The 2nd U.S. Circuit Court of Appeals overturned the convictions of Charles Schwarz, Thomas Wiese and Thomas Bruder.
Prosecutors said Louima was tortured in a police station bathroom in 1997 following his arrest in a melee outside a Brooklyn nightclub. They said a handcuffed Louima was pinned down and sodomized with a broken broomstick.
Officer Justin Volpe, who wielded the broomstick, pleaded guilty and was sentenced to 30 years.
The appeals court said Schwarz's convictions for civil rights violations must be thrown out and a new trial ordered because he was denied effective assistance of counsel and because the jury was improperly exposed to prejudicial information during deliberations.
The court also held that convictions against Schwarz, Wiese and Bruder at a second trial for conspiracy to obstruct justice must be thrown out for insufficient evidence.
The Louima case and other high-profile incidents including the 1999 death of an unarmed West African immigrant, Amadou Diallo, in a hail of 41 bullet fired by four white officers ignited protests accusing police of singling out minorities for abuse, often through racial-profiling.