Hoyt said he agreed with the jury in Galveston that had found London-based BP responsible for the leak. But he said BP did not intend to cause harm to the workers and that plaintiffs failed to prove gross negligence.
Without "clear and convincing" evidence of gross negligence, Hoyt wrote in his ruling, the $100 million in punitive damages "must be set aside."
The jury also had awarded actual damages ranging from about $6,000 to more than $244,000 per worker.
"We agree with the court's decision to set aside the punitive damage award," said BP spokesman Scott Dean. "Having said that, we continue to believe that the evidence in the case did not warrant a finding against the company in any amount and that we have solid legal grounds for an appeal."
Plaintiffs' attorney Tony Buzbee said the judge's ruling sets an impossibly high bar for proving gross negligence and gives refiners a "free pass" to continue exposing workers to serious injury.
Buzbee says he plans to ask the judge to reconsider the decision before a formal appeal is filed.
The 2007 leak happened at the same refinery where a March 2005 explosion killed 15 people and injured 170.