In a split decision, a three-judge panel of the US Court of Appeals for the District of Columbia Circuit ruled in favor of Flynn and the Trump administration in preventing US District Judge Emmet Sullivan from exercising his discretion on whether to grant the department's motion to clear Flynn, who twice pleaded guilty.
The ruling prevents Sullivan from hearing arguments at a July 16 hearing from retired judge John Gleeson, whom he appointed as a "friend of the court" to argue against dropping the case.
"In this case, the district court’s actions will result in specific harms to the exercise of the executive branch’s exclusive prosecutorial power," wrote Judge Neomi Rao, who was appointed by Trump.
"The contemplated proceedings would likely require the Executive to reveal the internal deliberative process behind its exercise of prosecutorial discretion," she added.
Judge Robert Wilkins, an Obama administration appointee, dissented.
Flynn, a retired Army lieutenant general, was one of several former Trump aides charged under former special counsel Robert Mueller's investigation that detailed Moscow's interference in the 2016 US presidential election.
Flynn twice pleaded guilty to lying to the FBI about his conversations with Russia's then-ambassador, Sergey Kislyak.He switched lawyers to pursue a new scorched-earth tactic that accused the FBI of entrapping him, and asked the judge to dismiss the charge.