In a Thursday ruling, U.S. District Judge Susan Illston of the Northern District of California struck down a 1986 law allowing the issuance of national security letters, a form of administrative subpoena, The Washington Post reported.
The judge stayed her ruling for 90 days to give the government time to appeal, newspaper.
The FBI has used the law to request Internet companies and other electronic communication service providers to secretly turn over subscriber information on American customers, including from whoever the agency is investigating, the Post said. The requests do not require a warrant.
FBI officials contend the security letters, allowed since 2001 terrorist attacks, are necessary to prevent future attacks.
The vagueness about what type of information is allowed to be sought troubles some legal experts.
"NSLs are unique in their invasiveness and lack of judicial oversight," Matt Zimmerman, a senior staff attorney with Electronic Frontier Foundation, which sued on behalf of an unidentified telecommunications company, told the Post.
Justice Department spokesman Dean Boyd said the department is reviewing the judge's order and declined further comment.
The FBI has averaged 50,000 letters a year since the 2001 attacks. The Justice Department said in 2011 it made 16,500 requests for data on 7,200 Americans.
Illston said in her ruling there might be situations where disclosing the receipt of a letter could jeopardize an investigation, but often that is not the case, "rendering the statute impermissibly overbroad."
She said the FBI's liberal use of the law "creates too large a danger that speech is being unnecessarily restricted."