A federal judge has issued a very public smack down of the Obama Administration's handling of civil suits filed against the Palestinian Authority on behalf of victims of terrorism, Politico reports.

The case, Gilmore v. Palestinian Interim Self-Government Authority, arose from the October 30, 2000 terrorist attack at the National Insurance Institute in Jerusalem, Israel. During the shooting, undertaken in concert by members of "Force 17" of the Palestinian Authority ("PA") and an armed faction of the Palestinian Liberation Organization ("PLO") known as "Tanzim," American Esh Kodesh Gilmore was murdered. Gilmore's family sued the PA the following spring under the Anti-Terrorism Act of 1991, which allows U.S. victims of terrorism to bring civil suits against the perpetrators of the attacks.

Following years of stall tactics and a filing in which the defendants explained it would "not appear or participate in any further proceedings in the case," the court entered the second default judgment in favor of the plaintiffs on January 29, 2007. As U.S. District Judge Gladys Kessler explained in looking back on these tactics:

"this was not a case of mere delay, but a case where defendant's deliberate litigation strategy was to refuse to defend on the merits."

The defense asked the court to reconsider the default judgment 10 months later.

In considering this motion, as the court explained, there were a number of competing considerations, including: (i) the potential prejudice to the plaintiff; (ii) any willfulness on the part of the defendant; and (iii) "whether there is any significant public interest and foreign policy issues presented in this case."

Although the court was more than qualified to issue a ruling on the first two factors, recognizing the institutional competencies of the Executive in matters of foreign policy, the court requested that the administration file a "statement of interest" in the case.

In response to the court's request, the Obama administration submitted a two paragraph filing which stated, in part:

"The United States supports just compensation for victims of terrorism from those responsible for their losses and has encouraged all parties to resolve these cases to their mutual benefit. At the same time, the United States remains concerned about the potentially significant impact that these default cases may have on the defendant's financial and political viability."

After reviewing all the arguments, Judge Kessler granted the defendant's motion and vacated the default judgment on Monday. In doing so, she took a swipe at the administration, calling its response to her request for assistance in resolving the dispute "particularly unhelpful in resolving this difficult motion." In fact, as the court intimated, in completely dodging the issue, the government left the court to speculate on the foreign policy implications. As Judge Kessler wrote:

"it is fair to say that making any predictions about developments in the Middle East is a risky and speculative undertaking, far beyond the competence of federal judges."

Without question, this case has revived an issue that has dogged the last four administrations, Democratic and Republican alike—how to balance the need to compensate American victims of Palestinian terrorism without bankrupting the only remaining "legitimate" government of the Palestinian people. Whatever the "right" answer is to this question, Judge Kessler is absolutely correct that she is not qualified to make the decision. Instead, the administration must make the difficult choice.