A federal judge in Texas has ruled that a longstanding programme protecting migrants who came to the US as children from deportation is unlawful.
The judge, however, did not grant a request to terminate those protections over the next two years.
Nine Republican-led states sued to end it, claiming they have to spend millions of dollars to support illegal immigrants living in the US.
More than half-a-million people – known as Dreamers – are currently enrolled.
In his Wednesday ruling, Judge Andrew Hanen kept the programme closed to new applicants but suspended part of the ruling to allow current Daca recipients to renew their enrolment. He said he was “sympathetic” to their situation.
Judge Hanen said he believes the fate of the programme should be decided by the US congress rather than by the courts or the president.
The Biden administration is expected to appeal the ruling, potentially setting the stage for a showdown at the US Supreme Court.
In a statement on Wednesday evening, the White House said it is “deeply disappointed” in the ruling and “will continue to defend this critical policy from legal challenges”.
The federal programme was brought in by Barack Obama’s administration in 2012.
To be eligible, migrants must have arrived in the US before turning 16 and before June 2007, been under 31 as of June 2012, been in school or graduated high school, and have no legal status in the US.
It shields recipients from deportation and allows them to be granted work authorisation, get a driving licence, and apply for education financial aid. It does not provide a pathway to citizenship.
After surviving a previous attempt to end the programme during the Trump administration in 2020, Daca was dealt a blow in 2021 under a first ruling by Judge Hanen. His decision said it had been illegally created without congressional authorisation.
That ruling allowed Daca recipients to renew their status, but blocked first-time applicants from applying. The new ruling extends these same conditions.
It was appealed and sent back to Judge Hanen’s court after the Biden administration revised the programme.
“The Obama and Biden programs are practically indistinguishable in both the negative harms that they will have on this country and in the illegal means used to implement them,” Texas Attorney General Ken Paxton said in February.
The Biden administration, which has repeatedly defended the programme, in April announced expanded health coverage for recipients.
“Dreamers are Americans. Many have spent the majority of their lives in the United States,” President Biden said in a statement marking the programme’s eleventh anniversary on 15 June.
“They are our doctors, our teachers, and our small business owners.”
In June, Felix Villalobos, an attorney with the Refugee and Immigrant Center for Education and Legal Services, told the BBC that the potential termination of Daca would mean many recipients will be forced to “live in the shadows”.
“They’ve been given the opportunity to live a basic life. For it to be taken away, I think, is a very hard pill to swallow,” he said.
The Daca initiative is now likely to head to the Supreme Court for a third time.
The court previously heard a Daca case in 2019, but took no action. Then in 2020, the court ruled 5-4 that President Trump had improperly moved to end the programme.
Government statistics show that, of the programme’s approximately 580,000 recipients, about 80% were born in Mexico.
While the recipients are spread across the US, the largest number – 30% – are in California, followed by Texas, where 16% live.