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UPDATE 1-US appeals court allows stem cell funds to continue
* Appeals court stays injunction that blocked funding
* Expedited schedule planned for appeal over funding (Adds details of ruling, background)
By Jeremy Pelofsky
WASHINGTON, Sept 28 (Reuters) - A U.S. appeals court on Tuesday allowed federal funding for human embryonic stem cell research to continue pending a full appeal, lifting an injunction issued by a federal judge who had said the Obama administration's policy violated the law.
The U.S. Court of Appeals for the District of Columbia Circuit said the Obama administration had "satisfied the standards required for a stay pending appeal" of the injunction imposed by the judge last month.
Judge Royce Lamberth ruled the National Institutes of Health guidelines on the research violated the law because embryos were destroyed in the process and it put other researchers working with adult stem cells at a competitive disadvantage for federal grants.
The Obama administration challenged his ruling and asked the appeals court to put it on hold pending its decision on the merits of the dispute. The appeals court ordered an expedited schedule for arguments.
During a lengthy oral argument on Monday, government lawyers warned the three-judge panel of the appeals court that dozens of research projects would be ruined if their funding was cut off, wasting millions of taxpayer dollars and causing irreparable harm.
President Barack Obama has expanded federal funding for research involving human embryonic stem cells in hopes it will lead to cures for more diseases. Opponents argue, usually on religious grounds, that the research is unacceptable because it damages or destroys human embryos.
Lamberth's injunction came after a challenge by two researchers who work with adult stem cells and opposed work with embryonic stem cells -- Dr. James Sherley, a biological engineer at Boston Biomedical Research Institute, and Theresa Deisher, of Washington-based AVM Biotechnology.
Even with funding allowed to continue, possibly only temporarily, the White House could turn to Congress in hopes lawmakers will rewrite the law to be clearer on the issue, though that could be difficult in an election year.
Lawmakers are expected to head back to their home districts in coming days to campaign for re-election. And conservative Republicans are expected to make gains in the November elections, which may make it harder to win passage next year.
NIH could also try to rewrite its guidelines to conform with the law, or the White House could appeal to the Supreme Court if the appeals court rules against it on the merits of the case. (Editing by Todd Eastham)
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