A federal appeals court said on Monday that Alina Habba had been serving unlawfully as the U.S. attorney in New Jersey, dealing a blow to the Trump administration and most likely setting up a showdown at the Supreme Court. In its ruling, the three-judge panel, based in Philadelphia, affirmed an earlier ruling by a Federal District Court judge, shooting down each of the government’s arguments for why Ms. Habba could continue to serve. In their opinion, the judges wrote that the Trump administration appeared to have become frustrated by the legal and political barriers that have prevented its preferred U.S....