Enders' lawyer, Donald F. Manno, of Cherry Hill, said the cross was not visible to the African American family.
He sought to dismiss the bias intimidation charge, arguing that his client's actions didn't meet the criteria because there was no attempt to intimidate and no intended victim.
The Superior Court of New Jersey's Appellate Divison agreed, calling the indictment "materially deficient" because it failed to allege required elements of a bias charge - that a defendant committed the act with a "bias intent" and against an identifiable victim.
Prosecutors contended that a grand jury could have reasonably concluded that anyone who witnessed the cross-burning, near a highway, could have been intimidated.
But the appeals court said the state's bias intimidation law "clearly contemplates an identifiable victim, not an abstract or hypothetical victim."
In a statement Wednesday, Burlington County Prosecutor Robert D. Bernardi said: "We are evaluating the Appellate Court's decision to determine what our options might be concerning an appeal."
Manno, who argued the case before the appeals court on July 23, said the decision did not endorse cross-burning, but was a victory for the First Amendment.
"Cross-burning is not automatically a crime no matter much how much it offends people," he said. "It only becomes a crime when it is done with with the intent to intimidate to a specific victim within a protected class."
At a plea hearing, Enders, who admitted to participating in the cross-burning, said he didn't intend to intimidate anyone on the basis on race, ethnicity or sexual orientation. He said he understood how the action would be interpreted as threatening, court records show.
Manno said his client's participation amounted to failing to report the incident and failing to put out the blaze.
He said the three men had been drinking heavily and another defendent lit the cross.
"One of prices we pay for the freedom of speech is we have to put up with obnoxious speech."
Enders was sentenced to 180 days in jail and was placed on two years probation. Enders served about four months and is now out on probation, Manno said.
Contact Darran Simon at 856-779-3829 or at email@example.com or follow on Twitter @darransimon.