An involuntary manslaughter charge against the Alpha Upsilon chapter of Beta Theta Pi also was dismissed.
Several fraternity members were bound over for trial on charges including hazing, furnishing alcohol, reckless endangerment, and tampering with evidence.
Shaken by the judge's ruling, Piazza's parents said they would support the prosecutors' decision to refile the charges, said Tom Kline, an attorney for Jim and Evelyn Piazza.
Closing arguments are underway on the sixth day of a hearing for 16 Penn State fraternity brothers charged in a pledge's death.
This story is breaking and will be updated with the latest information. In addition, four of the total 18 defendants had all of their charges dropped.
A preliminary hearing will resume for a seventh day on Thursday.
"There were some errors of law we believe", she said. Two other students waived their right to a preliminary hearing on whether there's enough evidence for them to stand trial.
He suffered for hours from severe head and abdominal injuries before his frat brothers called an ambulance the next morning. Surveillance footage from the fraternity house was played in court.
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"To say they could not foresee this as a unsafe event, is absolute incredulous", Parks Miller said during closing arguments. They said that Piazza knew beforehand that the objective of the event was to get pledges drunk.
Defense lawyers say Piazza's death was tragic but unforeseeable.
Piazza, of Lebanon, New Jersey, died of multiple injuries suffered while drunkenly falling multiple times, including twice down a flight of stairs, during hazing activities on the night of February 2 at the fraternity house near the Penn State campus in State College.
The fraternity's permit from the Interfraternity Council to serve alcohol that night did not absolve them, she said.
She argued that the brothers who ran the different drinking stations for the gauntlet were part of a "whole chain" and were responsible for the consequences.
Piazza, 19, was in the Penn State frat house to attend a pledge bid acceptance ceremony when he consumed a risky amount of booze and fell down a large set of basement steps.
Rocco Cipparone Jr., an attorney for Michael Bonatucci, told BuzzFeed News in July that the prosecution's argument was "too much of a stretch", and that the charges against his client, including aggravated assault and involuntary manslaughter, were a "huge overreach". "Now all he did, to the best of their evidence, was bring a case of beer from one room to another and hand out five beers to five people who were not Timothy Piazza". "Nor did I know about it that evening".