In an order issued late last week, US District Judge Timothy Kelly said he adopted a special expert's recommendation that Robert Levinson's family be awarded $107m in compensatory damages. The judge awarded punitive damages of $1.3bn.
The court cited the case of Otto Warmbier, an American college student who died in 2017 shortly after being freed from captivity in North Korea, in deciding to award the significant amount of punitive damages to Levinson's family.
"Iran's conduct here is also unique, given that – astonishingly – it plucked a former FBI and DEA special agent from the face of the earth without warning, tortured him, held him captive for as long as 13 years, and to this day refuses to admit its responsibility," Kelly said.
"His wife and children, and their spouses and children – while keeping Levinson's memory alive – have had to proceed with their lives without knowing his exact fate."
In a statement, Levinson's family welcomed the ruling.
"This judgement is the first step in the pursuit of justice for Robert Levinson, an American patriot who was kidnapped and subjected to unimaginable suffering for more than 13 years," Levinson's family said.
"Until now, Iran has faced no consequences for its actions. Judge Kelly's decision won't bring Bob home, but we hope that it will serve as a warning against further hostage-taking by Iran."
A spokesman for Iran's mission to the United Nations did not immediately respond to a request for comment.
Tensions remain high between the US and Iran amid President Donald Trump's maximalist pressure campaign over Tehran's nuclear programme.
Though the US and Iran have not had diplomatic relations since the aftermath of the 1979 US embassy hostage crisis in Tehran, the US stills holds billions of dollars in frozen Iranian assets that could be used to pay Levinson's family.
Earlier this year, Levinson's family said they believed he died in Iranian custody, based on information from US officials.
Iran denied that and said the former FBI agent had left the country "years ago".
Levinson disappeared after flying from Dubai to Iran-controlled Kish Island in the Gulf in March 2007.
Months after he disappeared, US government sources acknowledged that before his trip, Levinson had maintained an unorthodox contractual relationship with the analytical branch of the Central Intelligence Agency.
A handful of CIA officials were forced out of the agency and several more were disciplined after an internal investigation.