NEW ORLEANS, LOUISIANA, May 2, 2012, LifeSiteNews.com) –  The embattled state of Texas won a legal battle in its fight to defund Planned Parenthood Tuesday, when an appeals court ruled the state could withholds funds from the abortion provider’s affiliates.

Fifth Circuit Court of Appeals Judge Jerry Smith’s ruling overturned an order from U.S. District Judge Lee Yeakel on Monday, which forced the state to continue financing Planned Parenthood during its pending court case.

Planned Parenthood is suing since Governor Rick Perry began enforcing a law allowing the state’s Women’s Health Program to deny Medicaid funds to Planned Parenthood affiliates, a law that had been on the books since 2007.

Texas Attorney General Greg Abbott, who represented the state, told Judge Smith, “Money is fungible, and taxpayer subsidies—even if ‘earmarked’ for non-abortion activities – free up other resources for Planned Parenthood to spend on its mission to promote elective abortions.”

Abbott said the state would end the program before funding an abortion provider or its affiliates.

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“Planned Parenthood and its affiliates have every right to hold that belief and advocate for elective abortion, but they are not entitled to receive taxpayer subsidies from a government program that is designed to encourage preventative birth control and discourage abortion,” the state’s attorneys argued.

Pro-life litigators applauded the ruling.

“Texas very carefully constructed a statutory plan designed to provide women with comprehensive health services, including those that reflect a culture of life,” Stephen Casey, chief counsel of Texas Center for Defense of Life (TCDL), said in a statement e-mailed to LifeSiteNews.com. “Health care for Texas women is improving, and we are defining, in Texas, the importance of fostering a culture of life.”

This state’s decision will deprive Planned Parenthood and its partners of $13 million annually. Last December, the Obama administration retaliated by cutting off federal Medicaid funds, which account for 90 percent of the $40 million program’s budget. Texas has since filed a countersuit.

The new cash crunch has caused numerous Texas clinics to close their doors.

Texas Planned Parenthood offices have fallen on hard times statewide. Abby Johnson, a former manager, filed a whistleblower lawsuit claiming her affiliate alone defrauded the Women’s Health Program of $5.7 million.  Karen Reynolds, a decade-long employee of Planned Parenthood Gulf Coast (PPGC), filed a separate lawsuit stating she regularly witnessed Planned Parenthood bilk Medicaid by “billing for medical services not rendered, billing for for unwarranted medical services, billing for services not covered by Medicaid, and creating false information in medical records which was material to billing for medical services.” 

In March, Tony Thornton, CEO and president of the Planned Parenthood Association of Lubbock, was arrested for indecent exposure.

Tuesday’s ruling means the state will not have to fund the organization while its case moves forward.

The appeals court judge is no stranger to controversy. Judge Smith, a Reagan appointee, made headlines last month when he asked the Justice Department to clarify President Obama’s remarks that it would be “unprecedented” for the Supreme Court to overturn his health care reform law if they find it is unconstitutional.