• by Wendy Davis  @wendyndavis, July 10, 2025

A divided federal appeals panel has revived a lawsuit by journalists with the El Salvador-based news organization El Faro who sued the Israeli company NSO Group for allegedly installing Pegasus spyware on their iPhones.

In a ruling issued this week, a panel of the 9th Circuit Court of Appeals said in a 2-1 ruling that U.S. District Court Judge James Donato abused his discretion when he dismissed the complaint on the grounds that the journalists should have sued in either Israel or El Salvador instead of California.

The appellate panel returned the case to Donato with instructions to reconsider the journalists' bid to proceed in California.

The new ruling comes in a dispute dating to 2022, when more than a dozen El Faro journalists -- including a U.S. citizen and two U.S. residents -- alleged in a lawsuit that they were repeatedly hacked by NSO Group in 2020 and 2021.

The journalists, who are represented by the Knight First Amendment Institute at Columbia University, alleged that the spyware compromised their safety, their sources' safety, and hindered newsgathering efforts.

NSO Group installed Pegasus to spy on journalists, activists, government officials and others in more than 50 countries, the Washington Post previously reported.

NSO allegedly installed the malware by exploiting vulnerabilities in Apple devices. Once installed, Pegasus allows third parties to secretly activate smartphones' microphones and cameras, and also to access the owners' messages and contacts, phone logs, social media accounts and web browsing activity, the complaint alleged.

The complaint claimed NSO Group violated various federal and state laws, including the federal Computer Fraud and Abuse Act -- an anti-hacking law that prohibits companies from accessing computer servers without authorization.

NSO urged Donato to throw out the case for several reasons. Among others, the spyware manufacturer said the lawsuit didn't have the kinds of connections to the U.S. that would justify proceeding in California.

Donato agreed with NSO, writing in a March 2024 opinion that the lawsuit "belongs in a court in Israel or El Salvador, and not here."

"Fairness, convenience, and judicial economy demand no less," he added. "To conclude otherwise would open the doors of the federal courts to lawsuits by foreign entities for conduct that occurred entirely outside the United States."

The journalists appealed to the 9th Circuit, arguing that Donato gave short shrift to the ways the alleged spyware affected California residents, and involved Apple.

"Defendants’ deliberate and sustained abuse of the software and services of Apple, a California-based company, formed a crucial component of the Pegasus attacks against Plaintiffs," they argued to the appellate court.

They added that the spyware didn't only affect the journalists but also had an impact on El Faro's readers in California.

Outside companies including Google, Microsoft and LinkedIn backed the journalists, arguing in a friend-of-the-court brief that Donato failed to consider "the United States’s and California’s powerful interests implicated by this litigation."

"Both the United States and California have demonstrated their interests in protecting domestic technology companies from foreign hackers by passing federal and state antihacking laws -- the very laws under which plaintiffs bring their claims here," the tech companies argued.