What honestly surprises me is the government let the case go forward in the first place. Weird quirk of law is that in order to sue the government you need to get permissions from the government.
I would assume they would have just put the kibosh on this one. Ya know governmental immunity and all.
The fact of the matter is the government DID recognize a legal issue in the case and DID let it move forward, with the reported result. Perhaps you should be a little less cynical about your government.