White House Won't Oppose New Challenge to 2010 Healthcare Law

The Obama administration on Wednesday cleared the way for the U.S. Supreme Court to revive a lawsuit that challenges the 2010 healthcare overhaul on religious grounds, including a claim that it helps fund abortions.

Liberty University, a Christian college in Lynchburg, Virginia, had challenged the individual mandate, which required Americans to obtain insurance by 2014 or pay a penalty, and a mandate requiring big employers to provide coverage for workers.

The school has said the law violates the First Amendment ban on the government's establishing or impeding the free exercise of religion, by forcing objecting purchasers to buy insurance that could subsidize abortion, and exempting some religions from the law.

It has also said the law violates the U.S. Constitution's equal protection guarantee, and exceeds Congress' power to tax and spend and to regulate commerce.

In September 2011, the 4th U.S. Circuit Court of Appeals in Richmond, Virginia said it lacked jurisdiction over Liberty's case because the federal Anti-Injunction Act banned lawsuits seeking to halt collection of a tax.

The Supreme Court concluded otherwise when it upheld the individual mandate in a 5-4 vote on June 28. Liberty t hen argued it deserved another chance to litigate because the 4th Circuit decision, which the Supreme Court did not review, was wrong.

In Wednesday's filing, Solicitor General Donald Verrilli said Liberty's First Amendment and equal protection claims lack merit, but that the 4th Circuit never considered their merits.

"Under the circumstances of this case, (the government defendants) do not oppose further proceedings in the court of appeals to resolve them," he wrote.

Mathew Staver, a lawyer for Liberty, said in a phone interview: "We're very pleased with the Department of Justice's response, which we expected and which reflects the correct process that this case should follow."

The case is Liberty University et al v. Geithner et al, U.S. Supreme Court, No. 11-438. (Editing by Eric Walsh)