The US Supreme Court has today cut the $US2.5 ($NZ3.34) billion punitive damages award in the 1989 Exxon Valdez disaster to $US500 million.
The court ruled that victims of the worst oil spill in US history may collect punitive damages from Exxon Mobil, but not as much as a federal appeals court determined.
Justice David Souter wrote for the court that punitive damages may not exceed what the company already paid to compensate victims for economic losses, about $US500 million compensation.
Exxon asked the high court to reject the punitive damages judgment, saying it already has spent $US3.4 billion in response to the accident that fouled 1930km of Alaska coastline.
A jury decided Exxon should pay $US5 billion in punitive damages. A federal appeals court cut that verdict in half.
The court divided 5-3, with Justice Samuel Alito taking no part in the case because he owns Exxon stock.
Exxon has fought vigorously to reduce or erase the punitive damages verdict by a jury in Alaska in 1994 for the accident that dumped 41.6 million litres of oil into Prince William Sound. The environmental disaster led to the deaths of hundreds of thousands of seabirds and marine animals.
Nearly 33,000 Alaskans are in line to share in the award, about $US15,000 a person. They would have collected $US75,000 each under the $2.5 billion judgment.
