UPDATE 2-U.S. top court won't review telecom immunity for surveillance

(Rewrites throughout; Adds lawyer comments)

By Terry Baynes

WASHINGTON, Oct 9 (Reuters) - The U.S. Supreme Court onTuesday rejected a challenge to a 2008 federal law grantingimmunity to phone companies for helping the government eavesdropon private phone conversations.

The decision is the latest in which the court has refused toreview government surveillance practices adopted since theattacks of Sept. 11, 2001.

The case involved 33 lawsuits brought against the phonecompanies in 2006 after news reports that the government hadconducted warrantless surveillance.

Phone customers alleged that AT&T Inc , Sprint NextelCorp , Verizon Communications Inc and othersviolated federal and state law.

In reaction to the suits, Congress in 2008 passed Section802 of the Foreign Intelligence Surveillance Act, which gave theAttorney General the power to grant legal immunity to anyoneproviding assistance to the intelligence community.

Then-Attorney General Michael Mukasey used that discretionto block the 33 suits, which were dismissed.

The Electronic Frontier Foundation, the American CivilLiberties Union and others appealed, arguing that Section 802violated the separation of powers doctrine of the U.S.Constitution.

Last December, the 9th U.S. Circuit Court of Appeals in SanFrancisco rejected those arguments, finding the telephonecompanies immune.

Asking the Supreme Court to review that decision, the civilliberties groups said the law allowed the executive branch toconduct "warrantless, suspicionless domestic surveillance"without fear of review by courts, and gave the Attorney Generalsole discretion to decide when eavesdropping was necessary.

The Obama Administration argued that lawsuits against phonecompanies should be dismissed to encourage cooperation inefforts to fight terrorism and help ensure that state secrets bekept under wraps.

The high court, without comment, declined on Tuesday toreview the groups' challenge to the law.

Richard Wiebe, the lead lawyer for the customers, said thedecision reflected the Supreme Court's growing reluctance toreview challenges to the government's national security andintelligence-gathering procedures.

"It's one more example of the court stepping back fromtaking any role in enforcing the rule of law in the war onterror," Wiebe said.

He cited another surveillance case, brought by the ACLUagainst the National Security Agency, which the high courtrefused to review in 2008, along with other torture anddetention cases.

"After 11 years and multiple congressional reports, publicadmissions and media coverage, the only place that this programhasn't been seriously considered is in the courts," Cindy Cohn,the legal director of the Electronic Frontier Foundation, saidin a statement.

The plaintiffs will continue to pursue a parallel caseaccusing the government and its officials of using a "dragnet"against ordinary citizens, which the 9th Circuit had allowed toproceed.

The case is Hepting et al v. AT&T Corp et al, U.S. SupremeCourt, No. 11-1200.

(Additional reporting by Jon Stempel; Editing by ClaudiaParsons)

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