After the NSA domestic spying story broke late last year, the Electronic Frontier Foundation filed suit not against the government, but against AT&T, which is accused of collaborating in the wiretap scheme. The US government intervened in the case on May 13, moving for dismissal or summary judgement based on the state secrets privilege. The federal government had played the state secrets card over 60 times since first unveiling it in the 1950s, prevailing in all but a scant handful of cases. In a ruling handed down today by in the US District Court of the Northern District of California, Chief Judge Vaughn R. Walker has denied the government's motion (PDF of the decision).

In his ruling, Judge Vaughn Walker was critical of the government's assertions that allowing the case to move forward would jeopardize state secrets. "To defer to a blanket assertion of [state] secrecy here would be to abdicate that duty, particularly because the very subject matter of this litigation has been so publicly aired. The compromise between liberty and security remains a difficult one. But dismissing this case at the outset would sacrifice liberty for no apparent enhancement of security."

According to allegations first raised in the New York Times, AT&T allowed the NSA to install traffic monitoring equipment in its San Francisco and other facilities across the nation. With the equipment in place, the NSA is able to sift through large numbers of phone calls in the US. The government argued that airing the allegations contained in the lawsuit would harm the national security interests of the US.

Judge Walker disagreed, saying that if the government has been truthful in its disclosures, divulging information on AT&T's role in the scandal should not cause any harm to national security. And if it hasn't been truthful? "The state secrets privilege should not serve as a shield for its false public statements," he wrote. "In short, the government has opened the door for judicial inquiry by publicly confirming and denying material information about its monitoring of communication content."

The government is expected to appeal the decision, but if Judge Walker's decision holds up, the case will move forward.