Washington (CNN) -- The Supreme Court will decide whether lying about military honors is a crime as it ponders an appeal involving the prosecution of a California public official who falsely claimed to have won the prestigious Medal of Honor.
The justices announced Monday the court will hear the unusual free speech case early next year.
A divided federal appeals court had earlier ruled there was inadequate "compelling governmental interest" when Congress passed the Stolen Valor Act in 2006.
Xavier Alvarez had won a seat on the Three Valley Water District board of directors in 2007, and at his first open meeting claimed to be a retired Marine who won the Medal of Honor in 1987. The highest military decoration awarded by the U.S. government is sometimes mistakenly called the Congressional Medal of Honor.
"I got wounded many times by the same guy," Alvarez declared, according to court records. "I'm still around."
While the 9th Circuit U.S. Court of Appeals ruled Alvarez's free speech rights were violated, they showed little sympathy for his actions, calling them "nothing but a series of bizarre lies."
"We have no doubt that society would be better off if Alvarez would stop spreading worthless, ridiculous, and offensive untruths," the three-judge panel concluded. "But, given our historical skepticism of permitting the government to police the line between truth and falsity, and between valuable speech and drivel, we pre-emptively protect all speech, including false statements, in order that clearly protected speech may flower in the shelter of the First Amendment."
Alvarez was prosecuted on one count of falsely verbally claiming to have received the medal. He had conditionally pleaded guilty, reserving his right to later appeal on constitutional grounds. He was fined $5,000, given three years' probation, and resigned last fall from the utility board based in Claremont, California.
The appeals court ruling prompted outrage from veterans groups, and the Obama administration urged the high court to intervene.
The appeals court ruling noted Alvarez apparently "makes a hobby of lying about himself." Acquaintances told the FBI he claimed to have won the Medal of Honor during the U.S. Embassy hostage crisis in Iran in 1979, or during the Vietnam War, according to court records. He also spread stories that he was a former professional hockey player and a police officer.
Beyond the circumstances of this appeal, the broader constitutional concerns deal with the power of the government to limit certain types of speech, particularly those made by public officials and those made during election campaigns.
The Supreme Court has been split in recent years over whether false statements of fact should be protected under the Constitution, except in very limited circumstances. The Justice Department had argued Alvarez's statements deserved no legal protection because they had little value, and that there was a larger societal need to "protect speech that matters," in this case the valor and integrity of military heroes who rightfully earned their medals.
The high court earlier last year struck down another federal law, this one designed to stop the sale and marketing of videos showing dogfights and other acts of animal cruelty. The 8-1 majority said it was an unconstitutional violation of free speech.
The federal Stolen Valor Act was designed to "protect the reputation" of military decorations, citing "fraudulent claims surrounding the receipt of the Medal of Honor (and other congressionally authorized military medals, decorations, and awards)." Similar laws have been in place since 1948.
Other federal judges have recently found the Stolen Valor Act to be similarly unconstitutional.
As for Alvarez, he is currently in the California State Prison in Centinela, convicted separately earlier this year for defrauding the water district, according to court records.
The medals case is U.S. v. Alvarez (11-210).