United States Court of Appeals For the First Circuit Nos. 09-1950 10-1766

PATRICIA DONAHUE, INDIVIDUALLY AND IN HER CAPACITY AS ADMINISTRATRIX OF THE ESTATE OF MICHAEL J. DONAHUE; MICHAEL T. DONAHUE; SHAWN DONAHUE; AND THOMAS DONAHUE, Plaintiffs, Appellees,

v.

UNITED STATES OF AMERICA, Defendant, Appellant.

____________________

Nos. 09-1951 09-1952

THE ESTATE OF EDWARD BRIAN HALLORAN, BY PATRICIA MACARELLI, IN HER CAPACITY AS ADMINISTRATRIX OF THE ESTATE, Plaintiff, Appellee/Cross-Appellant,

v.

UNITED STATES OF AMERICA, Defendant, Appellant/Cross-Appellee. ____________________

Before Lynch, Chief Judge, Torruella, Selya, Boudin, Lipez, Howard and Thompson, Circuit Judges. ____________________

ORDER OF COURT Entered: October 6, 2011

The petition for rehearing having been denied by the

panel of judges who decided the case, and the petition for

rehearing en banc having been submitted to the active judges of

this court and a majority of the judges not having voted that the case be heard en banc, it is ordered that the petition for

rehearing and the petition for rehearing en banc be denied.

LYNCH, Chief Judge, BOUDIN and HOWARD, Circuit Judges,

statement on denial of rehearing en banc. Under the Constitution,

federal courts may not make decisions based on sympathy to parties

and may not displace the judgments made by Congress in non-

constitutional matters. The legal issue presented by these cases

is not whether the conduct of the FBI was shameful; it was. It is

not whether plaintiffs are victims of that conduct; they are.

However wronged the plaintiffs, the issue is whether

these plaintiffs have complied with the stringent limitation period

set by Congress for claims under the Federal Tort Claims Act.

(b). Because the money to pay victims comes from the

United States, those time limits as a matter of law are required to

be strictly construed. United States v. Kubrick,

(1979). Whether the federal courts even have jurisdiction

over the claim depends upon the timely filing of an administrative

notice of claim.

(b), 2675(a); Kubrick,

. Our case law requires that the point of view of an

objectively reasonable person be used, not the point of view of the

particular plaintiffs. Cascone v. United States,

(1st Cir. 2004); McIntyre v. United States,

(1st

Cir. 2004).

There were many well-publicized admissions --

-2- particularly those of FBI Agent Morris whose dramatic courtroom

disclosures specifically about the FBI's role in the May 11, 1982,

double murder of Halloran and Donahue were corroborated by several

other witnesses -- which put objectively reasonable persons on

notice of these claims. Despite this, plaintiffs did not act

within the required time limits to file the required claims. It is

an easy step to file a claim. A majority of a panel of this court,

which took these claims very seriously, concluded that the

plaintiffs did not file a timely claim, in light of the arguments

made and evidence presented by plaintiffs. The courts cannot

assume the role of advocates and create arguments never made. Nor

was there any error in the legal standards used in making that

decision.

That the courts have no jurisdiction to hear a law suit

for damages under the FTCA because of plaintiffs' delay does not

mean that the two other branches of government are precluded from

providing a remedy. That is a decision for the Congress and for

the Executive, not for the federal courts, which have no

jurisdiction to award relief.

TORRUELLA, Circuit Judge, concerning the denial of en

banc review. Some cases are of "exceptional importance"1 because

of the potential they have to affect the lives of millions of

people. See, e.g., Igartúa, et al. v. United States, No. 09-2186,

1 See Fed. R. App. P. 35(a)(2).

-3- __F.3d __,

(1st Cir. Aug. 4, 2011) (Torruella,

J., dissenting). Other cases are of exceptional importance because

of the light they cast on our public institutions. The latter,

while not always directly affecting as broad a segment of the

population, are nevertheless exceptionally important by virtue of

what they demonstrate about the trust that we -- for better or

worse -- place in those institutions. This is one of those cases.

