Opinion
Civil Action No. 95-11513-DPW
March 28, 2002
MEMORANDUM AND ORDER
The United States presented confidential information to obtain a 1996 judgment in this action ordering forfeiture of lottery proceeds otherwise payable to James J. Bulger. Over four years later, the government developed a cooperating witness upon whom it will rely as to other matters in related criminal proceedings. Certain evidence offered by the cooperating witness is, however, inconsistent with the basis upon which the government obtained the instant forfeiture. The government reported this post-verdict information in an informational filing. Three new claimants now seek to reopen and vacate the judgment of forfeiture to permit them to pursue recovery of the lottery funds. I can find no recognized basis to reopen the forfeiture judgment and consequently will not entertain their claims.
I. Background
A. The Lottery Proceeds
Sometime between 1988 and 1990, John Bulger agreed to be a cosignatory on South Boston Savings Bank Account No. 02-44-255305 with his brother James. United States v. U.S.Currency, $81,000, 189 F.3d 28, 30 (1st Cir. 1999). In July 1991, ticket no. M246233, which was registered in the name of Michael Linskey, won the Mass. Millions Game and entitled Michael Linskey to $14.3 million dollars, payable in annual installments over a twenty year period. Papers were provided to the State Lottery Commission indicating that James Bulger, Patrick Linskey, and Kevin Weeks were by prior agreement each entitled to one-sixth of the winnings. Arrangements were then made with the South Boston Savings Bank to disburse James Bulger's one sixth share of the proceeds of the ticket each year into the South Boston Savings Bank joint account held by the brothers Bulger.
B. The Forfeiture Proceedings
James Bulger was indicted in this district for racketeering and other offenses in January 1995 and has since become a fugitive from justice. On July 17, 1995, the United States seized James Bulger's one-sixth share of all present and future proceeds of the lottery ticket and filed a verified complaint for forfeiture in rem. Relying on the testimony of confidential informants, who claimed that James Bulger paid Michael Linskey a substantial amount of money for his share, I found probable cause for forfeiture and approved a forfeiture warrant pursuant to 18 U.S.C. § 981(a)(1)(A) on grounds that the property was involved in money laundering.
Notice of the seizure was sent by certified mail to James Bulger's last known address, which was also John Bulger's address at the time. Notice was published in the Boston Herald on August 8, 15, and 22, 1995. At that time, neither James nor John Bulger appeared to contest the forfeiture. Only their sister, Jean Holland filed a claim. On January 26, 1996, I found that Jean Holland had no standing and entered a default judgment forfeiting the property seized to the court. The First Circuit affirmed the dismissal of Holland's claim. The Lottery Commission has taken the position that despite the long-term payout all property of the Commission payable to James Bulger was forfeited to the United States by that Order.
C. The Weeks Evidence
On July 20, 2000, Kevin Weeks pleaded guilty to several crimes he committed while associated with James Bulger and agreed to cooperate with the government as part of his plea agreement. Weeks contradicts the government's theory that James Bulger bought the ticket for money laundering purposes. Weeks told the government that neither he nor James Bulger paid for their shares of Linskey's lottery ticket. Weeks said that Patrick Linskey bought the ticket and gave it to his brother Michael, who agreed to split any winnings with Patrick. Weeks also said that Patrick Linskey then entered an agreement to split his share of the ticket with Weeks and James Bulger and that Michael Linskey honored the Bulger-Weeks-Patrick Linskey agreement when the ticket won. Weeks further reported that another Bulger associate, Stephen Flemmi, became enraged when he learned of the agreement and, for that reason, Bulger suggested telling Flemmi that they were merely pretending to receive lottery income in order to advance money-laundering purposes and that they were both secretly returning the money to Michael Linskey. Weeks also stated that he spread the story around so Flemmi would hear it from other people.
D. The Claimants
1. John Bulger
On June 2, 1997, John Bulger filed a claim and answer in a separate government forfeiture action brought by the government against assets of James Bulger, (Civil Action No. 97-10557-NG). That case involved money contained in the joint bank account he held with his brother James. John Bulger argued that he had standing because the money in the account belonged to both him and James. The district court concluded that although John had legal title to the res, his testimony indicated that he lacked dominion and control over it. Accordingly, the court dismissed his claim. The First Circuit, nevertheless, reversed and found that John's interest in the bank account was sufficient to support standing. United States v. U.S. Currency, $81,000, 189 F.3d 28, 37 (1st Cir. 1999). Following the appellate ruling, John Bulger and the government entered into a settlement agreement under which John Bulger would receive some, but not all, of the forfeited funds in No. 97-10557-NG.
