U.S. District Judge Jesse Furman in Manhattan denied the administration’s motion to dismiss the lawsuit, which is backed by 18 states and the District of Columbia.
The U.S. Department of Commerce, which includes the Census Bureau, could not immediately be reached for comment.
The department said in March that Commerce Secretary Wilbur Ross decided to add the citizenship question after the Department of Justice requested it, in order to better enforce federal voting law.
A group of states and cities and several immigrant rights groups have sued to block the proposed question. They said it could lead to undercounting in states with large immigrant populations, jeopardizing their political representation and access to federal funds.
Furman said in Thursday’s decision that while Ross had the power to include the question, which was included in the census prior to 1960, he may have used it improperly. The judge also said his stated reason may have been “pretextual.”
The census, which is mandated under the U.S. Constitution and takes place every 10 years, counts every resident in the United States. It is used to determine the allocation to states of seats in the U.S. House of Representatives and the distribution of billions of dollars in federal funds to local communities.
Reporting by Brendan Pierson in New York; Editing by Bernadette Baum