Texas' effort to license the facilities shortly after they opened was stopped in 2016 by an Austin judge.
But the 3rd Texas Court of Appeals on Wednesday overturned the lower court. The appeals court said the advocacy group Grassroots Leadership and several parents who were detained in the facilities didn't have the legal standing to challenge the state agencies seeking to issue licenses.
Amy Warr, a lawyer for Grassroots Leadership, said the state couldn't move forward with licensing while appeals were still pending. Grassroots Leadership has two weeks to decide whether to seek a rehearing at the appeals court.
But the group's executive director, Bob Libal, said he was afraid the ruling may lead to "kids languishing in these prisons for years."
"If the parents of children who are harmed by the licensing of this detention center don't have standing, I'm not sure who does," Libal said.