A Georgia judge reduced legal damages against Fiat Chrysler Automobiles NV stemming from a jury verdict in a trial over a fatal Jeep fire, providing some financial relief around the same time regulators hit the auto maker with a record fine for recall lapses.

Judge J. Kevin Chason on Friday reduced to $40 million from $150 million the damages a jury awarded in April to the parents of a 4-year-old boy who died in a fiery rear-end Jeep crash in Bainbridge, Ga. The judge also denied Fiat Chrysler's request for a new trial.

The family's lawyers on Monday agreed to the reduction, leading to damages of $30 million for Remington Walden's wrongful death and $10 million for his pain and suffering.

In rejecting Fiat Chrysler's new-trial request, the judge batted down the company's arguments that jurors acted "from passion and prejudice" largely because of plaintiff's lawyers tactics.

The Italian-U. S. auto maker suggested it could keep fighting the case. "The reduction in the damage awards does not cure the many errors that tainted this verdict and denied [Fiat Chrysler] a fair trial," a spokesman said in a statement. "We are considering our legal options."

The judge's order in the case came on the same day Fiat Chrysler signed a consent order agreeing to a record $105 million penalty from regulators for lapses spanning nearly two dozen recalls affecting more than 11 million vehicles, including older Jeeps with rear gas tanks linked to dozens of fatal fires.

The 1999 Jeep Grand Cherokee in the Georgia case is among more than a million vehicles with rear fuel tanks subject to a "customer satisfaction campaign" in lieu of a recall. More than 1.5 million Jeep Grand Cherokee and Liberty sport-utility vehicles with model years ranging from 1993 to 2007 are being recalled.

Fiat Chrysler is offering cash to owners of recalled Jeeps to encourage them to get repairs or money on top of the value of their vehicle if they decide to trade it in as part of its sweeping settlement with auto-safety regulators. The company also is offering cash to owners of 1999-2004 Grand Cherokees as part of the deal.

The Georgia case arose from a fiery rear-end Jeep Crash in March 2012. Jurors interviewed by The Wall Street Journal said they were persuaded by a medical examiner's testimony that the Walden boy survived the Jeep being rear-ended by a pickup truck and later died from a fire linked to the vehicle's leaking gas tank.

Fiat Chrysler faulted plaintiffs' lawyers for discussing at trial Chief Executive Sergio Marchionne's income and for suggesting the company should have been imprisoned instead of the pickup truck driver who rear-ended the Jeep in the crash that killed the Walden boy.

The company had called the size of the original damage award grossly excessive and improperly punitive, seeking to reduce it to a total of $5 million.

Fiat Chrysler also expressed disappointment that state law prevented jurors from reviewing data showing other vehicles, many with similar fuel-tank designs, were more often involved in fatal fiery crashes.

Judge Chason in his order called the evidence against Fiat Chrysler "overwhelming" and said jurors were respectful, on time and attentive.

The judge "saw nothing to indicate, nor has it been presented with persuasive evidence or argument to suggest, that the jurors were 'inflamed' or 'irrational,' " he wrote. The judge also rejected Fiat Chrysler's criticisms of the family's lawyers.

He also rejected suggestions from Fiat Chrysler that he improperly instructed jurors before their deliberations.

Write to Mike Spector at mike.spector@wsj.com

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