At first the George W. Bush administration argued the lawsuit would reveal state secrets, but a judge denied that motion. In 2008, Congress gave the Attorney General the power to grant retroactive immunity to any telecommunications companies that had cooperated with U.S. intelligence agencies.
The civil liberties groups continued their lawsuit, arguing that the immunity law violated the separation of powers.
But the 9th Circuit Court of Appeals rejected their case, Hepting v. AT&T, last December. The court sided with the Obama administration's lawyers, concluding that Congress acted within its constitutional power when it allowed the telecommunications companies to claim immunity.
The Supreme Court declined to review that decision without comment.
The civil liberties groups are still pursing a separate lawsuit against the NSA itself over the warrantless wiretapping program. That case, Jewel v. NSA, is set for a hearing in District Court in December.
Cindy Cohn, legal director for the Electronic Frontier Foundation, said she is disappointed in the decision because it lets the telecom companies "off the hook for betraying their customers' trust and handing their communications and communications records to the NSA without a warrant."
But she said the group will continue its legal fight with its case against the NSA.
"The government still claims that this massive program of surveillance of Americans is a state secret, but after eleven years and multiple Congressional reports, public admissions and media coverage, the only place that this program hasn't been seriously considered is in the courts—to determine whether it's legal or constitutional," she said. "We look forward to rectifying that."
—Updated at 2:23 p.m.