An appeals court panel threw out a $959 million judgment yesterday for U.S. prisoners of war who say they were tortured by the Iraqi military during the 1991 Persian Gulf War, ruling that Congress never authorized such lawsuits against foreign governments.

The U.S. Court of Appeals for the District of Columbia Circuit overturned a lower court's ruling that said 17 former POWs and 37 family members were entitled to the damages under a federal statute allowing suits involving countries that financed or aided terrorists.

The three-judge panel said the statute allows lawsuits for pain and suffering only 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. So, even though the lawsuit also names Saddam Hussein, he is immune because the POWs sued him for his alleged activities as Iraq's president.

"We are mindful of the gravity of the allegations in this case. That appellees endured this suffering while acting in service to their country is all the more sobering," Judge Harry Edwards said. "Nevertheless, we cannot ignore . . . its impact on the United States' conduct of foreign policy where the law is indisputably clear that appellees were not legally entitled."

The Iraqi government never appeared in U.S. court to argue its case, leading to last July's default judgment, which included $653 million in compensatory damages and $306 million in punitive damages. But the Justice Department intervened after the POWs sought payment from frozen Iraqi assets in the United States. It said President Bush determined in May 2003 that a statute allowing payment from frozen assets was not applicable to Iraq.

Retired Air Force Col. David W. Eberly said he and the other plaintiffs have not decided on their next step. They could appeal to the full court or seek an executive order or a change in the law.