2. Olga Davis
Olga Davis's daughter, Debra Davis, disappeared in 1981. Based on testimony provided by Weeks, James Bulger and Stephen Flemmi were indicted in September 2000 for the murder of Debra Davis. Debra Davis's body was found in October 2000.
In February 2001, Olga Davis filed a wrongful death action against Bulger and Flemmi in Norfolk County Superior Court in which she sought equitable liens on against the property of Bulger and Flemmi, including any remaining interest Bulger had in the Mass. Millions lottery ticket.
3. Marion Hussey
Marion Hussey learned in January 2000 of James Bulger's possible culpability in her daughter's death when federal authorities unearthed Deborah Hussey's body using information provided by Kevin Weeks. The body was not positively identified until six months later. Marion Hussey filed a wrongful death action in Norfolk Superior Court on February 23, 2001 against Bulger and his associates. She also sought equitable liens against the property of Bulger and Flemmi, including any remaining interest Bulger had in the Mass. Millions lottery ticket.
E. State Court Action Regarding the Davis and Hussey Claims
Both Davis and Hussey sought preliminary injunctions and equitable liens to enjoin the State Lottery Commission from paying any past or future one-sixth shares of the lottery tickets to the Bulgers, Weeks, or Jean Holland. In that action, the state trial court found that Davis and Hussey demonstrated a reasonable likelihood of success on the merits in their respective wrongful death actions and were therefore entitled to "as strong an equitable lien on said proceeds as this Court, pursuant to its equitable powers, may grant. . . ." The court then issued an order to the State Lottery Commission pursuant to Mass. Gen. Laws ch. 10 § 28 to hold James's Bulger's one-sixth share from July 2001 through and including July 2010 in an escrow account for Davis and Hussey "to the extent permissible with the civil forfeiture currently in place." The Lottery has taken the position that the "Superior Court Order is not consistent with the Federal Court Civil Forfeiture Order, and, therefore, the Lottery is bound by the 1996 Civil Forfeiture Order to pay James J. Bulger's One Sixth interest to the United States."
II. Fed.R.Civ.P. 60(b) and the Vacating of Judgments
Although the right to participate in litigation must be established before a claimant may move to vacate a judgment, I will discuss the grounds asserted for vacating the judgment at the outset because the right to participate is futile if the judgment will, in any event, stand. As will appear below, I find any right to participate at this time by these Claimants on the basis of the Weeks' evidence to be futile. Accordingly, I will deny the efforts of the three claimants to intervene.
Fed.R.Civ.P. Rule 60(b) permits relief from a final judgment for certain enumerated reasons. The first five sections of the rule list specific grounds for relief while the sixth section serves as a catchall clause under which a judgment may be vacated "for any other reason justifying relief from the operation of the judgment." A motion under Fed.R.Civ.P. 60(b)(6) is appropriate only under exceptional circumstances and only when none of the other five sections of the rule applies. Liljeberg v. Health Services Acquisition Corp., 486 U.S. 847, 863 n. 11 (1988); Cotto v. United States, 993 F.2d 274, 278 (1st Cir. 1993). The principal argument mounted by the claimants is that the unique facts of this case warrant relief under this catchall clause; the government contends that Rule 60(b)(2) governs and that the claimants' motion to vacate on the basis of the Weeks evidence is thereby time barred.
Fed.R.Civ.P. 60(b)(2) authorizes relief on the grounds of newly discovered evidence which by due diligence could not have been discovered in time to move for a new trial under Rule 59(b).
The rule further requires that motions under this section must be brought within one year of the entry of judgment. In order for evidence to be considered "newly discovered" under Fed.R.Civ.P. 60(b)(2), courts have required that the evidence must have been (1) in existence at the time of trial; (2) such that it could not by the exercise of due diligence be discovered in time to present it in the original proceeding; (3) is more than merely cumulative or impeaching; and (4) is admissible, credible, and of such a material and controlling nature as will probably change the outcome. In re Korean Air Lines Disaster, 156 F.R.D. 18, 22 (D.D.C. 1994); see Parilla-Lopez v. U.S., 841 F.2d 16, 19 (1st Cir. 1988).
