Government lawyers trying to fend off a much-watched warrantless wiretapping case in federal court now face sanctions and the possibility of a judgment that the United States committed illegal surveillance (pdf), following an order filed on Friday by Northern District of California Chief Judge Vaughn Walker (.pdf).

Walker, bringing to a head months of volleying between the government, the plaintiffs and himself, ordered Justice Department lawyers to explain why he should not essentially enter a default judgment against the government for violating the Foreign Intelligence Surveillance Act by spying on the Al-Haramain Islamic Foundation.

The government has refused to obey court orders by repeatedly stonewalling Walker's attempt to move the case forward, Walker wrote.

If he rules as threatened, Al-Haramain would win without forcing the government to acknowledge surveillance.

"In some ways, this might be entirely satisfactory to the government," said Jon Eisenberg, who represents the defunct Islamic charity.

A spokesman for the Justice Department's Civil Division declined to comment.

The government unwittingly set the Al-Haramain litigation into motion years ago by accidentally disclosing to the charity a classified document that reportedly shows a summary of intercepted phone conversations.

The government retrieved the document and has asserted the state secrets privilege to try to dismiss the Al-Haramain case, on the grounds that without the classified information, Al-Haramain can't prove surveillance.

Walker has locked horns over the document with Justice Department lawyers, who have repeatedly refused to allow Eisenberg or any other plaintiffs attorney access, despite orders from Walker instructing the two sides to find a way to use the document to litigate the case.

Government officials, including the director of the National Security Agency, are refusing to cooperate "because, they assert, plaintiffs' attorneys do not 'need to know' the information that the court has determined they do need to know," Walker wrote.

If Walker rules against the government without ever bringing the document into the case, then it will remain a secret, said Eisenberg, who has viewed the document. But he added that his only concern is getting to the merits of the case, and that he has "no interest" in getting at the classified information.

In his Friday ruling in Al-Haramain Islamic Foundation v. Obama, 07-0109, Walker quoted from a key order he made in January, in which he granted Al-Haramain's motion to access the document in a limited and classified setting. The government wouldn't engage with the plaintiffs' motion to bring the document in as evidence and continually asserted "legal positions already specifically rejected by the court in previous orders."

Walker's order to show cause proposes taking away the government's chance to fight the plaintiffs' threshold argument that they were spied on, and moving on to decide damages against the government.

Walker set the hearing for June 3.

In a May 15 joint case management statement, DOJ trial attorney Anthony Coppolino wrote that the government still disagrees with Walker's underlying ruling, that the states secrets privilege is pre-empted by FISA .

The government has tried to appeal Walker's rulings to the 9th U.S. Circuit Court of Appeals to no avail. Coppolino wrote that if Walker were to disclose the document to the plaintiffs'counsel, the government would appeal that decision as well.

"It sounds like Judge Walker's considering various options that would enable a successful conclusion of this case without jeopardizing national security," Eisenberg said.

"I'm beyond trying to predict what the Department of Justice does in this case."