Federal judge refuses to throw out lawsuit against federal deepwater drilling moratorium

A federal judge who overturned the Obama administration's initial six-month moratorium on deepwater oil drilling has rejected the government's bid to have the court challenge thrown out.

Government lawyers argued that a lawsuit filed by several offshore service companies over the May 28 moratorium was moot because the Interior Department imposed a new, temporary drilling ban on July 12.

But U.S. District Judge Martin Feldman rejected that argument Wednesday, saying the second moratorium "arguably fashions no substantial changes" from the first.

The moratorium followed the massive BP PLC oil spill.

The Justice Department has asked the 5th U.S. Circuit Court of Appeals to review Feldman's earlier ruling overturning the first moratorium.