The denial, which came without explanation, effectively brings the $100-million wrongful death claim to an end.
Raheel Siddiqui died at Marine Corps Recruit Depot Parris Island after falling nearly 40 feet in a barracks stairwell.
It was the first hazing case involving criminal charges in school history.
One recruit was called a terrorist. Another had his vest stapled to his skin.
Sgt. Francis Frazier was cleared of hazing allegations but got a non-punitive letter of caution for poor leadership.
Raheel Siddiqui's family sued after investigators found evidence of hazing by his drill instructor prior to his death.
The prosecutors announced the allegation during a hearing for SEAL Tony DeDolph and Marine Mario Madera-Rodriguez.
Members of the Silent Drill Platoon were punished after someone said they saw them use a training rifle to strike someone.
The tradition of "rolling-up," or "roll-ups," is a practice that is often viewed as a game or initiation ritual.
One of the most high-profile platoons in the Marine Corps is under investigation for allegations of hazing.