The jury's foreman told Superior court Judge Bob S. Bowers that the panel was deadlocked 9-3, with the majority in favor of guilt.
"We didn't see any way that the jury would come with the outcome that they did, so that was a surprise," said William Shannon, grandfather of the victim.
Leonard Hall Jr. was facing one count of murder and two counts of attempted murder.
The boy, Aaron Shannon Jr., had run to the backyard to show his grandfather and uncle his Halloween costume when gang members opened fire on each other in the alley. The boy died from a single gunshot wound to the head on Oct. 31, 2010. The grandfather and uncle were injured during the shooting.
The neighborhood where the boy lived is an active gang area, but his family had no gang ties, police said shortly after the shooting.
After the deadlock, Bowers denied defense attorney Carol Ojo's request to reduce Hall's $4 million bail.
"Our intent is to retry the case," D.A. spokeswoman Jane Robison said in a statement.
The case is due back in court on May 9. William Shannon says the family remains optimistic that justice will come.
"Perhaps some individuals didn't understand the evidence," he said.
During closing arguments, Deputy District Attorney David Barkhurst told jurors during that Hall went into rival gang territory and began shooting. He said witnesses linked Hall to the killing.
But the defense questioned the perception of the witnesses, telling jurors that "there is absolutely zero physical or forensic evidence" to show that Hall was in the alley that day.
Marcus Denson, who was charged along with Hall, pleaded guilty earlier to one count of voluntary manslaughter and two counts of attempted murder, according to Jane Robison of the District Attorney's Office. Denson, 21, is awaiting sentencing in May.
City News Service contributed to this report.