Thomas Schroeder II and Bradley Jacobsen, both of Wall Lake, and Steve Schroeder, of Odebolt, were arrested last month for allegedly kidnapping and beating a migrant worker, Rafael Trevino, on Aug. 3, 2009.
Iowa law requires prosecutors to file formal charges for most felonies within three years of the crime.
The Daily Times Herald newspaper in Carroll says the charges were dropped this week after the Iowa Attorney General's Office, which was prosecuting the case, failed to file the formal charges before the deadline.
Attorney General Tom Miller has ordered his staff to review internal case management practices.
Trevino's attorney, Marinda van Dalen, says it's a "real injustice."