I think it will depend on the lawsuits it will have to proven that the police acted in a negligent manner.
Seeing as there was a man who had just murdered a person walking down a public street with a gun the police did not have much choice.It seems that they told him to stop and he aimed the gun at them and they shot him.You have no way of knowing what the intent was but it is safe to say that the man would have killed anyone that got in his way.
What else could they have done? Stood there and let the man shot them because they do want in any way to hit a bystander? Which means that the gunman could kill them or shoot anyone else and then get another weapon.Should they just have allowed a person that just committed an act of violence a murder in public no less simply walk away?
It is possible that the city may just pay damages to the people that got wounded by the police bullets.That is the best way to deal with the situation.
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