The 72 former prisoners released after being imprisoned for between one month and four years from 2003 to 2008, accuse L3 employees of beatings, torture, sexual aggression, the use of electric shock, mock executions and hangings from their feet.
'Profited from misery'
Plaintiff lawyer Susan Burke said that as a result of the ruling "these innocent men are a step closer to completing the true history of the infamous Abu Ghraib prison".
"These men were senselessly tortured by a company that profited from their misery," she added.
L3, which had argued the company was immune from litigation because it was acting under the aegis of the US government, may appeal the decision.
Up to now, the only cases that have concluded in the Abu Ghraib affair have been in military courts.
Eleven soldiers have been found guilty and sentenced to up to 10 years in prison in the case which was a huge setback for the United States' image when photos were released showing naked and hooded prisoners beaten bloody and being made to commit humiliating acts such as human pyramids or simulating homosexual sex.
Soldiers also posed with the prisoners in humiliating positions.