A Federal Appeals Court on Monday blocked measures announced by US President Barack Obama last year, that give work permits and deportation protection to some four million undocumented migrants.
Obama issued decrees in November 2014 allowing people who illegally immigrated to the United States but whose children are legal residents, to remain in the country while their legal status is resolved and be allowed to work.
The measure affects more than four million people who would otherwise risk deportation.
Obama's measures, however, were quickly challenged by conservative governors of 26 US States, arguing that it was up to Congress, and not the president, to enact immigration reform.
A federal court in Texas in February ruled in their favor.
On Monday, in a 2-1 vote, the Fifth Circuit Appeals Court based in New Orleans ruled against an Obama administration request to overturn the February ruling.
There are nearly 12 million unauthorized immigrants living in the United States. Republicans and Democrats agree that sweeping immigration reform is long overdue, but bitterly disagree on how to do it.
The Obama administration insists that the president has the authority to issue such immigration decrees.
Now they must take their case to the United States Supreme Court, and it's unclear if a ruling can be issued before Obama leaves office in January 2017.
Monday's ruling asserts “that the separation of powers remains the law of the land, and the president must follow the rule of law, just like everybody else,” said Texas Attorney General Ken Paxton, whose state is a plaintiff in the lawsuit.
Paxton said that the Obama administration had “aggressively disregarded the constitutional limits on executive power.”
Democratic Senator Bob Menendez, who supports immigration reform, said that the ruling was disappointing but not surprising.
He said, however, that now the path was open for the Supreme Court to have a final say on the measures.