Deputy Solicitor General Gregory Garre, representing the government, argued that letting the case go to trial, "would reveal the sources, methods and operational details" of government intelligence activities. The alleged monitoring is part of more rigorous surveillance practices put in motion after the terrorist attacks of 11 September, 2001.

After a two-and-a-half hour hearing, the US Court of Appeals for the 9th District, in San Francisco, said it will consider the dismissal motion as well as a one in a second lawsuit also challenging the NSA programme.

But Appeals Court judges Michael Daly Hawkins, Margaret McKeown and Harry Pregerson, peppered Garre with questions, challenging his argument that the state secrets privilege trumps the right of the plaintiffs to have their case heard.

Pregerson asked Garre how a court is to decide whether something the executive branch claims is a state secret is a secret, if the executive branch won't reveal what it claims is a secret.

"Who decides what's a state secret? Are we just a rubber stamp? We're just supposed to take the word of the executive?" Pregerson asked.

Garre responded that the court should give "the utmost deference" to the executive branch's claim that something is a state secret, but acknowledged that it is not an "absolute deference".

The EFF says that AT&T, at one of its offices in San Francisco, diverted internet traffic, including emails and Voice over IP (VoIP) phone calls, to a separate room in which NSA-authorised people monitored the network traffic. Robert Fram the attorney for EFF, said that just the act of diverting that traffic into a room controlled by the NSA proved their case against AT&T and that they would not have to try to risk violating the state secrets privilege by trying to disclose what was done with the information.

But Garre, in rebuttal, argued that if the surveillance done in that room was approved by a warrant, then there is no violation by the government or AT&T in diverting internet traffic to that surveillance room.

The second case is that of the Al-Haramain Islamic Foundation versus President George W. Bush, which claims the government engaged in warrantless surveillance of their organisation, in violation of its constitutional rights.

The appeals judges gave no indication when they might rule on the motion to dismiss. Lee Tien, an EFF staff attorney, said given the notoriety of the case, the judges could render a decision soon, but at the same time, given the gravity of the issues, they might take more time.

Retirement speculation has circulated since he forfeited the powerful speaker's post when Republicans lost control of the House in last year's elections. Hastert, 65, declined to run for minority leader, taking on a role as elder statesman among Republicans.

In his release, Hastert said his accomplishments as a congressman for his northern Illinois district and as House speaker weren't his own doing, but happened because of support from constituents, friends and colleagues.

"We worked together to pass legislation to provide a service or to meet the need or those we served," he said. "We fought for our beliefs and worked to improve our communities, our district and our country."

Hastert's retirement has local Democrats starting to boast they can win another congressional seat, even as the GOP vows it won't easily give up a seat it has held for two decades. Hastert was considered by many to be unbeatable in his northern Illinois district.

"Any Democrat thinking of getting into this race does so at his or her own peril," said National Republican Congressional Committee spokesman Ken Spain.

A Hastert vacancy is the second in Illinois that Republicans would have to contend with because retiring Rep. Ray LaHood is giving up a central Illinois congressional seat controlled by the GOP for nearly 90 years. LaHood will leave when his term ends in January 2009.

National Republicans "now have to defend another open seat in a blue state where the president is incredibly unpopular," said DCCC spokesman Doug Thornell.

Thornell said a race to replace Hastert would be a "a real opportunity" for Democrats in a "competitive district." The district stretches from Hastert's Plano home south of Chicago all the way to the Mississippi River.

Some local Democrats say they might snag Hastert's district away from Republicans because the populated areas are leaning more Democratic as people migrate there from the heavily Democratic city of Chicago in search of less expensive housing. They also point to last year's election, when two Democrats from Hastert's district won open seats in the Illinois Senate that had been held by Republicans.

"Times, they have a-changed," said state Sen. Michael Noland, one of those Democrats who now represents the Elgin area west of Chicago.

President Bush carried the district in 2004 with 55 percent of the vote.

Woodbury admitted fatally shooting James Walker, manager of the Army Barracks outdoors gear store in Conway, on July 2, along with two customers, William Jones, 25, and his friend Gary Jones, 23.

Woodbury gave short answers in Merrimack County Superior Court as Fitzgerald and public defender Caroline Smith reviewed his history of mental problems, including bipolar disease, and his understanding of the process and his options.

"I'm pleading guilty because I am guilty," he said.

He apologized to each victim by name, and to their families.

But Walker's father, also named James, told him, "You are a coward, a thief and a cold-blooded murderer."

Woodbury, of Windham, Maine, was released May 4 from the Maine State Prison after serving five years for robbery and theft. Authorities say he left the state a month later, heading south with two teenage sisters in a car allegedly stolen from their mother.

