The court voted 6-3 in favour of Texas-based Southern Union Co. in an appeal of a penalty imposed for its improper storage of mercury in a building in Pawtucket, R.I.
The case turned on whether a series of cases limiting judges' discretion in increasing prison sentences also applies to criminal fines. Justice Sonia Sotomayor said in her opinion for the court that the same limits apply.
"While the punishments at stake in those cases were imprisonment or a death sentence, we see no principled basis ... for treating criminal fines differently," Sotomayor said.
Justices Samuel Alito, Stephen Breyer and Anthony Kennedy dissented.
Southern Union had used the building to store outdated mercury-sealed gas regulators that it removed from customers' homes. Although the mercury was initially removed and shipped to a recycling centre, that work stopped, and the regulators, along with loose mercury, were left to accumulate in bags, containers and jugs inside the building.
A judge decided that the company should pay a $6 million fine and $12 million in charitable contributions. He arrived at those numbers after taking the maximum fine of $50,000 a day and multiplying it by 762 days, as specified in the indictment. The judge said he could have imposed a fine of more than $38 million.
But Southern Union said the jury did not specifically determine how long the mercury was stored improperly and that the judge should have capped the fine at $50,000, the one-day maximum.
The 1st U.S. Circuit Court of Appeals in Boston said the penalty was reasonable and rejected Southern Union's arguments.
The high court, however, said the appellate judges were wrong.
The case is Southern Union Co. v. U.S., 11-94.