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That meant House Democratic leaders had to pass the Senate bill as is, without any changes - including the “penalty” language the Senate adopted. And that was a critical factor in Judge Hudson’s thinking.

“In the final version of the ACA enacted by the Senate on Dec. 24, 2009, the term ‘penalty’ was substituted for ‘tax’ in Section 1501(b)(1),” Judge Hudson wrote. “A logical inference can be drawn that the substitution of this critical language was a conscious and deliberate act on the part of Congress.”

Cato’s Mr. Cannon said that even if the judge had upheld the penalty as a tax, it still could have been found unconstitutional because it doesn’t fit under the authorized types of taxes: income, excise or direct taxes.

“Even if they were right it was a tax, it would be an unconstitutional tax,” he said.

Democratic lawmakers tried to portray the ruling as a political decision, rather than a legal one.

Reps. Sander M. Levin and Pete Stark, two high-ranking Democrats on one of the House committees with jurisdiction over the law, pointedly noted that Judge Hudson was appointed by a Republican president, and accused him of “judicial activism.”

More than 20 lawsuits have been filed challenging the overhaul, and both sides expect the buck ultimately to stop with the U.S. Supreme Court.

c Seth McLaughlin contributed to this article.