CNN White House correspondent Jim Acosta smiles as he departs after a judge temporarily restored his White House press credentials following a hearing at U.S. District Court in Washington, Nov. 16, 2018.
In response, CNN attorney Ted Boutrous said the government had a "warped view" of the First and Fifth amendments.
Kelly - who rescheduled Thursday's planned hearing for Friday morning - heard lengthy oral arguments earlier in the week about the cable news network's request for a temporary restraining order and preliminary injunction. Without this credential, a daily White House correspondent like Acosta effectively can not do his or her job.
"This was a bad day for the president", Boutrous responded.
In a statement, CNN said, "We are gratified with this result and we look forward to a full resolution in the coming days".
The decision is a total win for CNN and other news organizations fighting for press freedoms.More news: Michelle And Barack Obama Did Couples Therapy, She Says In Memoir 'Becoming'
Because Acosta's work requires his physical presence at the White House or on the road with the President, he often goes weeks or months without visiting CNN's Washington bureau. This legal conclusion could protect other reporters from retaliation by the administration.
Last week, the White House suspended Mr Acosta's press pass after he sparred with Mr Trump at a news conference, in which the president branded the journalist an "enemy of the people".
But the judge will rule on all of that later.
Mr Kelly said Mr Acosta's credentials would be returned immediately and reactivated to allow him access to the White House. After all, the president has fueded with Acosta and CNN for a long time.
The defendants include Trump, press secretary Sarah Sanders, and chief of staff John Kelly.
Sanders said in a statement that Acosta's privileges had been revoked due to his interaction with the intern.
It's very possible the White House drops the case and instead comes up with some level of varying standards that could again be challenged by the press in court. Of particular issue is whether his pass was taken away because of his rude behavior or due to the content of his reporting.