The Claimants argue that the Weeks evidence should not be characterized as "newly discovered." They contend that the evidence did not exist at the time of the challenged disposition of this action because the government did not obtain it until 2000, four years after the judgment was entered. Although the fact that Weeks became a witness for the government did not occur until 2000, his testimony about the events was available well before judgment entered. Indeed, as counsel for Marion Hussey candidly notes, Weeks had taken the position in 1994 deposition testimony that the lottery arrangement with Bulger was a lawful partnership. But this view was apparently not known by the government when the instant forfeiture proceeding was begun a year later. The Weeks evidence can fairly be classified as "newly discovered evidence" to the government and the claimants for the purposes of Rule 60(b)(2). Any motion under Rule 60(b)(2) is thus time barred if brought after January 1997.
For his part, John Bulger presents no exceptional circumstances of any kind to support his argument that Rule 60(b)(2) does not apply to his motion to vacate the judgment.
Consequently, John Bulger is time-barred from moving to vacate the judgment. Rule 60(b)(6) may not be used to circumvent the time limit prescribed for Rule 60(b)(2).
Davis and Hussey make the broader argument that, even if the Weeks evidence qualifies as "newly-discovered," the exceptional circumstances surrounding their situation is "something more" that triggers avoidance of the one-year time bar by application of Rule 60(b)(6). Under the Federal Rules, district courts have broad discretion to determine whether such exceptional circumstances warrant the application of the catchall clause provided by Rule 60(b)(6). Ahmed v. Rosenblatt, 118 F.3d 886, 891 (1st Cir. 1997). Unlike other courts which have indicated "that Rule 60(b) motions should be granted liberally," the First Circuit, however, adheres to a "harsher" approach requiring that the circumstances of the case be truly exceptional given the countervailing interest in the finality of judgments. Davila-Alvarez v. Escuela de Medicina Universidad Central del Caribe, et al., 257 F.3d 58, 63-64 (1st Cir. 2001).
Davis argues that the "something more" involved in this action is that it is in the public interest to allow her family to intervene in the case. While she does not allege specific government misconduct in the instant action, she makes general statements of government misconduct in related matters involving Bulger and Flemmi. And Hussey argues that the "government should not reap the benefits of James Bulger's lottery winning without a trial on the merits when one of its agencies . . . emboldened James Bulger to commit any crime with impunity, even murder of young women, because he was a coveted confidential informant." Davis and Hussey argue that but for the FBI's protection of the men who murdered their daughters they would have known of their interests in the lottery proceeds in 1995.
It bears noting that strictly speaking, allegations of misconduct, which fall within Fed.R.Civ.P. 60(b)(3), are also time barred by the Rule's one-year limitation period.
The arguments of Hussey and Davis carry significant emotional force. Indeed, I have reflected at some length to see if that emotional force could be given some legal or equitable voice. I find it cannot. In the absence of some showing that the government was aware at the time forfeiture was sought in this action that Bulger and Flemmi were involved in the deaths of Deborah Hussey and Debra Davis, these claimants stand on the same footing as any litigants who undertake to press tort claims against persons who have at some previous time forfeited property. Such claims present something less than the exceptional circumstances necessary to deploy Rule 60(b)(6) to disturb the finality of a long standing judgment.
I note that all the lottery proceeds to which James Bulger was entitled were forfeited to the United States. Consequently, the judgment cannot properly be said to have some "prospective application," even though the payouts of the proceeds will continue to occur automatically at intervals over a period of years.
III. Conclusion
Rule 60(b), taken in its totality, seeks to balance the need for finality in the court's judgments against the need for accuracy and integrity in the court's process. In doing so, the Rule strikes the delicate balance by barring motions based on newly acquired evidence after a year has passed and by requiring other exceptional circumstances thereafter before a judgment can be reopened. The Claimants cannot avoid the time bar to newly acquired evidence and they have not demonstrated exceptional circumstances in this case sufficient to permit reopening of the judgment.