Yet barely a month since a divided vote in Igartúa denied 4 million

United States citizens residing in Puerto Rico review of

constitutional issues of exceptional importance, this court

continues this noxious pattern and once again prevents

consideration by the full court of questions of exceptional

importance. By this action it allows the government's outrageous

conduct to remain free of any consequence, and as in Igartúa,

perpetrates a monstrous injustice on another, albeit smaller, but

no less worthy, group of hapless citizens.

This is not the appropriate occasion for revisiting in

any detail my disagreement with the panel's majority opinion. I

indicate here only the grounds for my belief that the error

presented in this case is sufficiently important to merit en banc

review.

Beyond its implications for the Donahue and Halloran

families, this case has thrust renewed attention on the FBI's

reliance on confidential criminal informants, and the obvious ways

-4- in which this relationship can become too cozy for comfort. Public

trust in our institutions requires that when these institutions

stray, they be held accountable and made to absorb the costs of

their conduct. They ought not be perceived as operating with de

facto impunity. Although it is hoped that these agencies will

learn from these dreadful examples of government gone amuck, future

reform is of little consolation to those injured by official

malfeasance.

This concern would be important even if our cases

required the panel's result. But they do not. The government's

claim that the Donahue and Halloran estates filed their claims too

late rests on an astonishingly one-sided understanding of what

reasonableness requires. The panel majority pins the accrual date

as September 2, 1998, based upon publicity arising from FBI Agent

Morris's revelations about the leak of Halloran's identity to

Bulger. I cannot see in what way it is "reasonable" to expect

surviving family members to credit prima facie outrageous

speculation in the papers that high-level and systemic FBI

corruption may have contributed to their injury, particularly when

-- as here -- the government had repeatedly assured them over the

years that someone else was responsible. Is it so unreasonable for

citizens to rely on what their government was repeatedly asserting

as the truth? Can the government be allowed to benefit from its

own perfidious conduct in duping its own citizens with stonewalling

-5- and outright lies? Are citizens to be held to such a standard of

cynicism in their dealings with government, especially with such

hallowed agencies as the FBI?

Moreover, as the parties have represented, even if the

publicity surrounding Morris's revelations triggered a duty to

inquire, that alone is not sufficient for accrual. See McIntyre v.

United States,

(1st Cir. 2004) (stating that

although a "mere hunch, hint, suspicion, or rumor of a claim" may

"give rise to a duty to inquire into the possible existence of a

claim," a claim "does not accrue" on that basis) (first emphasis in

original, second emphasis added). What triggers accrual is having

enough information at one's disposal to file a claim -- in other

words, accrual occurs at the rational endpoint of inquiry, not at

its outset. Cf. Merck & Co., Inc. v. Reynolds,

(2010) (rejecting argument that limitations period under

(b)(1), which runs from "discovery" of violation,

begins to run "when a plaintiff would have begun investigating")

(emphasis in original). It is hard to see how it could be

otherwise, as I can see no reason to think there is a usefully

general answer to the question of what the period of time should be

between when inquiry begins and when it will yield sufficient

evidence to support filing an FTCA claim. Given that the

government was actively stonewalling as late as 2005 -- some seven

years after Morris's testimony -- even if the parties were on

-6- inquiry notice, they would not have discovered anything useful and

reliable until, at the earliest, the publication of Judge Wolf's

decision in Salemme in September of 1999.2

Taken individually, these concerns -- individual

injustice, loss of public trust, and substantial legal error --

might not by themselves justify en banc review. Taken together, I

believe they do.

As in Igartúa, the underpinning for this outcome is an

anachronistic judicially invented legal theory that has no validity

or place in American law -- in this case, sovereign immunity. Two

hundred and thirty-five years after we rid ourselves of King George

III and his despotic ascendancy over colonial America, we cling to

a doctrine that was originally based on the Medieval notion that

"the King can do no wrong." This maxim was blindly accepted into

American law under the assumption that it was incorporated as part

of the common law in existence when our Nation separated from

England. See Owen v. City of Independence, Mo.,

, 645

n.28 (1980). However, this assumption does not withstand

historical scrutiny. See Edwin M. Borchard, Governmental

Responsibility in Tort (pt. VI), 36 Yale L. J. 1, 17-41 (1926).

Furthermore, the present case is the quintessential example of the

fact that at times the government can, and does, do wrong.

