Checks and Balances Scenario Analysis

In the context of the U.S. system of government, the principle of checks and balances ensures that no one branch of government becomes too powerful. Each branch—executive, legislative, and judicial—has specific powers that enable it to check the functions of the others. Consider the following hypothetical scenario:

Imagine that Congress passes a law significantly limiting the powers of federal regulatory agencies, and the President signs this law into effect. However, a group of affected states files a lawsuit against the federal government, claiming that the law is unconstitutional. Which of the following actions best exemplifies the system of checks and balances in this scenario?