The family of a Big Island man killed in a horrific ambush in Fallujah, Iraq seven years ago will appeal a federal court decision that dismissed a wrongful death lawsuit filed against the security company formerly known as Blackwater, the family’s attorney said.

Paauilo resident Wesley Batalona and three other civilian military contractors died in a March 31, 2004 ambush. Insurgents led a mob which mutilated and set fire to their bodies before dragging the charred remains through the streets and hanging two from a bridge. Images from the scene were relayed around the world, and the event triggered a massive U.S. military siege known as the Battle of Fallujah.

Marc Miles, a Southern California attorney who represents June Batalona, Wesley Batalona’s wife, told the Star-Advertiser today said the four men who were hired by Blackwater Security Consulting "have been denied their day in court."

Last Friday,  U.S. District Judge James C. Fox entered judgment against the families of Wesley Batalona, Scott Helvenston, Jerko "Jerry" Zovko and Michael Teague, finding that court-ordered arbitration fell apart because neither side was paying the costs of that process.

"The families had lost their case against Blackwater because they were not wealthy enough," Miles said.

In Jan, 5, 2005, Batalona’s family and relatives of the three other contractors filled a wrongful death suit. 

Survivors of the contractors contend Blackwater failed to prepare the men for their mission and didn’t provide them with appropriate equipment, such as a map. The men were sent in Mitsubishi SUVs to escort a convoy of three empty trucks to pick up kitchen equipment for a food company, the lawsuit said. Their survivors argued they should have been given armored vehicles.

A congressional investigation concurred with that view, calling Blackwater an "unprepared and disorderly" organization on the day of the ambush.

Blackwater, however, argued that the men were betrayed by the Iraqi Civil Defense Corps and targeted in a well-planned ambush. The company said the result of the ambush likely would have been the same even if they had stronger weapons, armored vehicles, maps or even more men.

Blackwater countersued the four families seeking $10 million arguing that the families had breached the security guards’ contracts by their wrongful death legal action.

Miles said for years, Blackwater has avoided a trial of these claims against it, through the use of at least five Washington law firms and appeals all the way to the U.S. Supreme Court. 

Miles said after losing the appeals, Blackwater forced the case into private arbitration, knowing it could afford the heavy price tag associated with litigating a case in private arbitration. 

"Our clients never had the ability to pay," Miles added, "and we made it clear from the very beginning."

 The three private arbitrators refused to continue the arbitration session because the families could not afford to pay them, Miles added.

Miles said the families petitioned the North Carolina federal court to allow them to return to the North Carolina state court in order to prosecute their case against Blackwater. 

But Blackwater attorneys asked the federal court to enter a judgment in its favor and end the entire case, despite the evidence never having been presented and no trial ever having been conducted, Miles added, which a federal judge did last week.

"This is a sad day in the American legal system," said another attorney for the four families in a written statement. Daniel J. Callahan added: "Our courts have long been a place where all citizens have equal access to justice.  The ruling here turns that principal on its head.  The families of the decedents are now being denied the ability to present their case against Blackwater simply because they do not have hundreds of thousands of dollars to pay the private arbitrators."  Miles said the appeal should be filed with the 4th federal Court of Appeals in Richmond, Va.,  within 60 days.

"We will take it to the U.S. Supreme Court, if necessary,"  Callahan added.

Katy Helvenston, the mother of contractor Scott Helvenston, said the families couldn’t afford the costs, and she fears the case is over. 

"It’s pretty much destroyed my life," Helvenston said. "I haven’t known one moment of joy since Scotty was slaughtered. I think the worst party is the betrayal from my country. I feel so betrayed."

Following a 2007 shooting in Baghdad, Blackwater changed its management, name and eventually its ownership. USTC Holdings, an investment firm with ties to founder Erik Prince, acquired the company that’s now called Xe Services.. The deal includes its training facility in Moyock, N.C.

The Associated Press contributed to this story.