The court said in a 4-1 ruling that the judge in the retrial improperly allowed prosecutors to raise the prospect that he molested his daughter despite not presenting evidence to support that claim.
"The erroneous admission of speculative evidence and argument that the defendant molested his daughter, combined with the state's use of this evidence as the foundation of its case, requires that the convictions be reversed," Justice Brent Dickson wrote for the majority.
Camm's wife, Kimberly, and their children, 7-year-old Bradley and 5-year-old Jill, were shot to death in 2000 after returning home from swim practice. Camm, who had been a state trooper for more than a decade, left the force about four months before the slayings. Camm claims that he was playing a game of pickup basketball with friends at a local church when the slayings took place, and his alibi was originally supported by 11 witnesses. Camm has always maintained his innocence.
Prosecutors contended Camm left the basketball game, killed his family, then made the five-minute drive back to the church. He reported the deaths once he returned to the home in southern Indiana.
The Indiana Supreme Court did not dismiss the charges against Camm outright as his lawyers requested. They argued that insufficient evidence supported the jury's verdict that he murdered his wife and children.
Defense attorney Stacy Uliana said Camm was happy and relieved that the Supreme Court overturned his second trial even though the charges were not dismissed.
"We're overjoyed," she said. "This is just a step toward the ultimate goal of justice for Dave and his family."
The state attorney general's office, which handled the appeal, said it would file a petition for a rehearing with the Indiana Supreme Court.
"While we are disappointed that a new trial is required, we agree with the Court on the key point: There was sufficient evidence of Camm's guilt to support the jury's verdicts," said Attorney General Greg Zoeller. "Indeed, there was a mountain of evidence against Camm, distinct from the disputed testimony at issue in this opinion."
In 2004, the state appeals court overturned his first conviction. Camm was convicted again in 2006 and sentenced to life in prison without parole. Another man - Charles Boney – was convicted in 2006 of helping Camm with the killings.
In a dissenting opinion, Chief Justice Randall Shepard said the two reversals have "unnecessarily sanitized the evidence against David Camm."
"Part of the reason I regard reversal as unwarranted is the rest of the evidence the jury heard," Shepard wrote.
He said Camm claims he "came home to a horrific scene, concluded his son was warm and might still be saved, decided to go inside the house, called a distant police agency, turned down three suggestions that medical help be sent, and only then went back to the garage to administer CPR."