The ruling is a blow to Attorney General Jeff Sessions and the Justice Department, which had attempted to coerce so-called sanctuary jurisdictions into helping the Trump administration’s immigration agenda.

In September, in a case brought by the Chicago, a lower court had held the Justice Department couldn’t deny $254 million to jurisdictions nationwide that refused to notify federal authorities when an undocumented immigrant was in their custody and hold the inmate in jail. The Trump administration had sought to limit that earlier decision only to Chicago.

But in a 2-3 ruling from an appeals court panel, the judges said Thursday, “The district court did not err in determining that the City established a likelihood of success on the merits of its contention that the Attorney General lacked the authority to impose the notice and access conditions on receipt of the Byrne JAG grants, and did not abuse its discretion in granting the nationwide preliminary injunction in this case.”