U.S. District Court judge Carlton Tilley Jr. refused Thursday to grant a temporary restraining order requested by two taxpayers, one of them an official of the conservative Virginia-based Family Policy Network, and three unidentified freshmen.
Attorneys for the network said they filed an appeal minutes after the judge recessed court. The appeal will be considered by the 4th U.S. Circuit Court of Appeals in Richmond, Va.
Both sides claimed a victory after the ruling.
Network President Joe Glover said the lawsuit forced the university to change its program from a required reading and discussion to a voluntary program.
University Chancellor James Moeser said the program was never required in the first place, and was intended to stimulate critical thinking in freshmen. He said opponents of the program "consistently missed the point.
"There's absolutely no penalty," the chancellor said. "We have no way of knowing which students show up, we don't take roll, there's no grade. There never was."
The plaintiffs sued last month to overturn an assignment for 4,200 transfer students and freshmen at the Chapel Hill campus to read and discuss "Approaching the Qur'an: The Early Revelations," by Michael Sells.
Lawyers for the network argued that the program ignored violent passages in the Quran and sought to indoctrinate students with the idea that the religion embraced only peace.
They also said the university's announcements on post cards sent to students appeared to be requiring the reading.
"The university initially required everyone to read the book and write a paper," said James Yacovelli of Youngsville, the center's state director and one of the individual plaintiffs. "Now you don't have to do anything."
Tilley's ruling came on a request for an injunction to stop the program which starts Monday, the day before classes begin in Chapel Hill. The lawsuit still is pending in Tilley's court.
The 180 discussion groups, meant to last about two hours, were to be led by volunteers from the faculty and staff. Students who objected to the assignment were allowed to explain their case in a one-page paper and skip the discussion.
"Learning in a university setting involves the ability to confront other viewpoints," said Celia Lata, the assistant attorney general representing the university. "A university that exposes students only to what they already know or believe would not equip them to live in the world."
Detractors said the 220-page book could convert Americans to the religion of terrorists blamed for the deaths of 3,000 people in the Sept. 11 attacks.
The book contains commentary on 35 verses of the Quran and has a companion CD with audio recitations of several verses in different styles.
Carl Ernst, a professor of Islam at UNC, recommended it to the selection committee to help students struggling to understand Islam, a religion shared by 1.2 billion people.
The reading requirement met political pressure in the state House, which passed a budget proposal this week that would cut public money for UNC's reading program unless it gives equal time to all religions.
The stance was largely symbolic since the program costs relatively little and the General Assembly is weeks away from passing a final budget.