The Supreme Court (search) on Monday declined to consider whether U.S. prisoners of war who say they were tortured during the 1991 Gulf War (search) should collect a $959 million judgment from Iraq.

The justices let stand a lower court ruling that threw out the lawsuit by the 17 former POWs and 37 family members. That ruling, by the U.S. Court of Appeals for the D.C. Circuit (search) last year, said Congress never authorized such lawsuits against foreign governments.

The dispute pitted the Bush administration, which argued the money was needed to rebuild Iraq, against former service members.

The decision by the appellate court "runs roughshod over decades of United States dedication to the laws of war, and sends a message to United States military personnel that while they protect their country, their country will not protect them," wrote the National League of POW/MIA Families (search) in a friend-of-the-court filing.

The administration countered that the courts should defer to the executive branch on foreign policy decisions. It suggested in filings that the president may seek compensation for the POWs through diplomatic means once the new Iraqi regime is "firmly established."

At issue was a 1996 federal law that allows Americans to collect damages for hostage-taking, torture or murder committed by officials of foreign states who are designated as "state sponsors of terrorism" by the State Department. At the time, Iraq was listed as one such state.

The 17 POWs filed their lawsuit in 2002, alleging that they endured severe beatings, starvation, electric shock, threats of amputation and dismemberment and continual death threats.

Nearly 125 pages of the complaint detail the servicemen's stories, including those of Marine Maj. Michael Craig Berryman, who said his legs were beaten with a metal pipe and a wooden ax handle; Marine Col. Clifford Acree (search), who said he was so near starvation he could "feel his body consuming itself;" and Navy Cmdr. Lawrence Slade, whose body was described as so blue from bruises that it was "as if he had been dipped in indigo dye."

The Iraqi government never appeared in U.S. court to argue its case, leading to the default judgment in 2003 that the POWs planned to obtain from $1.7 billion in assets frozen by the U.S. government.

By then, however, the U.S. had invaded Iraq and toppled Saddam Hussein from power. Soon after, the Justice Department intervened in the lawsuit, saying the money was needed to rebuild Iraq.

Government lawyers also argued that the POWs weren't entitled to the judgment because President Bush made an official determination in May 2003 that a statute allowing payment from frozen assets wasn't applicable to Iraq because it no longer supported terrorism after Saddam was overthrown.

The D.C. appeals court agreed, saying the federal statute only allows lawsuits for pain and suffering if they are filed against agents and officers of those foreign states responsible for the torture who are not acting on behalf of their government.

The case is Acree v. Iraq, 04-820.