A federal appeals court has opted to stay out of a dispute over whether a Boston federal prosecutor committed a professional breach by withholding exculpatory evidence in a racketeering trial.

A special panel comprising three U.S. district court judges had decided in 2011 not to impose sanctions on Assistant U.S. Attorney Jeffrey Auerhahn. The Massachusetts Office of the Bar Counsel appealed. But the U.S. Court of Appeals for the First Circuit ruled on Monday that the bar counsel lacked standing to bring the appeal.

The effect of the ruling in In re Auerhahn was to leave intact the special panel’s ruling.

“We hold that Bar Counsel was not a party to Auerhahn's disciplinary proceedings and thus may not appeal the Panel's decision,” the First Circuit said in an opinion by Judge Jeffrey Howard, joined by Judge Juan Torruella and Seventh Circuit Judge Kenneth Ripple, who sat by designation.

“Under the Local Rules, Bar Counsel was appointed as ‘counsel,’ not as a party,” Howard wrote. “Nor does Bar Counsel's name appear in the caption of the case. Unlike a prosecutor, Bar Counsel was appointed to assist the district court in carrying out its own disciplinary proceedings—a task that the district court could have assigned to any member of its bar.”

“What little law exists the panel cited and followed,” said Michael Ricciuti, a partner in K&L Gates' Boston office who represented Auerhahn.

Former District of Massachusetts Chief Judge Mark Wolf, now a senior judge, found in 2005 that Auerhahn failed to disclose that a government witness had recanted statements about two alleged mobsters' involvement a murder during proceedings against them during the early 1990s. The disclosure forced the release of Vincent Ferrara and Pasquale Barone from lengthy prison terms.

A U.S. Department of Justice's Office of Professional Responsibility investigation concluded that Auerhahn acted with reckless disregard and used poor judgment. His superiors issued a private written reprimand, but that didn’t satisfy Wolf, who referred the matter to the bar. The bar counsel's office sought a two-year suspension.

District of Massachusetts judges George O'Toole Jr., William Young and Rya Zobel participated in the special three-judge federal panel that decided, 2-1, not to impose additional sanctions. Their ruling didn’t indicate which two judges were in the majority.

According to Ricciuti, Auerhahn stood accused of perjury at one point, but bar counsel dropped that allegation after conducting its own investigation.

First assistant bar counsel Nancy Kaufman said the office was disappointed in the ruling and the court’s refusal to unseal the record.

“We argue that the panel didn't accurately state the evidence. The public ought to make that decision on its own,” she said.

In a written statement, Boston U.S. Attorney Carmen Ortiz welcomed the outcome. “This has been a very long process,” it said. “We are pleased that the First Circuit has issued its decision bringing this matter to a close.”

Sheri Qualters can be contacted at squalters@alm.com.