Feb 14 (Reuters) - Puerto Rican residents have lost their latest effort to hold the federal government accountable for health problems allegedly caused by decades of military exercises and weapons testing on Vieques Island.

The U.S. Court of Appeals for the 1st Circuit in Boston ruled on Tuesday that the federal government is shielded from the suit by sovereign immunity, a doctrine that prevents the government from being sued without its consent.

For around 60 years after World War II, the U.S. Navy used a portion of Vieques as a weapons-testing ground and firing range, detonating bombs and experimenting with chemicals from napalm to Agent Orange and depleted uranium. The military abandoned the base in 2003 under political pressure.

Juanita Sanchez, a resident of the island, sued on behalf of her daughter and some 7,000 others in 2007. The suit accused the U.S. military of inflicting illnesses on its inhabitants, including a 30 percent higher cancer rate compared to Puerto Rico's main island.

The residents brought their claims under the Federal Tort Claims Act, which allows individuals to sue the United States for most torts, including negligence. However, people cannot sue over conduct where the government was performing its defined duties.

The islanders argued that the military was not executing such functions when it exposed them to toxic substances and failed to warn them about the dangers.

But the 1st Circuit refused to entertain the residents' claims, and upheld a Puerto Rico district court's decision to dismiss the case. Courts should be cautious about interfering with the exercise of military authority, Chief Judge Sandra Lynch wrote on behalf of two members of the three-judge panel.

The third judge, Juan Torruella, who comes from Puerto Rico, issued a vehement dissent. The government was aware of the toxic impact of its activities in 1979, he wrote. Its decision not to warn residents was not an exercise of judgment entitled to immunity, he added.

"Nowhere does the medieval concept of 'the King can do no wrong' underlying the doctrine of sovereign immunity sound more hollow and abusive than when an imperial power applies it to a group of helpless subjects. This cannot be a proper role for the United States of America," Torruella wrote.

All three judges agreed that the suit raised serious health concerns that should be brought to the attention of Congress. The opinion included an instruction for the court clerk to submit copies of the decision to leaders of the House and Senate.

"Even the majority recognized the individuals here have not been well-treated," said Carter Phillips, the lawyer who represented the Vieques residents. He said his clients would likely request a rehearing before the full 1st Circuit.

Phillips acknowledged that courts have been skittish when it comes to questioning the government's military activities. The Supreme Court even adopted a rule in 1950, known as the Feres doctrine, which prevents soldiers and their families from suing the government for injuries stemming from their service.

Charles Miller, a spokesman for the Department of Justice, declined to comment on the litigation.

The case is Sanchez et al v. United States, U.S. Court of Appeals for the 1st Circuit, No. 10-1648.

For Sanchez et al: Carter Phillips of Sidley Austin.

For the government: Adam Bain of the Justice Department.

(Reporting By Terry Baynes)

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