Trump hit with setback as court rules Alina Habba unlawfully served as top federal prosecutor in New Jersey

An appellate court found on Monday that Alina Habba is unlawfully serving as the top prosecutor in New Jersey, delivering a blow to President Donald Trump as he fights to keep his preferred nominees in charge of U.S. attorneys’ offices in blue states.

The U.S. Court of Appeals for the Third Circuit said in a unanimous 3-0 order that a lower court was correct to disqualify Habba, a fiery Trump loyalist who previously served as the president’s personal defense lawyer.

The Trump administration could ask for a full panel of 3rd Circuit judges to reconsider the decision, or it could turn to the Supreme Court to weigh in. Fox News Digital reached out to the Department of Justice and a Habba spokesperson for comment.

A three-judge panel for the 3rd Circuit heard arguments on Habba’s appointment in October and grilled a Department of Justice lawyer over the unconventional way Trump and Attorney General Pam Bondi reinstalled Habba as U.S. attorney after her initial, temporary appointment expired.

TRUMP APPOINTS HABBA AS ‘ACTING’ US ATTORNEY AFTER JUDGES OUSTED HER

President Donald Trump sits in the courtroom with lawyers Christopher M. Kise and Alina Habba during his civil fraud trial at New York State Supreme Court on Oct. 17, 2023, in New York City. (Doug Mills-Pool/Getty Images)

Habba is one of several names who became jammed up in court proceedings over allegations that Trump sidestepped the Senate and improperly exploited loopholes in federal vacancy laws to keep his preferred prosecutors in place.

Habba’s case was the furthest along in the court process, but Lindsey Halligan and Bill Essayli, temporary U.S. attorneys in Virginia and California, respectively, are among those also facing high-stakes court challenges to their appointments.

The panel that heard Habba’s case comprised two appointees of former President George W. Bush and one appointee of former President Barack Obama.

The judges voiced skepticism of DOJ lawyer Henry Whitaker’s claims that Bondi had authority to fill the vacancy for the U.S. attorney of New Jersey after Trump fired the court-appointed one. Whitaker said the administration simply took advantage of “overlapping mechanisms” afforded to it by Congress.

TRUMP’S US ATTORNEYS IN BLUE STATES FACE LEGAL CHALLENGES THAT COULD UPEND KEY PROSECUTIONS

Alina Habba speaks during a panel discussion at the Conservative Political Action Conference on Feb. 20, 2025, in Oxon Hill, Maryland. (Andrew Harnik/Getty Images)

“In this case, the executive branch admittedly took a series of precise and precisely timed steps not to evade or circumvent those mechanisms but rather to be scrupulously careful to comply with them,” Whitaker said.

One of the judges said during the oral arguments that he viewed Habba’s case as unusual and possibly unconstitutional.

“Would you concede that the sequence of events here, and for me, they’re unusual, would you concede that there are serious constitutional implications to your theory here, the government’s theory, which really is a complete circumvention, it seems, of the appointments clause?” the judge asked.

Veteran D.C. lawyer Abbe Lowell, known for his involvement in lawsuits challenging the Trump administration, represented the defendants contesting Habba’s appointment.

Two sets of defendants facing run-of-the-mill charges brought the challenge to Habba, saying she should not be allowed to prosecute them because she was an invalid U.S. attorney.

TRUMP NOMINEES SQUEEZED BETWEEN ‘BLUE SLIPS’ AND BLUE OBSTRUCTION

U.S. Attorney General Pam Bondi speaks as President Donald Trump looks on during a press conference in the Oval Office of the White House on Oct. 15, 2025, in Washington, D.C. (Kevin Dietsch/Getty Images)

Habba had no path to Senate confirmation, in part because New Jersey’s Democratic senators, Cory Booker and Andy Kim, did not approve of her through the Senate’s blue slip tradition.

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That precedent has drawn Trump’s ire as Senate Judiciary Committee Chairman Chuck Grassley, R-Iowa, stands firmly behind blue slips, which require home state senators to approve of U.S. attorney and district judge nominees.

Trump recently conveyed, through his firing of former U.S. Attorney Erik Siebert, that earning Democratic senators’ approval could be disqualifying in his view, setting up a stalemate with the upper chamber over his nominees in blue states.

This is a breaking new story and will be updated.