Judge Won't Dismiss Spying Lawsuit

A federal judge on Thursday rejected a government bid to dismiss a lawsuit challenging the Bush administration's domestic spying program, saying it failed to qualify as a "state secret" because it had been widely reported.

U.S. District Judge Vaughn Walker said a case could go forward over AT&T's alleged involvement in President Bush's surveillance program adopted after the Sept. 11 terror attacks.

"The compromise between liberty and security remains a difficult one," Walker wrote in his ruling. "But dismissing this case at the outset would sacrifice liberty for no apparent enhancement of security."

The government invoked the so-called "state secrets privilege" and said the case by Electronic Frontier Foundation should be thrown out because it threatens to reveal state secrets and jeopardize the war on terror.

"It might appear that none of the subject matter in this litigation could be considered a secret given that the alleged surveillance programs have been so widely reported in the media," Walker said in his ruling.

The case is one of dozens nationwide against telecoms and the government alleging they are illegally intercepting Americans' electronic communications without warrants. Thursday's decision was the first to address the state secrets defense.

The Justice Department did not immediately return calls seeking comment.

The lawsuit by the privacy group tests the constitutionality of Bush's asserted wartime powers to eavesdrop on Americans without warrants. The government intervened and said that divulging information about any alleged collusion between AT&T and the government could subject AT&T employees and facilities to attack and would enable terrorists "to communicate more securely."

The legal tactic of state secrets privilege, first recognized by the U.S. Supreme Court in a McCarthy-era lawsuit, has been increasingly and successfully invoked by federal lawyers seeking to shield the government from scrutiny by the courts, from espionage cases and patent disputes to routine employment discrimination lawsuits.

The president confirmed in December that the National Security Agency has been conducting warrantless surveillance of calls and e-mails thought to involve al Qaeda terrorists if at least one of the parties to the communication is outside the United States.

The administration is mum on whether purely domestic calls and electronic communications are being monitored as the suit alleges.

The suit was brought by EFF on behalf of customers of San Antonio-based AT&T. The group accuses the telecom of illegally cooperating with the NSA to make communications on AT&T networks available to the spy agency without warrants.

The EFF asked Judge Walker to rule on whether the president possesses wartime powers to authorize warrantless eavesdropping in the United States without publicly disclosing any classified or sensitive material. The EFF charged that AT&T, which neither confirms nor denies the allegations, practices "wholesale surveillance" of its customers.

Walker also declined to dismiss AT&T from the case.

"AT&T cannot seriously contend that a reasonable entity in its position could have believed that the alleged domestic dragnet was legal," Walker wrote.

The U.S. Supreme Court upheld the state secrets defense as recently as January, when it rejected an appeal from a former covert CIA officer who accused the agency of racial discrimination. And in May, citing the state secrets defense, the government urged a federal judge in Virginia to block a lawsuit by a German national who says he was illegally held and tortured in a CIA-run prison in Afghanistan for four months.

The Supreme Court first recognized the state secrets doctrine in 1953, when it dismissed a lawsuit against the government brought by family members of people killed in a plane wreck while testing secret electronic surveillance equipment.

The case is Hepting v. AT&T Inc., 06-0672.