A judge has decided that Rutherford's two children can remain in France with their father, Rutherford's ex-husband Daniel Giersch, TMZ says.
Giersch is reportedly unable to return to the US because his visa has been revoked.
Rutherford, who was hoping her children could return to the States, is now said to be "devastated" at the ruling.
The judge decided that she can have the children half the time and will be able to visit them in France, but Rutherford reportedly believes that is unworkable because of the amount of travel involved.
Rutherford filed for divorce from Giersch in 2009 after two years of marriage and was later granted a temporary restraining order after accusing her ex-husband of "alarmingly harassing and scary" behaviour.