Observers expect the ongoing fight over diversions of military construction and drug interdiction funds to land back on the U.S. Supreme Court's calendar next year for a full review of the issues.

But on June 29, justices declined to review a lower court ruling that rejected a separate legal challenge by four environmental groups to the administration's reliance on a 1996 law that officials claim allows the bypassing of federal and local environmental and other rules to expedite wall construction. The groups contend the law violates the Constitution's separation of powers clause.

In the San Francisco appeals court ruling, justices said the power of the purse belongs to Congress in a 2-1 decision issued in two cases—one brought by 16 state attorneys general and another by the Sierra Club.

Of the 16 states, the court said California and New Mexico had standing, as did the Sierra Club in its lawsuit.

The high court had stepped in last year only to lift a lower court's block of wall construction while the Sierra Club challenge worked through the legal system.

“Today, the court reminded the President – once again – that no one is above the law,” California Attorney General Xavier Becerra said in a statement,

He also challenged Administration diversion in the 2020 DOD budget of more than $3.8 billion, of which $890 million had been allocated to California National Guard units to purchase equipment critical to responding to natural disasters and other emergencies. That case is ongoing.

“On a bipartisan basis, Congress has repeatedly refused to fund the President’s ineffective, wasteful border wall. The rulings by the Ninth Circuit are a great victory for the rule of law and our Constitution,” House Speaker Nancy Pelosi said in a statement, noting that the executive branch is subject to laws passed by Congress.

A Dept. of Homeland Security spokesman said in a statement the administration is "sorely disappointed in this decision.”

No "Unforeseen Military Requirement'

President Trump’s request for $5.7 billion for border wall construction in the appropriations bill for the remainder of 2019 was denied by Congress, which led to the longest partial government shutdown in history.

After Congress passed a bill with only $1.4 billion in wall funding, he declared a national emergency on the southern border and moved to use his authority to secure additional resources to build the wall.

In February 2019 Homeland Security asked DOD to fund 218 miles of wall, including projects near El Centro, Calif. and El Paso, Texas.

The San Francisco appeals court said that such a funding diversion must be based on unforeseen military requirements, with no transfer authority if funds requested had been denied by Congress.

“We conclude that the district court correctly determined that the border wall was not an unforeseen military requirement, that funding for the wall had been denied by Congress, and therefore, that the transfer was not permissibly invoked.”

With the allowed waiver of federal environmental rules, California and New Mexico alleged that the federal actions will cause “particularized and concrete injuries” to the environment and wildlife of their states.

In the Sierra Club case, the court ruled that its thousands of members who live along the border will be injured because the border wall is being built without compliance with federal or state environmental regulations.

“This ruling is a win for the rule of law, the environment, and border communities,” Dror Ladin, attorney with the American Civil Liberties Union, said in a statement. “We will be back before the Supreme Court to finally put a stop to this destructive wall.”

More Supreme Court Action

The high court last July overturned a lower court’s injunction to allow wall construction. A related challenge brought by House of Representatives’ Democrats is pending before the U.S. Court of Appeals in Washington, D.C.

The issue of plaintiff standing to stop funding transfers also remains to be clearly decided in another case still before the U.S. appellate court in New Orleans. That court rejected in January an El Paso, Texas federal judge's immediate halt to administration diversion of $3.6 billion in DOD construction funding, which allowed it to be used since then to award construction contracts.

But in briefs filed in March, El Paso County and the Border Network for Human Rights claim they have been "irreparably harmed" by the wallbuilding and await a full court ruling to grant them standing in appealing the merits of their case.