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Stem cell researchers can be cautiously optimistic.

Yesterday morning, the government attorneys and anti-embryonic stem cell research advocates argued before an appeals court in the ongoing stem cell case, Sherley v. Sebelius, where former MIT professor James L. Sherley and fellow researcher Theresa A. Deisher are suing the federal government to prohibit human embryonic stem cell research.

The government is appealing a preliminary injunction issued by a lower court that barred the National Institutes of Health from funding human embryonic stem cell research — though other kinds of stem cell research are OK.

That injunction was issued on Aug. 2 but has been suspended by the appeals court since Sept. 9. The appeals court has moved quickly in the past — when they heard oral argument earlier in the case, over whether to temporarily suspend the preliminary injunction while they heard the case — they issued the order just one day after oral argument.

At this stage, the only information available to the court were the questions asked by the 3-judge panel during the 40-minute oral argument. The court is the United States Court of Appeals for the District of Columbia; the judges are Douglas Ginsburg, Karen L. Henderson and Thomas Griffith.

According to Nature’s quotations from the oral argument, two of the three judges seemed inclined to favor the government’s position; the case will be decided by a majority of the panel.

Griffith, while questioning the government, summarized the case saying, “the only question for us is whether the later research is somehow inextricably intertwined with the derivation,” referring to a central issue in the case: whether doing embryonic stem cell research on existing stem cell lines constitutes “research in which” an embryo is destroyed. If not, then the congressional appropriations rider that restricts embryo research, the Dickey-Wicker amendment, would not apply. There have been scores of pages filed in the case so far solely discussing the meaning and etymology of the word “research.”

Ginsburg, seemed inclined to rule to the government’s favor, replying to Sherley’s lawyer, Thomas Hungar, saying Dickey-Wicker bars research “in which” a human embryo is damaged, not “for which.” The latter would bar a much larger set of stem cell research.

A major issue for the judges in evaluating whether a preliminary injunction is warranted (but perhaps not for the lower court in its final decision) is the balance of harms between the two parties. Harm to Sherley and similar researchers by being forced to compete with embryonic stem cell research for scarce federal dollars, and harm to the scientific enterprise and hundreds of researchers and millions of dollars of research and unknowable medical developments by being forced to halt stem cell research that is currently ongoing.

Griffith postulated a situation where the court agreed with Sherley on the merits, and then asked how the court goes about balancing the harm. In reply, Hungar merely noted that Sherley and Deisher “suffer ongoing hardship.”

In the meantime, there has been no further activity at the lower court level. While both sides have moved for summary judgement, meaning a request for the court to decide the case based on facts that are undisputed by both sides, there’s good reason to think Judge Royce C. Lamberth will wait for the appeals court’s ruling — and any possible written opinion — before making up his mind.

If Lamberth does rule against the government, they can appeal the entire case back to the appeals court. That would be the third time this case has been to that appeals court. The first time, over the summer, that court ruled that Sherley and Deisher did indeed have standing to sue the government, because they were indeed harmed by having to compete for funding. The second time is the present case, over whether the lower court was right to issue the preliminary injunction barring the research.