California’s drought regulators have lost a major lawsuit that could undermine their legal authority to stop farms and cities from pulling water from rivers and streams.

With California in its third punishing year of a historic drought, an appeals court ruled Monday that the State Water Resources Control Board lacks the power to interfere with so-called “senior” water rights holders and curtail their diversions of water from rivers.

The case stems from orders imposed by the state board in 2015, during the previous drought, when it halted farms and cities throughout the Central Valley from taking water from the Sacramento and San Joaquin rivers.