Even after admitting that he was too "glib" in his initial post saying it was "Tough Luck" for a German citizen who was kidnapped and tortured by U.S. government agents who had mistaken him for a terrorist, Captain Ed continues to maintain that "the US can't just allow people all over the world to sue our intel operations to a standstill. It's not the optimal situation, but we do have a national interest in keeping personal-injury lawyers from wrecking our homeland defense systems. That to me outweighs the interest of Masri and the precedent his suit would have set."
What exactly does "sued to a standstill" mean in legal terms? According to Captain Ed's post, el-Masri was "demanding an apology from the Untied [sic] States and 75,000 dollars in compensation." That doesn't sound like an injunction or any other type of interference in the CIA and other intel operations' workings. They can keep kidnapping and torturing anyone they like even if el-Masri wins his suit; they just have to apologize and fork over the cost of a single luxury car to each person whom they get wrong. I devoutly hope that the number they're getting wrong is small enough that $75k to each of them won't bankrupt our defense budget.
If the concern is what would be revealed in a trial where there's a real dispute over whether the CIA got it wrong or not (i.e. whether there was reason to suspect the plaintiff or if this was a true mistaken-identity screwup), the U.S. courts could set a rule that in cases where there's a factual dispute as to whether the plaintiff is in fact under suspicion, the court will refuse the case. However, in cases where the U.S. government would concede at a summary judgment point that it screwed up and the only remaining factual question is the appropriate level of damages, plaintiffs ought to be able to go to trial.
As for the jurisdictional question, we let non-citizens come to the U.S. to sue other governments for their misdeeds under the Alien Tort Statute/ Alien Tort Claims Act and Torture Victim Protection Act. Where should they sue the U.S. government if not in U.S. courts, particularly given the Federal Tort Claims Act? The United States can afford to pay the victims of our mistakes; we cannot afford another datapoint for the perception that we are indifferent to whomever we trample in trying to protect ourselves.