The Supreme Court Wednesday overturned the record $2.5 billion in punitive damages that Exxon Mobil Corp had been ordered to pay for the 1989 Exxon Valdez oil spill off Alaska.

The nation's highest court ruled that the punitive damages should be limited to an amount equal to the total relevant compensatory damages of $507.5 million.

In the court's opinion, Justice David Souter 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.

By a 5-3 vote, the justices overturned a ruling by a U.S. Court of Appeals that had awarded the record punitive damages to about 32,000 commercial fishermen, Alaska natives, property owners and others harmed by the nation's worst tanker spill.

Read the full article here on the Insurance Journal website.