The lawsuit claimed that research funded by the National Institutes of Health violated the 1996 Dickey-Wicker law that prohibits taxpayer financing for work that harms an embryo. But the administration policy allows research on embryos that were culled long ago through private funding.
U.S. District Judge Royce Lamberth, chief of the federal court in Washington, last year said the lawsuit was likely to succeed and ordered a stop to the research while the case continued. But responding to a swift protest from the Obama administration, the U.S. Circuit Court of Appeals here quickly overturned Lamberth's injunction and said the case was likely to fail.
Lamberth said in his opinion Wednesday that he is bound by the higher court's analysis and ruled in favor of the administration.
"This Court, following the D.C. Circuit's reasoning and conclusions, must find that defendants reasonably interpreted the Dickey-Wicker Amendment to permit funding for human embryonic stem cell research because such research is not `research in which a human embryo or embryos are destroyed,' " Lamberth wrote.
Researchers hope one day to use embryonic stem cells in ways that cure spinal cord injuries, Parkinson's disease and other ailments. Opponents of the research object because the cells were obtained from destroyed human embryos. Though current research is using cells culled long ago, opponents also fear research success would spur destruction of new embryos. Proponents say the research cells come mostly from extra embryos discarded anyway by fertility clinics.
President George W. Bush also permitted stem cell research, but limited the availability of taxpayer funds to embryonic stem cell lines that were already in existence and "where the life and death decision has already been made." Obama's order removed that limitation, allowing projects that involve stem cells from already-destroyed embryos or embryos to be destroyed in the future. To qualify, parents who donate the original embryo must be told of other options, such as donating to another infertile woman.
The Obama administration's rules expanded the number of stem cell lines created with private money that federally funded scientists could research, up from the 21 that Bush had allowed, to 128 and counting.
Obama adviser Stephanie Cutter wrote on the White House blog that Lamberth's ruling is good news for patients suffering from diseases that could potentially be treated by stem cell research.
"For too long, patients and families have suffered from debilitating, incurable diseases and we know that stem cell research offers hope to millions of Americans across the country," she wrote. "President Obama is committed to supporting responsible stem cell research and today's ruling was another step in the right direction."
The lawsuit was filed in 2009 by two scientists who argued that Obama's expansion jeopardized their ability to win government funding for research using adult stem cells - ones that have already matured to create specific types of tissues - because it will mean extra competition.