A federal appeals court judge overturned the first-degree murder conviction of a security contractor involved in the 2007 shooting in Baghdad's Nusoor Square at the height of the Iraq War - a deadly encounter that left 17 people dead. They were all jailed for 30 years. Slatten, who was serving a life sentence, had filed an appeal asking the court to sentence him separately from his three co-defendants because he was the only one facing a murder charge for firing what prosecutors said were the first shots in the massacre.
The US Court of Appeals for the District of Columbia Circuit on Friday found that "the district court abused its discretion in denying Slatten's motion to sever his trial from that of his co-defendants and therefore vacates his conviction and remands for a new trial".
The judges determined those sentences violated the constitutional prohibition against cruel and unusual punishment because prosecutors charged them with using military firearms while committing another felony.
NBC News could not immediately reach the four men's lawyers for comment.
Senior U.S. District Court Judge Royce Lamberth sentenced the four in April 2015.
Prosecutors accused the men of illegally unleashed "powerful sniper fire, machine guns and grenade launchers on innocent men, women and children".
U.S. Circuit Judge Judith W. Rogers disagreed, saying the claim "lacks any merit whatsoever", calling the 30-year terms "appropriate" for the crime and that other security guards chose not to fire their weapons at all that day.
The guards said that they acted in self-defense after coming under AK-47 gunfire as they cleared a path back to the nearby Green Zone for another Blackwater team that was evacuating a USA official from a nearby vehicle bombing.
The four men were part of a Blackwater convoy tasked with providing security for a USA diplomat.
The machine-gun charge was always contentious, even inside the Justice Department, where some prosecutors believed it was unfair to add an extra penalty for using a weapon that the United States government required them to carry.
The court also threw out one of Liberty's convictions for attempted manslaughter. On September 16, 2007 they were involved in a shooting that trained strained global relations and drew scrutiny to the role of American contractors in war-torn Iraq.
A former Navy SEAL, its CEO Erik Prince sold off his stake at Blackwater in 2010 following the year-long controversy over the company's operations in Iraq.