The Collards from Western Australia lost their case in Perth's Supreme Court today.
They wanted answers and an apology after nine members of the family were taken from their parents.
Donald and Sylvia Collard told NITV News they're disappointed with the result.
"Honestly, I'm bitter," Donald says.
"And those who made this judgement, I'll tell them: when they read this, or see this news, they won't sleep. The black fella, the Aborigine, won't allow them. Don't you worry about that."
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The Collards trial began earlier this year.
They agreed that the WA government, under the existing legislation, could take nine of their children away between 1958 and 1961.
But under the Native Welfare Act, the state had to protect them.
The Collards say the state failed them, and their children suffered emotional and spiritual harm after two of their girls were sexually abused at the Sister Kate's Children's Home.
"Why did I pay maintenance to have my kids neglected, abused and all that by the state? There was never anything there. It never came out. They could not give us the answers," says Donald.
One of the Collard sisters, Glenys, says she still suffers from the trauma.
But Justice Pritchard ruled the state did not have a case to answer. She ruled the Collard's did not prove the state had a duty of care over the children.
"The story's right. The story's true. There's nothing wrong with the story," Dennis Eggington from the WA Aboriginal Legal Service says.
"We'll be looking at the technicalities of law and looking through that very large transcript to see what we can find."
The Collards say they may consider an appeal.
Watch: Jim Morrison, the co-convenor of Bringing Them Home WA, reacts to court ruling
