The ruling means that no person or company will be held criminally responsible for the "Black Sunday" blaze that caused the deaths of Lt. Curtis Meyran and firefighter John Bellew. A separate jury acquitted two tenants of similar charges last year, saying the blame was on the management.
Six firefighters were trapped in the building on Jan. 23, 2005.
Meyran, 46, and Bellew, 37, died after jumping from a fourth-floor window. Two others who jumped survived, and the other two also escaped.
The case highlighted the persistent fire hazard of using temporary walls for illegal apartment conversions - a common problem in a city where rents are high and space always in demand.
The apartments rented by the two tenants charged in the case were turned into a deadly maze so they could make extra cash renting rooms, prosecutors charged.
The firefighters were trapped in the building as black smoke made it nearly impossible to see. As flames licked as their bodies and a wall of fire came toward them, the four firefighters jumped.
Steve Cassidy, president of the Uniformed Firefighters Association of New York, called the ruling unfortunate.
"There are thousands of illegally subdivided occupancies throughout the five boroughs," he said. "The justice system must find a way to enforce building laws that protect firefighters and hold those accountable who violate these laws."
Last month, a fire killed five people in a Brooklyn apartment house that authorities said had been chopped up into more units than allowed by law, eliminating access to a fire escape for some tenants. The owner received three civil citations, but has not been criminally charged.
FDNY Commissioner Salvatore Cassano said he hoped Tuesday's decision would not send the wrong message to those looking to profit on illegal occupancies.
"The fact is, people continue to die in fires because of illegally constructed partitions," he said.
Rios' attorney, David J. Goldstein, praised Clancy's ruling.
"I think it was the only decision she could've legally made," he said. "It think it took a lot of courage. There was absolutely no evidence, none, whatsoever that either of these defendants knew what was going on inside these apartments."
Clancy presided over the trial last year. The defense asked for the case to be dismissed before the jury deliberated, and Clancy reserved the right to decide later, which she did Tuesday.
Rios, who formerly owned the Bronx building, had faced up to four years in prison. The limited liability company could have been fined up to $15,000.
