A federal judge allowed a lawsuit challenging the legality of some ObamaCare subsidies to proceed on Monday, ruling against the Obama administration.

The judge in Oklahoma ruled that the state of Oklahoma has the legal standing to sue the federal government over federal subsidies in federally run health insurance exchanges.

The Affordable Care Act, or Obamacare, requires that each state has its own exchange where individuals can buy health insurance. If a state refuses to set up its own exchange, the federal government steps in and sets up the exchange for it.

Oklahoma Attorney General Scott Pruitt argues in the suit that the Affordable Care Act only provides federal subsidies for exchanges set up by the states, as opposed to the federal government. The subsidies allow the federal government to enforce the employer mandate in states that refused to set up their own exchanges.

"We're optimistic the court will recognize what states have known for months that the IRS disregarded the law by making the large employer mandate effective in Oklahoma or in any of the 33 other states without a state health care exchange," Pruitt said in a statement.