|The court found then-colonel Georg Klein had exhausted all reasonable means of seeking to verify that no civilians were present|
The Federal Court of Justice found against a father who was seeking 40,000 euros ($45,000) after the death of two of his children and a widowed mother-of-six claiming 50,000 euros.
In the September 2009 bombing, US planes hit two fuel tankers stolen by Taliban insurgents, killing about 100 people -- including many civilians -- near the northern city of Kunduz.
The commander, then-colonel Georg Klein, had called in the night-time strike after an informant had repeatedly claimed that no civilians were near the tankers.
Klein, who was later promoted to the rank of general, had feared that Taliban fighters could use the tankers as mobile bombs against a German military camp.
The court rejected the claim that Klein bore liability for a negligent act while on official duty. It found that he had exhausted all reasonable means of seeking to verify that no civilians were present.
After the tragedy, the German parliament described the strike as "one of the most serious incidents involving the German military since the Second World War".
The German government has argued the air strike came under NATO command and could not be blamed on Berlin alone.
It has already paid out $5,000 each to families affected by the raid, stressing that the money was not compensation but humanitarian aid.
Germany has been the third-largest contributor to NATO forces in Afghanistan behind the United States and Britain.