The American Civil Liberties Union filed the lawsuit in January on behalf of four couples who said the state's decision to freeze benefits for same-sex couples violated their rights. The couples cited concerns such as having a partner legally recognized as a child's second parent.
The gay and lesbian couples married in Utah after a federal judge overturned the state's same-sex marriage ban Dec. 20. Those weddings came to a halt Jan. 6 when the Supreme Court granted the stay.
Utah officials argued that they had no choice but to hold off on benefits until an appeals court rules on the state's same-sex marriage ban.
U.S. District Judge Dale Kimball disagreed in his ruling Monday, saying Utah's decision to freeze all benefits put the couples in an unacceptable legal limbo regarding adoptions, child care and custody, medical decisions and inheritance, among other things.
"These legal uncertainties and lost rights cause harm each day that the marriage is not recognized," Kimball wrote.
He stayed his ruling for 21 days to allow the state an opportunity to appeal the ruling to the 10th U.S. Circuit Court of Appeals in Denver.
Utah officials didn't immediately have any comment.
The ruling has no bearing on a decision pending from the 10th U.S. Circuit Court of Appeals in Denver about the constitutionality of the same-sex marriage ban that Utah voters passed in 2004.
The couples who brought the lawsuit celebrated the ruling.
"It's nice to see our relationships recognized with such compassion," said Marina Gomberg. "It's a big win for Utah and for Utah families."
She said the ruling means they can once again begin planning to have children. The couple said they didn't want to start a family without knowing they would be able to both be legally recognized parents.
But the legal limbo isn't completely over. The state may still appeal, and what happens with adoptions remains unclear.
On Friday, the Utah Supreme Court ordered a temporary halt of several district judges' orders requiring the state health department to issue birth certificates in adoptions by same-sex parents. The attorney general's office praised the decision, saying the stay will remain in effect until the issue has been resolved by the court. The court has not yet announced a date for oral arguments.
Matthew Barraza and Tony Milner married in December and have a pending request to have Milner recognized as a legal parent of their 5-year-old son, Jesse. Barraza said the ruling has made him and his husband ecstatic and hopeful, but they remain cautious.
"We're happy, obviously with it, but we've learned also to not pop the champagne just yet," Barraza said.
The conservative Sutherland Institute of Utah decried the ruling in a statement, saying it rewards "judicial overreaching" and gives too much merit to a "novel ruling" by one judge.
"Our system is weaker when judicial gamesmanship is not kept in check," said Bill Duncan, the institute's director of the center for family and society. "We trust the 10th Circuit will do that quickly."
The ACLU argued that the marriages performed during the 17-day window when gay marriage was legal are valid no matter what the appeals court rules.
In issuing the freeze in early January, Gov. Gary Herbert told state agencies to hold off on any new benefits for the couples until the courts resolve the issue. Agencies were told not to revoke anything already issued, such as a driver's license with a new name, but were prohibited from approving any benefits.
The state tax commission announced, however, that newly married gay and lesbian couples can jointly file tax returns for 2013.
The state has made clear it was not ordering agencies to void the marriages, saying instead that validity of the marriages will ultimately be decided by the 10th Circuit, which is weighing the state's appeal.
The 10th Circuit heard arguments in Utah's case in early April, and a ruling is expected soon.