LaBrada was arrested two days after 28-year-old Eduardo Campos of Newark was shot nine times outside the XL Lounge in Newark's Ironbound section.
Witnesses said the gunman fled in a silver Mercedes similar to one LaBrada drove. But police didn't know that LaBrada had wrecked his car in a drunken driving crash a month before.
LaBrada and his family have filed suit, charging wrongful prosecution and violation of civil rights.
LaBrada didn't attend Wednesday's hearing because he is serving a three-year prison term on charges stemming from the drunken driving accident.