F.3d 38 (1st Cir.2004); United States v. Connolly, 341 F.3d 16 (1st Cir.2003). Unable to improve on the district court's exhaustive review of the record, we provide here only a summary of the facts essential to an understanding of the scope of employment issue at the heart of this case. However, we assume the reader's familiarity with all of the district court's factual findings, which have not been challenged by the government on appeal. Our precis borrows liberally from the district court's well stated recitation, as well as from our own prior opinions.

A. Connolly's Official Role with Bulger and Flemmi

Bulger and Flemmi were informants for the FBI's Boston office at various times during a period of more than twenty-five years. Flemmi was first recruited in 1964 and Bulger in 1971, and both men provided information off and on until 1990. McIntyre, 447 F.Supp.2d at 73. They were considered particularly valuable sources for the office's high-priority investigation of the Boston branch of La Cosa Nostra ("LCN").¹ Although they were members of the competing Winter Hill Gang, Bulger and Flemmi frequently consorted with LCN members "and purported to transmit inside information to the FBI concerning organized crime activities in New England." Connolly, 504 F.3d at 210. The Boston LCN investigation proved fruitful, leading to the 1983 arrests and 1986 convictions of the leading figures of the Boston branch, Gennaro Angiulo and Illario Zannino, as well as other LCN members. McIntyre, 447 F.Supp.2d at 63.

Connolly, who joined the FBI in 1968, served as Bulger and Flemmi's "handler" during most of their tenure as FBI informants, beginning in 1975. Connolly, 341 F.3d at 20; McIntyre, 447 F.Supp.2d at 73-74.² In that capacity, he met with them regularly and controlled other agents' access to them. Rarely did other FBI agents talk with the two men outside of Connolly's presence. See, e.g., id. at 87 (stating that Connolly served as an intermediary with Bulger and Flemmi for other agents investigating several murders); id. at 90 (noting that the Boston office rejected a request that Bulger and Flemmi be interviewed in connection with two murders "upon instructions from FBI Headquarters that no one other than Connolly" should interview them); id. at 91 (noting Agent Montanari's belief that "Bulger and Flemmi, `as informants of an agent' would refuse to meet with him absent Connolly's intervention"); id. at 98 ("Bulger and Flemmi communicated almost exclusively with Connolly, and they refused to work with any other handler."). When Connolly retired suddenly in 1990, Bulger and Flemmi were immediately closed as informants. Id.

B. Connolly's Collaboration with Bulger and Flemmi

At some point, the relationship between Connolly and his two informants turned illicit. A grand jury indicted Connolly in 2000 on charges of racketeering, obstruction of justice, conspiracy and making a false statement, alleging that he had provided protection, the identities of informants, and other assistance to Bulger and Flemmi in exchange for bribes and favors.³ He was convicted in 2002 and sentenced to 121 months in prison.⁴ We twice rejected his appeals. See Connolly, 504 F.3d 206; Connolly, 341 F.3d 16.

Among Connolly's misdeeds was disclosure of the names of at least two informants, before the McIntyre episode, both of whom were murdered by Flemmi, Bulger or their associates shortly after the leaks. Flemmi stated that, in December 1976, Connolly told Bulger that a bookmaker who did business with the Winter Hill gang, Richard Castucci, had been cooperating with the FBI. Tr. Day 1, at 90-91; Ex. 3 at 7 (Agreed Statement of Facts in United States v. James J. Bulger, Stephen J. Flemmi, Michael S. Flemmi, No. 99-10371, 2001 WL 35817090 (D.Mass. May 23, 2001)). Castucci was shot to death by members of the group later that month.⁵ A second informant, Edward "Brian" Halloran, approached the FBI in early 1982 with information about the Winter Hill Gang and their possible involvement the previous year in the murder in Tulsa, Oklahoma, of a businessman named Roger Wheeler.⁶ Among other information, Halloran told Agent Leo Brunnick that Bulger and Flemmi met with Connolly on a weekly basis and that the two men "had a `pipeline into the Boston Office.'"⁷ 447 F.Supp.2d at 83 (citing Ex. 84, Memo from Brunnick). Sometime before May 11, 1982, Connolly told Bulger of Halloran's cooperation. Tr. Day 2, at 34-35 (Flemmi testimony). Bulger shot and killed Halloran and an associate, Michael Donahue, on May 11, as they were leaving a restaurant in Boston. 447 F.Supp.2d at 86.⁸

Agents at the FBI's Boston Office and at FBI Headquarters suspected that Bulger and Flemmi were involved in the Wheeler, Halloran and Donahue murders. 447 F.Supp.2d at 84-86. Indeed, Halloran had told Agent Brunnick and his partner, Agent Gerald Montanari, that Bulger, Flemmi and Callahan⁹ were responsible for plotting Wheeler's murder and that he, Halloran, had been paid $20,000 to keep quiet about it. Id. at 82-83 (citing Ex. 27, Memo from McWeeney); Tr. Day 15, at 18 (Montanari testimony). He also told the agents that Martorano — the gunman— might be using Callahan's Fort Lauderdale condominium as a safe-house. Id. at 83. All of Halloran's information was passed along to FBI Headquarters. Id. at 84. Although some details of Halloran's story were investigated, "inexplicably, the Boston Office never followed up on Halloran's claim that Martorano, the reported shooter in the Wheeler murder and a federal fugitive, was hiding out at Callahan's condominium in Florida." Id. at 85.

In the last week of May 1982, meetings to discuss the Wheeler and Halloran killings took place in Washington and Boston. At the Washington meeting, agents from Boston, Miami and Oklahoma City, as well as officials from FBI Headquarters, acknowledged that Bulger and Flemmi were suspects in the cases, but a decision was made to retain them as "open" informants because the allegations against them were unsubstantiated and they were extremely valuable assets in the LCN investigation. Id. at 87 (citing Ex. 30, May 25, 1982 Memo from ASAC Fitzpatrick to Special Agent in Charge ("SAC") Lawrence Sarhatt); Tr. Day 9, at 59-60 (Fitzpatrick testimony).¹⁰ If the suspicions had been confirmed, agency policy would have prevented their retention as informants without authorization from the highest levels of the FBI and Justice Department.¹¹

At a follow-up meeting two days later in Boston, Connolly — who had not been at the meeting in Washington — was informed that Bulger and Flemmi were the focus of the investigation into the Wheeler and Halloran murders. He argued that they were not involved. It was agreed that the agents investigating the...