The Friends of Liberty State Park sued New Jersey over concerns that the 30-foot high memorial called ``Empty Sky - New Jersey September 11 Memorial'' would block views of ground zero.
The memorial is to be built in Jersey City across the Hudson River from lower Manhattan, where the World Trade Center stood.
The group argued the state Environmental Protection Department did not allow public input on the project, among other claims.
An appeals court on Monday rejected the petition and ruled the group waited too long to file suit.
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