A federal judge has refused to set aside a $98 million jury verdict returned against the District last fall in the case of Eric Butera, the informant who was slain while attempting to assist D.C. police in the Starbucks triple slaying investigation.

Turning down a request from the D.C. government, Senior U.S. District Judge June L. Green said she saw no reason to strike the jury's award, modify it or order a new trial. The damages were awarded by a jury in October to Terry Butera, the informant's mother, marking the largest civil judgment ever returned against the D.C. government.

"The Court finds nothing . . . to justify disturbing the judgment in this case," Green wrote in a 40-page ruling.

In a further blow, the judge ruled that the D.C. government must pay nearly $700,000 of Terry Butera's legal fees, plus a still-undetermined amount to cover the lawyers' expenses. Butera's attorneys have sought reimbursement for $193,000 in expenses.

Lawyers with the D.C. corporation counsel's office had asked Green for relief last month as a first step in what could be a lengthy appellate process. The case now is headed for the D.C. Circuit Court of Appeals.

"We will be appealing this case," Corporation Counsel Robert R. Rigsby said yesterday. "We grieve for the family. But we believe there were errors made in this particular case, and we will appeal the judge's decision."

Peter C. Grenier, an attorney for Terry Butera, said Green's decision "completely went our way," adding, "I think the ruling was sound and well grounded in the law."

Eric Butera, 31, was robbed and beaten to death in December 1997 by three men after he tried to make an undercover drug buy at a Southwest Washington row house. Police set up the operation in hopes of developing information about the July 1997 killings of three people at a Starbucks coffee shop in Northwest Washington. Butera, who was trying to overcome a history of drug abuse, had gone to police with what appeared to be a viable tip. He said he had overheard people in the row house talking about the slayings when he bought drugs there during the summer.

Police then gave him $80 in marked money and sent him back to the house to buy crack cocaine, hoping they could then get a warrant to search the place for Starbucks-related evidence. Butera never even got into the house. He was attacked and beaten by three men with no connection to the killings, authorities said. Another suspect later was arrested in the Starbucks case who had no ties to the row house, they said.

Although D.C. police remained in the area to monitor Butera's activities, they were not close enough to see him and did not realize he was in trouble until 40 minutes later, when a neighborhood resident called 911. During a two-week trial, Grenier contended that police failed to take basic steps to protect Butera and presented testimony from an expert witness, James Bradley Jr., who said the four police officers working with Butera failed to meet national standards of protecting informants. He said that Butera should have remained in sight of police and should have had a monitor or other surveillance device and that a time limit should have been set on the operation.

In seeking to overturn the verdict, D.C. government lawyers said that Bradley's testimony was not credible and that the jury let emotion cloud its judgment.

Green rejected both claims. She ruled that Bradley, a former D.C. police official, based his opinion on standards set by the Drug Enforcement Administration and other law enforcement agencies. She said the jury listened intently to the evidence presented in the trial and that the judgment, while large, did not appear to be swayed by emotion.

Sources familiar with the matter said D.C. officials have made overtures to settle the case in recent weeks without success. Previous settlement efforts likewise proved fruitless. The D.C. government offered Terry Butera $150,000 to settle the lawsuit before the trial, moved up to $500,000 after the trial began and finally upped the amount to $1.5 million just before the jury returned its $98 million verdict.

CAPTION: Eric Butera was killed while acting as a police informant in Starbucks slayings.