2 See United States v. Salemme,

(D. Mass. 1999).

-7- More importantly, the doctrine of sovereign immunity

cannot be sustained in the face of our constitutional structure.

Although its language is far from specific in many parts, the

Constitution nevertheless contains nothing, specific or implied,

adopting the absolutist principal upon which sovereign immunity

rests. Furthermore, the record of the debates preceding the

adoption of the Constitution are bare of any language or

asseveration that might serve as a basis for support of this

monarchist anachronism. See generally Erwin Chemerinsky, Against

Sovereign Immunity,

(2001); Susan Randall,

Sovereign Immunity and the Uses of History,

(2002). In fact, the establishment in this country of a republican

form of government, in which sovereignty does not repose on any

single individual or institution, made it clear that neither the

government nor any part thereof could be considered as being in the

same infallible position as the English king had been, and thus

immune from responsibility for harm that it caused its citizens.

Not only is sovereign immunity inconsistent with a

central tenet of American government that no one, including the

government, is above the law, it also runs contrary to specific,

fundamental provisions of the Constitution: the Supremacy Clause3

and the Due Process Clause of the Fifth Amendment.4 Even assuming

3 U.S. Const. art. VI, § 2, cl. 2. 4 U.S. Const. amend. V.

-8- arguendo that the doctrine of sovereign immunity was part of

English common law, its transference to our legal system would have

been prevented, and was trumped, by the Constitution and its

Supremacy Clause, and especially by the Due Process Clause, which

requires that the tortuous deprivation of the lives of citizens by

the government's felonious agents and partners be duly compensated.

Many jurisdictions have recognized the incompatibility of

sovereign immunity with democratic principles. In the United

States, many state high courts have rejected sovereign immunity as

fundamentally unjust. See, e.g., Muskopf v. Corning Hosp. Dist.,

(Cal. 1961); Molitor v. Kaneland Community Unit

Dist.,

(Ill. 1959); Barker v. City of Santa Fe,

(N.M. 1943). As a result of judicial and

legislative action, "only a handful of States still cling to the

old common-law rule of immunity for governmental functions." Owen,

n.28. Globally, there is a trend among major

democratic nations towards the abolition of sovereign immunity.

See Denise Gillman, Calling the United States' Bluff: How Sovereign

Immunity Undermines the United States' Claim to an Effective

Domestic Human Rights System, 95 Geo. L. J. 591, 636-46 (2007).

Even the United Kingdom, from which it is believed (wrongly, see

Borchard, supra) the American notion of sovereign immunity derived,

abrogated the government's immunity from suits in tort through the

Crown Proceedings Act of 1947. See James E. Pfander, Government

-9- Accountability in Europe: A Comparative Assessment, 35 Geo. Wash.

Int'l. L. Rev. 611, 615-17 (2003).

The Donahue and Halloran cases are an unfortunate but

vivid example that even in the United States, with all our legal

and constitutional safeguards, the government can go rogue.

Although it is my belief and hope that our system is normally self-

corrective, there are times when the courts have a duty to

intervene to keep our system within the bounds of decency. This is

such a time, but sadly, this court has failed in its duty. The

concept of sovereign immunity may be beyond the power of this court

to challenge. However, this court had other valid grounds to

correct the injustice of the panel opinion. We have in the past

tolled the Federal Tort Claims Act's statute of limitations when

the government deliberately concealed evidence of its wrongdoing,

and there was no reason for us not to do so here. See Attallah v.

United States,

(1st Cir. 1992) (finding FTCA

statute of limitations tolled when government deliberately

concealed evidence of murder by Customs employees). Moreover, even

if we must respect the notion of sovereign immunity, that respect

did not require the harsh and unjust result in this case. The FTCA

waives the United States' sovereign immunity for a claim presented

within two years after the claim "accrues," 28 U.S.C. 2675(a), and

it was within this court's power to interpret the accrual

requirement broadly enough to allow the claims in this case to

-10- proceed. See United States v. Aetna Cas. & Surety Co.,

(1949) ("We think that the congressional attitude in

passing the [FTCA] is . . . accurately reflected by [the] statement

. . . : 'The exemption of the sovereign from suit involves hardship

enough, where consent has been withheld. We are not to add to its

rigor by refinement of construction where consent has been

announced.'") (quoting Anderson v. Hayes Constr. Co.,

(1926) (Cardozo, J.)). I believe this court should have

granted en banc review to petitioners, reversed the decision of the

panel, and reinstated the judgment of the district court granting

damages to petitioners against the government for its felonious

part in the murder of their loved ones.

