An 11-member Chicago court has declined to hear an appeal by three journalists whose interviews with an FBI informant were seized by "Real IRA" leader, Michael McKevitt, for use in his unsuccessful defence at the Special Criminal Court on terrorism charges.
More than 21 major news organisations, including CNN, the New York Times and Associated Press, had written a strongly-worded request to the appeal panel, asking for a hearing of the case.
However, the appeal court panel had now ruled that it will not hear the case, and Mr McKevitt's right to seize the tapes remains in place.
A three-judge appeal court had ruled in August that Mr McKevitt had the right to subpoena the tapes of interviews with FBI informant, David Rupert, who testified against Mr McKevitt at his trial on charges of directing terrorism.
Many of the major news organizations in the US filed a joint "friends of the court" brief in August in which they called for a full "en bloc" hearing of the case by at least 11 judges on the 7th Circuit Appeal Court in Chicago.
Under federal law, an appellant whose case is turned down by a three-judge appeal court can apply to have the case reheard by the entire bench of appeal judges on that circuit.
The media organisations, which include Time magazine, the New York Times, Turner Broadcasting, NBC, the LA Times, CBS, Hearst Newspapers, Fox News and the Washington Post, argued that granting Mr McKevitt the right to the tapes was a "radical" decision that went against judgements in most appeal court circuits in the US.
They argued in their briefing that witnesses such as Mr Rupert will refuse to speak to the media if their words could be used against them in court.
Three journalists, Mr Abdon Pallasch and Robert C. Herguth, of the Chicago Sun-Times, and Mr Flynn McRoberts, of the Chicago Tribune, interviewed Mr Rupert for a planned book about Mr Rupert's infiltration of the "Real IRA".
Mr Pallasch said yesterday that he was very disappointed that the full appeal court panel will not hear the case.
In August, the 7th Circuit Appeal Court unanimously rejected the concept that the journalists in the McKevitt case had a greater right to protect their sources than other members of the public. It also suggested that laws in several US states that protect journalistic privilege might be unconstitutional.
The journalists had taken the appeal to the three-judge court after a federal district court forced the three journalists to hand over the interview tapes to Mr McKevitt's lawyers on July 2nd last.