In a decision handed down late Wednesday, State District Judge Jo Ellen Grant said the law, passed by state lawmakers as an anti-terrorism measure in 2002, illegally steps on federal immigration law.
The ruling applies only in Jefferson Parish. A similar challenge is pending in neighboring New Orleans.
The judge threw out the state's case against Omar Barrientos, who was stopped by police last March for having an expired license plate. At the time, he was carrying somebody else's Texas identification card, authorities said.
Under the law, any "alien student" or "nonresident alien" who drives in Louisiana must carry documents proving they are in the United States legally. Violators face up to a year in jail and a $1,000 fine.
The law also requires state authorities to report violators to the federal Immigration and Naturalization Service.
Grant said the definition of "alien student" or "nonresident alien" was different from that contained in federal law. The identification requirement "exceeds the standard contemplated by federal immigration law," the judge wrote.
Melissa Crow, an attorney with the National Immigration Law Center who argued against the law, said the legislative history of the law's passage showed its intended purpose was to stop the use of fraudulent driver's licenses. However, most people booked with the offense do not have licenses, she said.
"We don't know if they pull someone over because they look Latino or if they are pulling over a bunch of people for traffic offenses," Crow said.