The U.S. Court of Appeals has upheld a jury's verdict that a Senate investigator invaded the privacy of two antipoverty workers in Kentucky in the 1960s, but it overturned damage awards against the estate of the late senator John McClellan (D-Ark.) and a second Senate aide.

A U.S. District Court jury here awarded $1.6 million last year to the two former activists, Alan and Margaret McSurely, for damages growing out of the couple's arrest by armed deputies in Pikeville, Ky., on charges of sedition, and the seizure of books, letters and papers belonging to them.

The incident led the 6th U.S. Circuit Court of Appeals to strike down Kentucky's sedition law and prompted the McSurelys to sue.

The local Kentucky prosecutor, Thomas Ratliff, later turned over some of the McSurelys' papers to a Senate investigator, John Brick, for study by McClellan's subcommittee on the causes of urban riots in the mid-1960s.

Among the papers were love letters to Margaret McSurely from the late Drew Pearson, the syndicated columnist, who had employed McSurely before she was married.

When the papers were returned to the McSurelys in 1968 under court order, according to trial testimony, Brick showed the love letters to Alan McSurely and ordered that he read each one. The McSurelys testified that the incident led to the dissolution of their marriage.

The opinion, issued Friday by a three-judge panel, said there was insufficient evidence that McClellan and the subcommittee's general counsel, Jerome Adlerman, ordered that the papers be returned in that fashion.

The court threw out the jury's verdict that McClellan, Brick and Adlerman had violated the couple's constitutional protections against illegal searches or their First Amendment right of free speech.

The opinion said the law governing immunity against lawsuits for government officials was unclear at the time of the McSurelys' arrest and that the couple's claims of an illegal search must be dismissed.

Evidence regarding violations the couple's First Amendment rights also was insufficient to support the jury's verdict, the court said.

McClellan, Brick and Adlerman died during the litigation. The court said Brick's estate must pay the approximately $105,000 awarded against Brick by the jury.

The McSurelys reached an independent settlement with Ratliff, the Kentucky prosecutor, who was then dropped as a defendant.

The decision, by Judges Abner J. Mikva, Ruth Bader Ginsburg and Kenneth W. Starr, was issued in the name of all three.