In court, the government argued that there should be a narrow exception drawn allowing the case against contractors in this case to go forward "to the extent that a contractor has committed torture" as defined by federal criminal law.
The government said that before the scandal broke there were not proper laws and procedures in place to ensure oversight and accountability of contractors, a circumstance that was changed after the scandal broke.
"The government's position is, in effect, that these prisoners should have their day in court," says Stephen I. Vladeck, a professor of law at American University Washington College of Law. "But that it has fixed the gaps in laws such that in the future a scandal like Abu Ghraib will be dealt with by prosecuting the contractors as opposed to paying damages to the victims."
Vladeck, who signed a brief on behalf of the former prisoners, says there's a "liability gap" in the response to the abuse.
"The reality is, that other than the court martial of a few of the soldiers that are involved, the contractors have thus far been let off the hook," he says.
But Koegel dismisses the government's carving out of some kind of "torture exception" in the case. He says that if the government had evidence of torture committed by the contractors it could have pursued a criminal prosecution under federal law. The former prisoners, he argues, could have availed themselves of an administrative claims process instead of bringing a civil action for damages.
Koegel argues the proposed exception is "unworkable" and "mistakenly attempts to vindicate significant federal interests through the surrogate of state law, which is prohibited by the Constitution."
Some judges on the bench on Friday seemed unclear of the government's position, and one Judge, J. Harvie Wilkinson III, expressed extreme frustration.
Judge Diana Gribbon Motz told the government lawyer arguing the case, "This is the most equivocal brief I've ever read," according to an audio release of the hearing.
Judge Wilkinson repeatedly pressed H. Thomas Byron III, the government lawyer, as to why the government would argue that the case against the contractors should go forward as a complicated civil case when the government that presumably had an understanding of the contractor's involvement had failed to go after the contractors itself.
When Byron argued that after the scandal broke Congress and the Executive Branch found there were not the necessary remedies available for criminal prosecution, Wilkinson responded angrily.
"You are telling me that the government could not go after these people? That there were so many loopholes in federal law that you could not possibly under existing law, given all the different options that federal government has, that you could not possibly hold the contractors to account for torturous acts?"
"I have not said that, " Byron said.
"There are substantial federal interests at stake here, and we believe that pre-emption is the appropriate mechanism to analyze those interests and give them effect with respect to available remedies we think it's relevant in assessing the overall balance of federal interests to recognize that in the wake of Abu Ghraib substantial changes to federal law were made both by Congress, the Defense Department and the Executive Branch," Byron said.