US District Judge Margaret Garnett in Manhattan said she felt constrained by Supreme Court precedents to dismiss the murder charge, saying it was legally incompatible with the two stalking charges Mangione still faces while acknowledging that ordinary people might be dumbfounded by the outcome.
Mangione, 27, still faces possible life in prison without the possibility of parole if convicted on the stalking charges.
Dominic Gentile, a federal prosecutor, told Garnett at a routine court hearing on Friday the government has not decided whether it will appeal.
Thompson, who led UnitedHealth Group's health insurance business, was shot and killed on December 4, 2024 outside the Hilton hotel in midtown Manhattan.
Mangione pleaded not guilty to all charges stemming from Thompson's death, and has been jailed since his arrest in Pennsylvania five days after the killing.
While public officials widely condemned Thompson's killing, Mangione became a folk hero of sorts to some who decry high costs for medical care and health insurer practices.
Garnett has scheduled jury selection in the case to begin in September, with the evidence phase of trial beginning October 12.
Mangione has also pleaded not guilty to separate murder, weapons and forgery charges in a New York state court in Manhattan.
No trial date in that case has been set.
Prosecutors in that case suffered their own setback in September, when the judge dismissed two terrorism-related counts against Mangione.
In a 39-page decision, Garnett said federal prosecutors could pursue their murder and weapons charges only if the stalking charges qualified as "crimes of violence".
She said the charges did not qualify because any use of force could be achieved through reckless, as opposed to intentional, conduct.
The judge said prosecutors and Mangione agreed that this fell short of the kind of "force" the Supreme Court required to make out a crime of violence.
Garnett acknowledged the "apparent absurdity" of the legal landscape, saying no one would seriously question that Mangione's alleged conduct - crossing state lines to kill a specific healthcare executive with a handgun equipped with a silencer - was violent criminal conduct.
She said her analysis may strike ordinary people, and many lawyers and judges, as "tortured and strange" but it "represents the court's committed effort to faithfully apply the dictates of the Supreme Court to the charges in this case. The law must be the court's only concern".
In a separate decision, Garnett rejected Mangione's bid to exclude evidence seized from his backpack when he was arrested.
Mangione argued that evidence found in the backpack, including a 9-millimetre pistol, silencer and journal entries, should be suppressed because police obtained it without a warrant.
The judge said it was standard practice for local police to search closed bags that might reasonably contain dangerous objects, and the police had probable cause to conduct a search.
She also said the contents would have been discovered inevitably through a federal search warrant.