James "Whitey" Bulger has finally been apprehended, and

is now being haled into the federal courthouse in Boston to answer

for the crimes he allegedly committed years ago. But unlike Bulger

himself, thanks to the panel majority's decision and the full

court's refusal to reverse it, Bulger's most trusted associate --

the Boston FBI office -- has gotten away with murder. This is the

wrong outcome, and most importantly, our law does not require it.

Cf. Attallah,

. The moral of this outcome seems

to be that crime does pay, at least for the government. This case

cries for redress, either by the Supreme Court, or by a special

bill of Congress.

-11- LIPEZ, Circuit Judge, dissenting from the denial of

rehearing en banc. There is nothing more hollow than expressions

of sympathy by judges over an injustice that the law permits them

to redress. There was no compelled outcome here. Instead, there

was a serious misjudgment that perpetuates a grave injustice. The

en banc process permits us to remedy such an injustice by

acknowledging the obvious: this is a case of "exceptional

importance" that requires deliberation by the full court. See Fed.

R. App. P. 35(a)(2).5 I therefore am once again disheartened that

three members of the court have voted to prevent en banc review.

See Igartúa v. United States, No. 09-2186,

(1st Cir. Aug. 4, 2011) (Lipez, J., dissenting from the denial of

rehearing en banc).

It is true that en banc review is reserved for the

exceptional case. It is also true that not every "unjust" decision

will be a matter of exceptional importance under Rule 35(a). But

the denial of en banc review here raises the obvious question: if

this case does not warrant the full court's attention, what case

does? Two families were tragically harmed by an institution of the

federal government. The betrayal of the public trust could not be

more egregious. Two district judges and a member of the panel

5 Although en banc rehearing is "not favored," exceptions exist where "en banc consideration is necessary to secure or maintain uniformity of the court's decisions" or "the proceeding involves a question of exceptional importance." Fed. R. Civ. P. 35(a).

-12- first hearing this case have found a basis in law to redress this

betrayal. Three members of our court have voted to reconsider the

panel's unfortunate decision. Given these circumstances, it is

frustrating in the extreme to witness the aversion to en banc

review play out again.

This institutional bias against en banc review goes

beyond the language of the rule emphasizing that en banc rehearing

is generally disfavored. It is grounded, in part, in the human

dynamics of an appellate court. The en banc process is deeply

divisive. It requires colleagues to review the work of colleagues

and sometimes judge that work negatively. There is also a fear

that line drawing will become too difficult. If en banc review is

granted here, the worry goes, how can we deny it there? These

feelings and fears have no place in the en banc calculus. We can

move beyond the hard feelings of the en banc process. We can draw

distinctions in principled ways. Our job requires us to do these

things.

This case is moored deeply in its facts and, ultimately,

requires a judgment about when the families should have been on

notice of the FBI's "reprehensible" role in their decedents'

murders. Donahue v. United States,

(1st Cir.

2011) (using that term to describe the FBI's conduct). In urging

en banc review, I acknowledge that the panel majority's conclusion

reflects careful thought and a good-faith attempt to deal with

-13- difficult facts. It is, however, palpably wrong. The majority

correctly observes that "courts must apply legal rules even-

handedly,"

, and they purport to apply a "rule" that

requires rejection of appellants' claims as time-barred. But the

issue here does not turn on a bright-line rule; rather, the

question is one of reasonableness. See

("[T]hese

appeals involve only the objective reasonableness of the

plaintiffs' failure to discern at an earlier time both their injury

and its likely cause."). Determining whether conduct was

reasonable requires us to make a judgment call. In making that

call, we fail in our responsibility if we do not test its

correctness by applying what our late First Circuit colleague,

Judge Frank M. Coffin, called "the justice nerve." See Frank M.

