It's been three years since the filing of a suit against the FBI after agents put several Muslims on the No Fly list to retaliate against their refusal to be conscripted as a confidential informants spying on other Muslims; the FBI's illegal retaliation cost their victims their jobs, subjected them to harassment, and cut them off from visits to family overseas.
The FBI and Department of Justice don't dispute the fundamentals in this case: that FBI officers placed Muslims on the No Fly list in retaliation for their refusal to cooperate (and not because they were believed to be a security risk), and that this was illegal.
However, they do object to their victims ability to sue individual FBI officials for their illegal actions; the government's lawyers asked the Second Circuit Court of Appeals to find that the Religious Freedom Restoration Act (RFRA) immunizes corrupt officials from legal consequences of lawbreaking, limiting victims to suing agencies, rather than agents.
The court disagreed. The FBI's victims' suit against the officers who wronged them can proceed to the next step.
Having decided the lawsuit can continue, the Appeals Court decides it doesn't need to reach a finding on the agents' qualified immunity assertions. This will be handled on remand by the lower court, which will first have to make this decision before deciding what (if any) damages the plaintiffs are entitled to.
This is far from a victory for the plaintiffs but it does open the door for similar lawsuits against federal officers for harassment and intimidation tactics deployed in hopes of turning lawful residents and visitors into government informants. Raising the possibility of a successful lawsuit above the previously-presumed zero percent should hopefully act as a minor deterrent against future abuses of power.