Small business owners in six states that don't run their own exchanges filed the lawsuit. They plan to appeal Friedman's ruling, said their attorney, Sam Kazman, general counsel at the Competitive Enterprise Institute.
"The court’s ruling today delivers a major blow to the states that chose not to participate in the Obamacare insurance exchange program," Kazman said. "It is also a blow to the small businesses, employees and individuals who live in those states as well.
"In upholding this IRS regulation that is contrary to the law enacted by Congress, this decision guts the choice made by a majority of the states to stay out of the exchange program," he said.