U.S. District Judge Ricardo Urbina said Justice Department prosecutors improperly built their case on sworn statements that had been given under a promise of immunity. Urbina said the government's explanations were "contradictory, unbelievable and lacking in credibility."
The decision throws out a case steeped in international politics. The September 2007 shooting in busy Nisoor Square left 17 Iraqis dead and inflamed anti-American sentiment abroad. The Iraqi government wanted the guards to face trial in Iraq and officials there said they would closely watch how the U.S. judicial system handled the case.
"We're obviously disappointed by the decision," Justice Department spokesman Dean Boyd said. "We're still in the process of reviewing the opinion and considering our options." Read more.