Damages previously awarded to two attorneys representing a Muslim charity tied to terrorist financing were tossed out this week by a federal appeals court, Politico's Josh Gerstein reports.

The lawyers for the Al-Haramain Islamic Foundation sued after believing they were subjected to warrantless wiretaps. But the government's sovereign immunity protections preclude the $40,000 in damages and $2.5 million in legal fees awarded by a lower court from being assessed, the U.S. Court of Appeals for the Ninth Circuit ruled Tuesday. The attorneys argued that the immunity had been waived, but the court disagreed.

Al Haramain is based in Saudi Arabia and operates throughout the world. Its American branch registered as a non-profit charity in Oregon in 1999. It claimed to "stand against terrorism, injustice, or subversive activities in any form, and oppose any statement or acts of terrorism." But the Treasury Department designated it in 2008 for providing "financial and material support to al Qaida, as well as a wide range of designated terrorists and terrorist organizations."

A jury in Oregon convicted Al-Haramain director Pete Seda in 2010 of filing a false tax return to hide $130,000 in traveler's checks routed the charity that may have ended up in the hands of Chechen militants.