"A federal judge on Thursday rejected a motion by the Bush administration to dismiss a lawsuit against AT&T over its cooperation with a government surveillance program, ruling that state secrets would not be at risk if the suit proceeded."
Update: From EFF which brought the case:
"Today, EFF achieved a critical victory in our case against AT&T. Here are some key quotes from the decision:
p.36, "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."
p.39-40, "If the goverment's public disclosures have been truthful, revealing whether AT&T has received a certification to assist in monitoring communication content should not reveal any new information that would assist a terrorist and adversely affect national security. And if the government has not been truthful, the state secrets privilege should not serve as a shield for its false public statements. In short, the government has opened the door for judicial inquiry by publicly confirming and denying material information about its monitoring of communication content."
p. 68, "Moreover, because the 'very action in question has previously been held unlawful,' AT&T cannot seriously contend that a reasonable entity in its position could have believed that the alleged domestic dragnet was legal.""