Woodbury is accused of robbing a bank in Florence, S.C., on June 6; breaking into a million-dollar home in St. Simons Island, Ga., and then setting it on fire June 12; and holding up a clothing store June 19 in Chattanooga, Tenn., wielding a knife in a scuffle with the shop owner's son before escaping.

Both sisters eventually broke away from Woodbury, one of them hiding from him in a gas station restroom the day before the Chattanooga robbery.

After his arrest for the murders, Woodbury told authorities he thought Walker, 34, was reaching for a weapon, so he shot him. He said he then shot the other two men because they got in his way. Relatives said William Jones of Walpole, Mass., and Gary Jones, of Halifax, Mass., were not related but were as close as brothers.

Woodbury complained after his arrest that he had warned prison officials in Maine he would be a danger.

"I reached out, asking for help. I reached out and told them I need medication. I reached out and told them I shouldn't be out in society. I told numerous cops, numerous guards," Woodbury told reporters outside a courthouse on July 5.

Maine authorities said Woodbury had access to a wide variety of mental health services.

When the judge declined to let Woodbury speak a second time on Friday, he scribbled a sign and pointed it toward the family members. "U have a lawsuit," it said.

A relative of one victim had said Woodbury pleaded guilty in order to choose his prison, but Jeffery Strelzin, head of the criminal division in the Attorney General's Office, said Woodbury was promised nothing in return for his plea.

Before being sentenced, Tocchet told Burlington County Superior Court Judge Thomas S. Smith: "I'm sorry to the court, my family and friends I was involved in this."

Tocchet, 43, partnered with former New Jersey state trooper James Harney and another man in a sports betting venture they ran for five years.

Harney, who pleaded guilty on Aug. 3, 2006, was sentenced two weeks ago to five years in jail. He could be eligible for parole in about a year. Tocchet remains on indefinite leave from his job with the Coyotes.

Dura Automotive Systems Inc. has received U.S. Bankruptcy Court approval for the $160.2 million sale of its Atwood Mobile Products unit and an equity plan with Pacificor LLC to support its reorganization.

Dura, which filed for bankruptcy in October 2006 in Delaware, announced the approvals late on Wednesday. It expects to emerge from court protection in the fourth quarter.

The agreement with Pacificor provides a $140 million to $160 million commitment and would make Dura a privately held company upon its emergence from Chapter 11, with protections for minority shareholders, Dura said.

Several parties objected to an earlier equity plan led by Pacificor, but Dura filed an amended agreement earlier this week to address the objections.

Private equity firm Insight Equity is acquiring the Atwood unit from Rochester Hills, Michigan-based Dura. Atwood is based in Elkhart, Indiana.

Computer maker Dell will reduce more than four years' worth of earnings by up to $US150 million ($A183.52 million) after an internal probe found the company misled its auditors and manipulated results to meet performance goals.

The struggling company said today that its net income for the restatement period will be reduced by between $US50 million and $US150 million ($A61.17 million and $A183.52 million), or two cents to seven cents a share.

The largest reductions in quarterly profits were expected to be in the first quarter of fiscal 2003 and the second quarter of fiscal 2004, each lowered between 10 per cent and 13 per cent.

Dell will restate all of fiscal 2003 through 2006 and the first quarter of fiscal 2007.

The investigation, which began in August 2006 and evaluated more than five million documents, "identified evidence that certain adjustments appear to have been motivated by the objective of attaining financial targets," Dell said.

Round Rock-based Dell added that unspecified terminations, reassignments, reprimands, increased supervision, training and financial penalties either have or will be taken as a result.

"We are committed to achieving and maintaining a strong control environment, high ethical standards and financial reporting integrity," Chairman and Chief Executive Michael Dell said in a statement.

"This commitment will be communicated to every Dell employee and external stakeholder. It is accompanied by renewed management focus on decision-making and processes intended to drive long-term shareholder value."

The Securities and Exchange Commission's investigation into some of Dell's accounting and financial reporting practices is ongoing, the company said.

Dell said the findings would not have a material impact on second-quarter results, which are scheduled for release on Aug. 30.

Dell has issued only preliminary financial results for the four most recent quarters and has not filed its annual report for the fiscal year that ended on February 2 because of the ongoing investigations.

With the internal probe complete, Dell said it expects to file the past-due documents by the first week of November. Its annual shareholders meeting is scheduled for December 4.

Dell still faces shareholder lawsuits, and federal prosecutors in New York subpoenaed documents on the company's financial reporting since 2002.

Dell is the world's second largest PC maker, having recently lost the top ranking to Hewlett-Packard Co.

Dell shares dropped 37 cents, or 1.4 per cent, to close at $US25.93 before the announcement was made.