In a 2-1 decision, the court sided with defense attorneys who argued the 30-year minimum attached to crimes committed with a machine gun should not apply to the other three contractors because they were in a war zone and the USA government required them to carry the weapons.
Three other former Blackwater agents - convicted on manslaughter charges stemming and each receiving 30 years - will be resentenced for their roles in the deaths. The judges said Slatten, who was the only defendant charged with murder, should have been tried separately from the other three and that a new trial would allow him to introduce evidence that he wasn't the first to open fire.
They also ruled that the 30-year sentences for Slough, Liberty and Heard violated "the Eighth Amendment prohibition against cruel and unusual punishment".
A spokesman for the USA attorney's office in Washington said prosecutors were still reviewing the decision and had no immediate comment. "The Court therefore remands for the resentencing of Slough, Liberty and Heard", the ruling said.
In a 2007 incident, 14 Iraqis were killed in Baghdad's Nisour Square by Blackwater security employees protecting a four-truck convoy of State Department diplomats.
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 American security contractors worked for the Moyock-based company and fired machine guns and launched grenades into a traffic circle in Baghdad.
The guards claimed they were defending themselves after being shot at.
The four men were convicted in October 2014. That statute, typically employed against gang members or bank robbers, had never before been used against overseas security contractors working for the USA government.
Lamberth sentenced the three men to time served on their other convictions for manslaughter and attempted manslaughter, as defense attorneys sought, but did so saying he expected he could resentence them if the firearms enhancement was reversed. The high-profile incident called into question the role played by USA security contractors in Iraq. During his trial, prosecutors said he saw killing Iraqis as "payback for 9/11".
Blackwater Worldwide - whose founder and former CEO Erik Prince is the brother of current Secretary of Education Betsy DeVos - has since changed its name to Xe Services and later to Academi.