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

The U.S. Court of Appeals for the Third Circuit issued a decision on Alina Habba, a fiery Trump loyalist appointed to serve as the acting U.S. attorney in New Jersey.

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

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. 

Ashley Oliver is a reporter for Fox News Digital and FOX Business, covering the Justice Department and legal affairs. Email story tips to ashley.oliver@fox.com.

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