(Bloomberg) — President Barack Obama's bid to make overhauling immigration policy a second-term victory was dealt a serious blow as federal judges ruled the effort must remain on hold while 26 states sue to overturn it.
Obama's executive action, which would allow 5 million undocumented immigrants to remain in the country, must be delayed until the lawsuit is resolved, the U.S. Court of Appeals in New Orleans ruled. The case has drawn sometimes furious opposition from members of Congress, and more than a few presidential contenders.
For years, Congress has been unable to agree on a revised law to address an estimated 11 million undocumented immigrants in the United States. Obama said he acted because the House has refused to take up a bipartisan measure passed by the Senate in 2013 that would create a path to citizenship for many of those immigrants.
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To qualify under his deferral program, undocumented immigrants must have been in the U.S. for at least five years and have a child who is a citizen, or have been brought here as children themselves. They must also pass a criminal background check.
2-1 decision
The appeals court ruled Tuesday in a 2-1 decision that the federal government isn't likely to win the appeal. It refused to lift a federal judge's injunction banning the changes from taking effect before the litigation is resolved.
Two judges "chose to misinterpret the facts and the law," in denying the administration's request, Brandi Hoffine, a White House spokeswoman, said in an e-mail. "The president's actions were designed to bring greater accountability to our broken immigration system."
The Justice Department is reviewing the ruling and considering its next steps, which might include asking the full panel of the New Orleans appeals court to reconsider its request, according to the administration.
The majority of the court disagreed with the administration's argument that the states didn't have a legal right to challenge the policy.
Texas, in particular, the judges said would be forced to spend millions of dollars providing drivers' licenses and other permits to undocumented immigrants.
By providing the protected immigrants with eligibility for federal and state benefits, the administration commits actions judges can review, wrote Judge Jerry Smith, an appointee of President Ronald Reagan, a Republican. Judge Jennifer Elrod, an appointee of Republican President George W. Bush agreed with Smith.
Drastic change
"Telling illegal aliens that they are now lawfully present in this country, and awarding them valuable government benefits, is a drastic change," Texas Attorney General Ken Paxton said in an e-mailed statement following the verdict. "We will continue to fight the brazen lawlessness that has become the trademark of the Obama administration."
The issue should be left to political branches, not courts, to decide, Judge Stephen Higginson, an Obama appointee, wrote in a dissent from the majority. He said 185 members of Congress weighed in on the issue in support of the administration while 113 members of Congress backed the states.
Political nature
"The political nature of this dispute is clear," he said. "The order in which non-citizens without documentation must be removed from the United States must be decided, presently is being decided, and always has been decided by the federal branches."
The ruling against the White House was widely expected because of the political makeup of the judicial panel, said David Berg, a Houston attorney who has been tracking the immigration litigation and isn't involved in the case.
"The 5th Circuit is the most conservative in the nation and two members of this panel, both Republican appointees, are among the most conservative," Berg said in an interview. "They would've had to rise well above their ideology to rule in Obama's favor."
The ruling is a further setback for both the Obama administration and for immigrant families, said Kica Matos, a spokeswoman for the Fair Immigration Reform Movement.
"We see this as a temporary setback, but one that we don't take lightly," Matos said. "It's extremely disappointing."
Republican lawmakers have seized on the executive actions, accusing Obama of ignoring the Constitution and making the move to shore up Latino support for Democrats in 2016.
The Senate confirmation of Loretta Lynch as attorney general was held up in part over opposition to the initiative, and House Republicans threatened to withhold funds for the Department of Homeland Security over it, and passed a bill just before funding was set to expire.
Texas Gov. Greg Abbott, who filed the challenge, and the White House have vowed to take the fight to the U.S. Supreme Court. That might extend the litigation into next year.
"If the Supreme Court doesn't take it up until June 2016, that puts us right in the middle of the presidential election," Michael Dorf, a Cornell University law professor following the case, said in an interview before the decision.
Presidential contenders
Texas is home to Sen. Ted Cruz, a Republican presidential candidate, and former Governor Rick Perry, a potential contender. The states that joined the lawsuit include Wisconsin, whose Governor Scott Walker is a possible candidate, and Florida, where U.S. Senator Marco Rubio has declared his candidacy. Former Florida Governor Jeb Bush hasn't formally entered the race.
Cruz, Rubio and New Jersey Governor Chris Christie, another possible candidate for the party's nomination, were among the more than 100 senators, representatives and governors who urged the appeals court to block the law.
Tuesday's ruling ensures immigration will have a prominent spot on the political agenda for 2016, Matos said.
"You can't go hating on Latinos and being extremely anti- immigrant and expect that you will be elected president," she said.
The appeal is Texas v. U.S., 15-40238, U.S. Court of Appeals for the Fifth Circuit (New Orleans). The lower-court case is Texas v. U.S., 1:14-00254, U.S. District Court, Southern District of Texas (Brownsville).
With assistance from Justin Sink and Angela Greiling Keane in Washington.
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