A federal judge in California ruled on Tuesday that five states may continue their investigations of allegations that AT&T participated in a National Security Agency wiretapping program. Each of the five states—Missouri, Maine, New Jersey, Connecticut, and Vermont—have launched investigations under their state laws concerning AT&T's alleged cooperation in large-scale surveillance programs. State regulators sought information about the companies' activities, including whether such a program existed at all, and if so, how many customer records had been released and what information they contained.

The Bush administration intervened in the case, arguing that the states' demands conflict with federal law, intrude on the federal government's authority over national security, and risk divulging sensitive state secrets. Government lawyers urged that the case be dismissed at the outset in the interest of national security.

Judge Vaughn R. Walker rejected the first two arguments. He held that states have long had the power to regulate telecommunications companies and that merely demanding information from AT&T did not run afoul of federal law. He also ruled that there is no reason to expect that the states' actions, which are focused on traditional regulatory concerns like privacy, will interefere with the federal government's conduct of foreign policy.

However, Walker declined to rule on the state secrets issue. On that question, Walker deferred to the Ninth Circuit Court of Appeals, which is currently considering a similar argument in Hepting v. AT&T, the Electronic Frontier Foundation's class action lawsuit against AT&T for sharing its customers' confidential information with the government.

In the Hepting case, also heard by Judge Walker, the government asserted that the very existence of the NSA wiretapping program is a state secret, and so any litigation regarding it must be dismissed at the outset to avoid disclosing sensitive details of the program. Judge Walker rejected that argument last year, and the case is now before the Ninth Circuit Court of Appeals. If the Ninth Circuit agrees with Judge Walker (and if the Supreme Court doesn't intervene), then the lawsuit will go forward. But a final resolution of the case is likely to take several years.

Another challenge to the NSA's program, this one spearheaded by the ACLU, was rejected by a different appeals court earlier this month on the grounds that the plaintiffs lacked standing to bring the lawsuit. The government successfully argued that the ACLU could not demonstrate that any of the individual plaintiffs in the case had actually been spied on. Both the EFF lawsuit and the state investigations have arguments to sidestep that objection. EFF has a sworn statement from an AT&T employee about the existence of a secret room in AT&T's San Francisco facilities that is limited to NSA personnel. According to the statement, AT&T has diverted the vast majority of the traffic that goes through its San Francisco network to the NSA room, making it likely that the plaintiffs—who are AT&T customers in the San Francisco area—had their communications intercepted.

As for the state regulators, they are making use of their existing regulatory authority over telecommunications providers in their states, so there are no standing concerns. However, once the Ninth Circuit hands down its ruling on the state secrets issue, AT&T and the government will have the opportunity to argue that the appeals court ruling in that case precludes the disclosure of some or all of the information sought by the regulators.

We have also covered a third challenge to the program. That case involved an Islamic group with alleged ties to terrorism that was inadvertently given classified information alluding to the NSA's wiretapping program. That case, too, sidestepped the standing objection because the plaintiffs have direct evidence that their communications were intercepted by the secret program.

Litigation is likely to drag on for several years. This week's ruling merely cleared the way for state regulators to begin their investigations, and the Ninth Circuit's ruling will merely determine whether EFF can begin the discovery process in its subsequent lawsuit. If EFF prevails in its lawsuit, or if the regulators uncover evidence that AT&T violated state laws, those decisions will almost certainly be challenged by AT&T or the government. And if a court ever orders the program (or AT&T's participation in it) shut down, the issue would likely find its way to the Supreme Court. In all likelihood, the controversy will outlast the Bush administration.

Congress has also been actively investigating the issue. In May, Rep. Silvestre Reyes (D-TX), the chairman of the House Intelligence Committee, announced his intention to investigate the phone companies' involvement in NSA's surveillance programs. And in June, the Senate Judiciary Committee subpoenaed the Bush administration regarding the program. The administration will almost certainly oppose Congressional efforts to uncover details of the program, making it likely that any standoff with Congress will also outlast the Bush administration.