In the process, the justices in a 5-4 decision threw out an almost $3.4 million judgment in favor of a woman whose childhood rape has been widely seen on the Internet.
Lawyers for the woman, known in court papers by the pseudonym "Amy," argued that everyone who has downloaded Images of her should be made liable for all of her losses. They say the trauma of the experience has caused her to have trouble keeping a job and she requires extensive psychotherapy.
Those losses — based on the ongoing Internet trade and the viewing of Images of her being raped by her uncle when she was 8 and 9 years old — have been pegged at almost $3 million in lost income and about $500,000 in future treatment and counseling costs.
Justice Anthony Kennedy's majority opinion said that while the courts can order people convicted of child pornography to pay restitution to their victims, the award should be relative to victims' losses and the convicts' actions.
"Restitution is proper [under federal law] only to the extent the defendant’s offense proximately caused a victim’s losses," Kennedy said.
Federal law says victims of child pornography are eligible for restitution, though it doesn't specify who should pay and how much they should pay.
The victim has obtained restitution awards from 182 people who have downloaded her Images — 161 of whom were ordered to pay between $1,000 and $530,000.
But a lower court held that Doyle Randall Paroline was held liable for the entire amount of the woman's losses, even though his computer contained just two Images of her.
Kennedy said courts should exercise "common sense" discretion in awarding restitution and that a lower court went too far when it said Paroline was responsible for all of the woman's losses.
Justices Samuel Alito, Stephen Breyer, Ruth Bader Ginsburg and Elena Kagan joined Kennedy's opinion.
Chief Justice John Roberts and Justices Antonin Scalia and Clarence Thomas said the restitution law as written should mean Amy is awarded nothing from Paroline.
In a separate dissent, Justice Sonia Sotomayor said she would have upheld the full award.
• Associated Press reports contributed to this article.