U.S. District Court Judge John G. Heyburn II issued a 23-page decision, ruling the law unfairly treat's Kentucky's gay and lesbian citizens in "a way that demeans them."
The lawsuit, Burke v. Beshear, was brought by four gay and lesbian couples married in other states who sought recognition from Kentucky.
Voters in the Bluegrass State approved a constitutional ban on gay marriage in 2004 that included an out-of-state clause.
Heyburn did not say whether Kentucky would have to begin performing same-sex marriages, as the question was not part of the lawsuit.
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