The U.S. Court of Appeals for the Second Circuit is mulling whether legal battlelines should be set in federal or state court in deciding a wide-ranging dispute over New York City’s relocation of asylum-seeking migrants.

The federal appeals court heard arguments on Tuesday from Pryor Cashman partner Todd Soloway in a dispute between a hotel operator and the town of Newburgh in Orange County. Soloway wants the case remanded to federal court, alleging that Newburgh is illegally using local zoning rules to try to oust the migrants from the Crossroads Hotel.