Phelps, who says God is allowing soldiers to die in Iraq and Afghanistan because the military permits gays and lesbians to serve, has appeared at several funerals with members of his congregation holding signs with messages such as, "You're in hell" and "God hates you."
The suit was originally brought by Albert Snyder, whose son, Lance Cpl. Matthew Snyder, was killed in 2006 in Iraq. Snyder sued Phelps and his congregation claiming that their protest at his son's private funeral was an invasion of the family's privacy and inflicted emotional distress.
The district court eventually awarded Snyder a judgment of $5 million.
But a federal appeals court threw out the judgment, finding that the protest signs weren't aimed at Snyder specifically and said the statements are "protected by the Constitution" because they contained "imaginative and hyperbolic rhetoric" meant to spark debate.
"We are constrained to agree that these signs are entitled to First Amendment protection," the three judge panel wrote.
Margie J. Phelps, the daughter of pastor Phelps, who serves as the counsel of record for Westboro Baptist Church in Topeka, said the Supreme Court's decision to hear the case will provide an "excellent platform for the words that we've faithfully delivered to the nation for 20 years."
She said the church, consisting mostly of extended family members, has attended more than 600 random funerals of soldiers because members of the congregation are trying to get out the message that if the military stops accepting homosexuals, soldiers will stop dying.
"The issue about these dead soldiers," Margie Phelps said, "is an issue of acute public importance."
Craig Trebilcock, a lawyer for Albert Snyder, said his client was devastated that the members of the church invaded his privacy.
"Mr. Snyder felt that he had one opportunity, a few hours to say goodbye to his son and they were torn away from him," Trebilcock said. "He can't think about his son's passing and can't get closure because every time he thinks of his son's death and his funeral, he sees the Phelps family carrying a sign saying, "You're in hell."
Trebilcock said he hopes the court will look at the case as a balancing test and rule in favor of Snyder's claim of the right to peaceful and religious assembly.
"We don't believe there is an unlimited First Amendment right to engage in outrageous conduct intended to inflict harm on a private person," Trebilcock said.
The court will hear oral arguments in the case next term, which begins in October.