The 2nd U.S. Circuit Court of Appeals is to hear arguments Friday afternoon from attorneys representing Chrysler LLC, Fiat Group SpA and a trio of Indiana state pension and construction funds, the latter of which say the deal unfairly favors the interests of the company's unsecured stakeholders ahead of those of secured debtholders such as themselves.

Late Tuesday, the appeals court halted the sale pending the Indiana state funds' appeal. Chrysler had hoped to close the sale by the end of this week.

Auburn Hills, Mich.-based Chrysler has maintained that the sale is its only hope of avoiding selling itself off piece by piece. If the sale doesn't close by June 15, Fiat has the option of pulling out of the deal. In addition, production at Chrysler's manufacturing plants remains halted pending the closing of the sale.

The funds, which include the Indiana State Police Pension Fund, the Indiana Teacher's Retirement Fund, and the state's Major Moves Construction Fund, also are challenging the constitutionality of the Treasury Department's use of Troubled Asset Relief Program, or TARP, funds to supply Chrysler's bankruptcy protection financing. They say the Treasury did so without congressional authority.

In addition, he ordered officials in Maine, New Jersey, Connecticut, Vermont and Missouri to halt their investigations of the telecommunication companies for their alleged participation in the once-secret surveillance programs.

U.S. District Court Judge Vaughn Walker also deferred a decision on whether to sanction the government for refusing to turn over a top secret document in one of the few wiretapping cases still pending.

The judge's dismissals of most of the lawsuits were widely expected after Congress in July agreed on new surveillance rules that included protection from legal liability for telecommunications companies that allegedly helped the U.S. spy on Americans without warrants.

Walker upheld the constitutionality of the new surveillance rules in a written ruling Wednesday. Lawyers representing the telecom customers said they would appeal the judge's ruling.

The judge said congressional actions didn't prohibit telephone and e-mail customers who believe they were targets of warrantless wiretaps from suing federal government officials, whom he called "the primary actors in the alleged wiretapping activities."

He noted that several lawsuits that directly accuse the government, rather than the companies, of wrongdoing are still pending.

The U.S. Court of Appeals for the Second Circuit will hear arguments in the case Friday afternoon in New York, according to the Indiana treasurer's office. Chrysler LLC had hoped to close the sale by the end of week, pending regulatory approval.

"We are pleased the Court of Appeals has agreed to hear our arguments," Indiana Treasurer Richard Mourdock said in a statement. "As we have stated from the beginning, Indiana retirees and Indiana taxpayers have suffered losses because of unprecedented and illegal acts of the federal government."

Chrysler has maintained that the deal with Fiat Group SpA is its only hope of avoiding selling itself off piece by piece. If the sale doesn't close by June 15, Fiat has the option of pulling out of the deal.

But the funds, which include the Indiana State Police Pension Fund, the Indiana Teacher's Retirement Fund, and the state's Major Moves Construction Fund, claimed that the deal as structured unfairly favors the interests of the company's unsecured stakeholders ahead of those of secured debtholders such as themselves.

"We have the whole package here," said Sen. Harry Reid, seated beside Sotomayor before the two met in his Capitol office. He called her life story "compelling."

"America identifies with the underdog, and you've been an underdog many times in your life, but always the top dog," Reid, D-Nev., said of Sotomayor, the New York-born daughter of Puerto Rican parents who would be the first Hispanic and the third woman on the high court.

Citing her Princeton and Yale education and long experience as a lawyer and judge, Reid said: "We could not have anyone better qualified."

The visit was the start of a daylong schedule of meet-and-greets with Republicans and Democrats designed to let senators get to know President Barack Obama's nominee before they debate confirming her.

Sotomayor was also meeting with the top Republican, Sen. Mitch McConnell of Kentucky, and leaders of the Judiciary Committee, Chairman Patrick J. Leahy, D-Vt., and senior GOP Sen. Jeff Sessions of Alabama.

Republican senators have already begun to question remarks Sotomayor has made in the past about how her life experiences influence her judicial decisions. In turn, Democrats have defended her as a fair and unbiased judge, and all sides say they are eager to talk to her privately and question her in public hearings to come.

The state Supreme Court's decision to uphold California's constitutional ban on gay marriage — and the prospect that an impassioned initiative to overturn it could share the ballot with next year's governor's race — holds consequences for candidates from both parties, but especially for the one most deeply associated with the issue.

The intensity of a statewide vote on same-sex marriage could make it difficult for Newsom to connect with centrist voters, millions of whom voted no on the issue last year.

"It certainly underlines Gavin Newsom's previous advocacy for same-sex marriage. I think that might be a two-edged sword for him," said Mark DiCamillo, director of the San Francisco-based Field Poll.

Other possible Democratic contenders including Attorney General Jerry Brown, Los Angeles Mayor Antonio Villaraigosa and Lt. Gov. John Garamendi also support same-sex marriage. So does one of the three leading Republican hopefuls, former U.S. Rep. Tom Campbell, but former eBay chief executive Meg Whitman and state Insurance Commissioner Steve Poizner oppose it.

Among other things, Tennessee railroad worker Thurston Hensley sought monetary damages for a fear of developing cancer in the future.

CSX argued that the instructions given to the jury were too friendly to Thurston. The company wanted jurors to be instructed that Thurston needed to demonstrate that his fear of cancer was genuine and serious.

The Supreme Court, in an unsigned opinion, said it was a "clear error" for the trial judge not to give the jury instructions CSX requested.

The high court sent the case back for new court proceedings.