The panel's ruling in favour of immigrants is a victory not only for Washington and Minnesota - the states that sued - but for Facebook, Google and Microsoft, which said in court papers that the measure would hinder their global businesses.
The public "has an interest in free flow of travel, in avoiding separation of families, and in freedom from discrimination," the three-judge panel said in a 29-page ruling.
The measure has engendered lawsuits from coast to coast that present early and crucial tests of the president's unilateral ability to decide who threatens the nation. Opponents of the ban argue it violates due process and equal-protection rights, and runs afoul of the First Amendment's prohibition of favor for any one religion.
The Justice Department is considering its options, a spokeswoman said. A White House official said its lawyers are reviewing the decision and don't plan to comment immediately beyond the president's tweet.
Washington state Solicitor General Noah Purcell argued to the appeals panel on February 7 that Trump's statements as a candidate were ample proof that the ban was intended to discriminate against Muslims. "It's remarkable to have this much evidence of intent," he said.
'Complete shutdown'
In a December 7 statement posted on his website, Trump had called "for a total and complete shutdown of Muslims entering the United States until our country's representatives can figure out what's going on."
August Flentje, representing the Justice Department, reminded the appeals panel during the hearing that a Boston federal judge in a separate case refused to consider Trump's statements. The order doesn't target Muslims, he said.
Since US District Judge James Robart temporarily blocked Trump's ban, refugees and travelers have been rushing to the US The executive order had set off chaos as states, companies, universities, citizens and refugees struggled with the ramifications.
On Wednesday, Trump read a law that gives the president authority to stop the entry of "any class" of foreigner.
"You can suspend, you can put restrictions, you can do whatever you want," Trump told a conference of police chiefs and sheriffs in Washington. "It just can't be written any plainer or better."
'Draconian restriction'
Since the ruling, the president, a 70-year-old Republican, has sent Twitter messages excoriating Robart as a "so-called judge."
Trump's order bars Syrian refugees indefinitely, and blocks for 120 days all others fleeing their homelands claiming persecution or fear of violence. No citizens of Syria, Iran, Iraq, Yemen, Somalia, Libya or Sudan could enter the US for 90 days.
Washington and Minnesota argued that the ban hurt residents and businesses, and their case was bolstered by a documents filed by Facebook, Google and Microsoft and a declaration by former government officials, including former secretaries of state John Kerry and Madeleine Albright, former CIA directors Michael Hayden and Leon Panetta and former United Nations Ambassador Susan Rice.
In the suit, the states argued that the ban had an immediate impact on companies by limiting their ability to conduct business and recruit, and harmed universities by stranding faculty and students. Washington's lawyers argued the travel ban is a "draconian restriction."
Trump's January 27 executive order followed campaign promises to stop Muslims from entering the country and roiled world politics. It shut out citizens of Iran, Iraq, Libya, Somalia, Sudan, Syria and Yemen, which Trump argues nurture enemies of the US. The government recommended that more than 1200 people not be allowed on flights and revoked about 60,000 visas.
The appeals court refused to reinstate Trump's order after a Seattle judge halted enforcement while courts decide whether it's constitutional.
The executive order has been the most consequential act of a young and aggressive administration that wants to minimize America's engagement with the world. Trump and his advisers see Islamist terrorism as a threat best defused by halting the flow of people who might be secretly planning attacks.
The president's action initially denied entry to an Iraqi who helped U.S. military, professors at University of Massachusetts and a student seeking to bring her daughter for medical treatment. The ban set off angry protests nationwide and attracted a flurry of lawsuits and adverse rulings.
None was more sweeping than that of Robart in Seattle. Washington and Minnesota won the order temporarily blocking the ban nationwide after arguing it hurt their residents and employers including Microsoft, Amazon.com Inc. and the Mayo Clinic.
The fight is far from over. The court battle so far has focused on whether the president's order should be paused while courts weigh larger issues. Robart already ordered both sides to submit additional arguments focusing on the substance of the case: whether the states have a right to sue and whether Trump's order discriminates against Muslims.
