Update on establishment clause lawsuit against UC-Berkeley website

I previously reported that an establishment clause lawsuit against a UC-Berkeley evolution website (Caldwell v. Caldwell) was dismissed in a federal district court on the absurd grounds that the plaintiffs lacked taxpayer standing to sue. The Evolution News & Views website reports that last month the 9th Circuit federal court of appeals heard oral arguments on an appeal of the lawsuit. What surprises me is that the oral arguments described in the report only concerned the merits of the lawsuit and did not even mention the dismissal. The district court opinion did not even make a ruling on the merits:

In view of the above holding, the court need not, and does not, reach the parties' arguments on the merits of the Establishment Clause claim. This conclusion is further buttressed by the fact that the court, as described above, is currently unable to take judicial notice of defendants' website. As such, the court does not have access to what defendants argue is the necessary and relevant context in which to evaluate plaintiff's claim.
Accordingly, consideration on the merits is premature at this juncture, and is better suited for resolution if and when the case is again before this court.(page 13)

So there is no decision on the merits for the appeals court to review, no decision on the merits to affirm or reverse. So why is the appeals court listening to arguments on the merits of the lawsuit? And why is the dismissal not mentioned in the EN&V report?