Obama administration shuts down lawsuit to protect U.S. secrets on Iran

Washington (CNN) -- The federal government won a court order Monday to shut down a private lawsuit because it could reveal U.S. government secrets. And the government doesn't have to explain why it's even involved.

The ruling by a federal judge in Manhattan comes in a defamation lawsuit filed by Victor Restis, owner of a Greek shipping company, against a U.S. not-for-profit called United Against Nuclear Iran (UANI), which advocates against Iran's nuclear program.

Restis claims he was defamed in a UANI campaign that alleged his company had ties to the Iranian government companies that are involved in Iran's nuclear program. The Justice Department intervened in the lawsuit citing the "state secrets privilege," which allows the government to shut down legal disputes to protect sensitive national security information.

READ: CIA head says U.S. intel has 'robust' knowledge of Iran nuke program

U.S. District Court Judge Edgardo Ramos ruled the Justice Department made a compelling argument that the lawsuit cannot go forward without potentially exposing U.S. national security secrets. He acknowledged the "harsh sanction" against Restis.

"It is particularly so in this case because the plaintiffs not only do not get their day in court, but cannot be told why," the judge wrote. "However, dismissal is nonetheless appropriate. Simply put, there is no intermediate solution that would allow this litigation to proceed while also safeguarding the secrets at issue."

Restis' lawyers had sought to compel legal discovery -- the turning over of documents and other information -- from the group, its executives, and from Wall Street investor Thomas Kaplan, who Restis' lawyers claim is a funder of UANI.

The government provided no detail of how UANI, Restis or any others involved could have come to possess U.S. national security secrets. It said that an unnamed U.S. government agency believed that "disclosure of the information at issue reasonably could be expected to cause serious damage to the national security."

Kaplan's lawyers claimed he has no information relevant to the case. UANI defended its free speech rights to campaign on the Iran issue.

The court held several secret hearings with government lawyers, but Restis' attorneys were not allowed to attend to challenge the government's claims.

"We are disappointed that some secret relationship between UANI and the government allows UANI to hide from disclosing that association or to defend what has now been proven to be its false and defamatory allegations directed at Mr. Restis and his company," said Restis attorney Abbe Lowell. "We are concerned that, in our court system, such a result could occur on the basis of sealed, one-sided filings and meetings in which we were not allowed to participate."

An attorney for UANI, Lee Wolosky​, welcomed the decision.

"Since its filing we have consistently maintained that Mr. Restis' suit was meritless. United Against Nuclear Iran is a bi-partisan not-for-profit policy and advocacy organization that will not be silenced by intimidation or threat," Wolosky said. "Through economic and social means and through the exercise of their First Amendment rights, the officers and staff of UANI have acted courageously and patriotically in their efforts to prevent Iran from obtaining nuclear weapons."