Coffin, The Ways of a Judge: Reflections from the Federal Appellate

Bench 222 (1980).

To be sure, we may not disregard applicable legal

doctrine simply to accomplish justice. No matter what the

equities, we may not "take it upon ourselves to extend the waiver

[of sovereign immunity] beyond that which Congress intended,"

United States v. Kubrick,

(1979). "Neither,

however, should we . . . narrow the waiver that Congress intended."

In opening the federal courts to tort claims against the

United States, Congress made plain its objective to treat fairly

individuals harmed by the conduct of government actors. See Feres

-14- v. United States,

(1950) (describing the FTCA as

"the culmination of a long effort to mitigate unjust consequences

of sovereign immunity from suit");

("The primary purpose

of the Act was to extend a remedy to those who had been without it

. . . ."). Although we are not "free to construe [the FTCA statute

of limitations] so as to defeat its obvious purpose, which is to

encourage the prompt presentation of claims," Kubrick,

, we also should not make the reasonableness judgment in a

particular case without regard for the FTCA's objective "to

mitigate unjust consequences," Feres,

.

Here, even without taking into account the egregiousness

of the government's conduct, the facts favor the Hallorans and the

Donahues. Our earlier precedent had carved out a path that should

have led the panel majority to conclude that the Hallorans' and

Donahues' suits against the United States were timely. As I shall

explain, the circumstances here are readily distinguishable from

those of other, related cases in which we have found the

plaintiffs' actions to be late. Moreover, when measured against

the only just outcome in this case, the majority's rejection of the

Halloran and Donahue claims as time-barred is not only wrong, but

inexcusably so.

The panel majority concludes that the plaintiffs

reasonably should have known the factual basis for their claims by

September 2, 1998, based solely on "information that was generally

-15- available at the time of the Salemme hearings." Donahue,

. The critical information was "the avalanche of publicity"

surrounding John Morris's testimony in April 1998,

supplemented by subsequent publicity about the ongoing hearings,

most notably publicity on September 2 surrounding Stephen Flemmi's

admission that he had been told of Brian Halloran's tip to the FBI

about Roger Wheeler's murder. Undoubtedly, these press reports

concerning Morris and Flemmi were a significant development in

unwrapping the relationship between the FBI and Bulger/Flemmi. In

none of our other cases, however, were these early-stage reports

the only basis for attributing knowledge of the relationship to the

plaintiffs. Among other factors, we have emphasized Judge Mark L.

Wolf's decision in September 1999 – a year after the cutoff date

imposed by the majority in this case – as an important piece of the

puzzle.

As examples of other approaches to the accrual date, in

the Roger Wheeler case (the other plaintiff in McIntyre v. United

States,

(1st Cir. 2004)), where the cut-off date for

accrual was May 1999, one family member had spoken publicly on 60

Minutes suggesting actual knowledge of a connection between the FBI

and Bulger/Flemmi before the cut-off date, and other family members

were aware of that broadcast, among other news reports.

.

In Rakes v. United States,

(1st Cir. 2006), where the

cutoff also was in May 1999, the panel referred to the

-16- "speculation" before September 1998 about John Connolly's

protection of Bulger and Flemmi, which triggered a duty to inquire.

. We then concluded that the claim accrued "by late 1998"

after Rakes's own trial and the publication of articles surrounding

Flemmi's.

(emphasis added). Adopting that same timeline based

on the same publicity would save the Hallorans' claim. As for

Michael Donahue, whose claim was filed a bit later, it is

significant that he was an innocent bystander while Rakes was

immersed in the Bulger/Flemmi history as a result of his own trial

in late May and June 1998 (for perjury, because he lied to the

grand jury about whether Bulger forced him to sell his – Rakes's –

liquor store). If "late 1998" was the appropriate accrual date

for the Rakes family, it would be appropriate to conclude that the

accrual date for the Donahues was months later (arguably as late as

Judge Wolf's decision in September 1999). In addition, much of the

publicity cited in Rakes referred to the FBI's acquiescence to

criminal activity other than murder – which would not have alerted

the plaintiffs to the much more outrageous link between the FBI and

the killings of their family members.

.

In Callahan v. United States,

(1st Cir.

