The Obama Administration had earlier decided to cease defending the validity of Section 3 in the Court, but a defense of the Act's validity was provided by attorneys for DOMA's Congressional supporters. The decision rested on both federalism and equal protection grounds and was an appeal from a motion for summary judgment at the trial court level that invalidated the law.
These appeals present constitutional challenges to section 3 of the Defense of Marriage Act ("DOMA"), 1 U.S.C. § 7, which denies federal economic and other benefits to same-sex couples lawfully married in Massachusetts and to surviving spouses from couples thus married. Rather than challenging the right of states to define marriage as they see fit, the appeals contest the right of Congress to undercut the choices made by same-sex couples and by individual states in deciding who can be married to whom.
The First Circuit, in the Northeast United States, includes many, but not all, of the states that have legally recognized same sex marriage. The ruling does not create a precedent that directly binds federal courts in other parts of the country, but provides the Obama administration which a much more powerful rationale for treating Section 3 as invalid nationally, in support of its own policy regarding its constitutionality.
The decision could be subject to en banc review by the entire First Circuit, although the relatively liberal First Circuit is unlikely to review this unanimous panel decision about U.S. government administration that the Justice Department supports, and can also be appealled to the U.S. Supreme Court - although often the U.S. Supreme Court will wait until multiple circuits of the federal appellate courts have addressed the issue before weighing in on an issue.
Marriage status is relevant to a wide variety of federal benefit and federal tax issues.
UPDATE (June 1, 2012): A federal district court in California reached the same conclusion on May 24, 2012.