The ruling from the 7th U.S. Circuit Court of Appeals in Chicago comes just days after a similar decision by a federal judge in Washington, D.C., that gave the green light to an Army veteran — who also alleges he was tortured in Iraq — to sue Rumsfeld for damages.
Monday's ruling rejected arguments that Rumsfeld should be immune from such lawsuits for work performed as a Cabinet secretary.
The U.S. Supreme Court sets a high bar for those suing a top government official, mandating that they show the acts in question are tied directly to a violation of constitutional rights and that the official clearly understood they were violations.
"There can be no doubt that the deliberate infliction of such treatment on U.S. citizens, even in a war zone, is unconstitutional," U.S. Circuit Judge David Hamilton wrote in Monday's opinion.
An attorney for Rumsfeld blasted the ruling.
"Having judges second-guess the decisions made by the armed forces halfway around the world is no way to wage a war," David Rivkin, Jr., said in a written statement. "It saps the effectiveness of the military, puts American soldiers at risk, and shackles federal officials who have a constitutional duty to protect America."
In their lawsuit, Donald Vance and Nathan Ertel claim U.S. forces detained them in 2006 after they alleged illegal activities by the Iraqi-owned company they worked for, Shield Group Security.
Among the methods of torture used against them during several weeks in military camps was sleep deprivation and a practice known as "walling," in which subjects are blindfolded and walked into walls, according to the lawsuit.
The lawsuit alleges Rumsfeld personally participated in approving the methods for use by the U.S. military in Iraq, making Rumsfeld responsible, it argues, for what happened to Vance and Ertel.
Their attorney, Mike Kanovitz, welcomed the ruling, saying the court faced a choice between "protecting the most fundamental rights of American citizens in the difficult context of a war or leaving those rights solely in the hands of politicians and the military."
"It was not an easy choice for the Court to make, but it was the brave and right choice," Kanovitz said in a written statement.
A spokesman for the U.S. Department of Justice, which represents Rumsfeld in the case, declined comment on the ruling.
But Rivkin said he believes the decision will eventually be overturned.