The federal government may spy on Americans’ communications without warrants and without fear of being sued, a federal appeals court ruled Tuesday in a decision reversing the first and only case that successfully challenged President George W. Bush’s once-secret Terrorist Surveillance Program.

“This case effectively brings to an end the plaintiffs’ ongoing attempts to hold the executive branch responsible for intercepting telephone conversations without judicial authorization,” a three-judge panel of the 9th U.S. Circuit Court of Appealswrote. (.pdf)

The case concerned a lower court decision in which two American attorneys — who were working with the now-defunctal-Haramain Islamic Foundation— were awarded more than $20,000 each in damages and their lawyers $2.5 million in legal fees after a tortured legal battle where they proved they were spied on without warrants.

They sued under domestic spying laws Congress adopted in the wake of President Richard M. Nixon’s Watergate scandal. The government appealed their victory, and the appeals court Tuesday dismissed the suit and the damages.

A pretty major decision was handed down by the 9th Circuit today, but we’re betting that this isn’t going to be the last we’ll hear about this case.