The ruling from a San Francisco judge was issued last week, but became public Tuesday.
In it U.S. District Judge Marilyn Patel said 55-year-old Ralph International Thomas was denied a fair trial because his defense attorney was incompetent.
Thomas was convicted in the murders of 22-year-old Mary Gioia and 18-year-old Greg Kniffen, who were beaten and shot in August 1985.
The so-called Deadheads were staying at the homeless camp prior to attending a Grateful Dead concert.
Thomas' attorney, A.J. Kutchins, said Tuesday his client is gravely ill and was recently moved to a prison hospital.
The state attorney general's office did not immediately respond to a request for comment.