The US supreme court has overturned a lower court's ruling that ordered ExxonMobil, the oil giant, to pay $2.5 billion in compensation for the 1989 Exxon Valdez oil tanker spill in Alaska.
The court ruled that the punitive damages should be limited to equal the compensatory damages of $507.5 million.
Justice David Souter said the court concluded that the $2.5 billion in punitive damages was excessive under federal maritime law, and should be cut to the amount of actual harm.
The case involved about 32,000 commercial fishermen, indiegenous Alaskans, property owners and others harmed by the US's worst tanker spill.
Exxon Mobil has posted huge profits in recent years due to high oil prices, reporting earnings of $40.6 billion in 2007.
Exxon Valdez ran aground in Alaska's Prince William Sound in March 1989, spilling about 11 million gallons of crude oil.
ExxonMobil afterwards spent about $2.1 billion cleaning up the polluted coastline and more than $300 million in compensation for fishermen and locals affected by the catastrophe.
The company also paid out more than $900 million in fines in a bid to halt criminal proceedings begun against it by the US government and the state of Alaska.
However, in 1994, a jury in a civil Alaskan lawsuit ordered the firm to pay $5 billion in damages to fisherman and locals whose livelihoods were destroyed.
The oil giant has fought that verdict ever since and in 2006 won a victory from a US federal court which cut the punitive damages to $2.5 billion.
John Passacantando, executive director of Greenpeace USA, told Al Jazeera that Exxon has been rewarded for stalling on the case.
"The US public should know our companies are not being held to account and that the Supreme Court will defend these corporations and their bad actions and not the citizens of the US," he said.