Current and former third-party candidates contend that the debate commission is partisan toward Republican and Democratic candidates and, under federal law, should not be permitted to sponsor the debates.
The debate commission argued that it excluded third-party candidates such as Ralph Nader and Pat Buchanan from the audience in 2000 because it feared they would disrupt the live telecast of the debates.
Kennedy said there may have been valid reasons to exclude Nader and Buchanan, but found there was no basis to prevent every other third-party candidate from attending.
Nader and Buchanan are among those who filed the lawsuit, along with candidates from the Natural Law, Constitution, and Green parties.
Jason Adkins, a lawyer representing the third-party candidates, said the decision "creates a huge cloud over the legitimacy of the CPD to sponsor these upcoming debates."
But Janet Brown, executive director of the debate commission, minimized the importance of the ruling.
"The CPD's sole objective with respect to this issue is to avoid disruption of a live, televised event," Brown said in a statement. "The CPD will continue to operate in accordance with FEC regulations governing debate sponsors."
The debate commission, which has sponsored all presidential debates since 1988, only allows candidates with at least 15 percent support in national polls to participate in its debates. None of the third-party candidates qualified in 2000.