2005), where the cutoff date was May 2000, we noted the April 1998

publicity surrounding Morris's testimony but also emphasized

newspaper articles that were published in 1999 and Judge Wolf's

opinion. The panel wrote: "Agent Morris's testimony and Judge

-17- Wolf's opinion easily provide the requisite knowledge that the FBI

protected Bulger and Flemmi from prosecution and emboldened them to

commit crimes, including the murder of Callahan."

.

Moreover, we said that "Judge Wolf's statement [suggesting that

Bulger and Flemmi may have played a role in the Wheeler, Halloran,

and Callahan murders] would prompt a reasonable person to further

investigate the matter."

(emphasis added). By no means did

we suggest that the publicity surrounding Morris's testimony more

than a year earlier was enough on its own to start the running of

the clock. Likewise, in Patterson v. United States,

(1st Cir. 2006), the plaintiffs' claims were rejected "most

importantly" because one of the plaintiffs had been interviewed

about the FBI's possible role in the murder at issue before the

cutoff date – not because of the news accounts.

.

It is noteworthy that, in all of these cases, the accrual

cutoff date was later than the dates in the present case (September

25, 1998 and March 1999). As more time passed – particularly with

the publication of Judge Wolf's opinion in September 1999 –

Morris's sensational testimony about the FBI's complicity became

more plausible. As Judge Torruella points out in his dissent from

the panel majority opinion, there was no good reason in the early

stages of the publicity for these particular plaintiffs to pay

attention to facially outrageous allegations concerning the FBI's

relationship with Bulger and Flemmi. See Donahue,

-18- (Torruella, J., dissenting). Halloran had identified Flynn as his

assailant, and the government thought that allegation sufficiently

reliable to try Flynn for the crime. By September 1998, it may

have been reasonable to conclude that the plaintiffs here should

have had a "'hunch, hint, [or] suspicion'" of a claim, McIntyre,

(citation omitted), at most imposing a duty of

inquiry. But that inquiry cannot be presumed to have had

instantaneous results and, indeed, the government was still

unwilling in 2005 to concede that Connolly had disclosed Halloran's

conduct to Bulger and Flemmi. See Donahue,

(Torruella, J., dissenting). At a minimum, the claims here should

not have been found to accrue, as in Rakes, before "late 1998" and,

in light of the unique scenario involving Jimmy Flynn, and

Donahue's bystander status, the plaintiffs were entitled to a more

generous view of the timing.

I can safely say that no one on our court is happy with

the result reached by the panel majority in this case. All of us

recognize the injustice that has been done to the Donahue and

Halloran families. But we could have remedied this injustice. The

en banc process is designed for just this situation, where the

flawed application of precedent by a panel majority should be

corrected. I deeply regret that we have failed to do so. I

therefore dissent from the denial of rehearing en banc.

-19- THOMPSON, Circuit Judge, dissenting from the denial of

rehearing en banc. For the reasons so well articulated by my

dissenting colleagues, I agree with them that our precedent does

not compel the conclusion reached by the majority and that this

case -- whose core question, simply put, is at what point should a

reasonable person believe that the government is lying to them6 --

presents an issue of exceptional importance to be considered by the

full court. See Fed. R. App. P. 35(a)(2). Accordingly, I readily

join my colleagues in dissenting from denial of rehearing en banc.

I write separately to profess the following: assuming our precedent

does indeed mandate the outrageous conclusion reached by the

majority, the grave injustice seething from such a result surely

provides more than enough reason for us to reexamine the precedent

that currently restrains us. I dissent.

By the Court: /s/ Margaret Carter, Clerk

cc: Hon. William G. Young, Ms Sarah Thornton, Clerk, United States District Court for the District of Massachusetts, Mr. Meier, Mr. Matthews, Mr. George, Mr. Mazzone, Ms. Lipscomb, Mr. Eiser, Mr. Mullane, Mr. Weigand, Ms. Leach, Mr. Hinchey, Mr. Morris, Mr. Levy, Mr. Schieffelin, Mr. Bondy and Mr. Christie.

Q:\TO_ABBS\wp\09-1950O.01a.wpd

6 This is not a question of sympathy, but rather, American civics.

-20-