The 5th U.S. Circuit Court of Appeals ruled on Tuesday in favor of 26 states challenging President Barack Obama's executive action on immigration, potentially paving the way for a Supreme Court decision on the issue.
Two judges on the three-judge panel ruled that the executive action, which would grant an estimated 4.7 million undocumented immigrants relief from deportation, should remain on hold while the government appeals its blocking.
The immigration order was first put on hold by Texas Judge Andrew Hanen in February after the states, all led by Republican governors, alleged that taking in migrants would be overly burdensome.
"The President's attempt to bypass the will of the American people was successfully checked again today," Texas Governor Greg Abbott said in a news release.
The case has become the focal point of Obama's efforts to change U.S. immigration policy.
Seeing no progress on legislative reform in Congress, Obama announced in November he would take executive action to help immigrants. He has since faced criticism from Republicans who say the program grants amnesty to lawbreakers.
The White House said the two judges who ruled against the administration on Tuesday chose to "misinterpret the facts and the law."
"The president's actions... are squarely within the bounds of his authority and they are the right thing to do for the country," White House spokeswoman Brandi Hoffine said.
The Justice Department is evaluating the ruling and considering next steps, a U.S. official said on the condition of anonymity.
The 5th Circuit will rule again in the coming months on whether the Obama administration can appeal the block to the executive order. That decision may be made by a new panel of judges and will take into account more evidence.
Immigration advocates have been wary of the prospect that the 5th Circuit, known as one of the most conservative in the nation, would rule with the administration.
"We are disappointed, but this is not unexpected at all," Marielena Hincapie, executive director of the National Immigration Law Center, said on a conference call with reporters.
Hincapie said the immigration advocate community is still optimistic the executive order will prevail, even if it means waiting until the Supreme Court can rule on it.
If it is denied an appeal, the Obama administration may ask the Supreme Court to consider the case, potentially delaying the launch of the immigration programs until June 2016.
That could bring up the issue at a politically important time, said Marshall Fitz, vice president of immigration policy at left-leaning Washington think tank Center for American Progress.
"If the programs go into effect next June, there will be real electoral consequences," Fitz said. "There is a clear contrast between (Democratic front-runner Hillary) Clinton and any Republican in the current field."
Clinton has said she would like to see Obama's action expanded to shield even more immigrants from deportation.
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