The Collaborative International Dictionary of English v.0.48:

Amerce \A*merce"\ ([.a]*m[~e]rs"), v. t. [imp. & p. p. Amerced
   ([.a]*m[~e]rst"); p. pr. & vb. n. Amercing.] [OF. amercier,
   fr. a merci at the mercy of, liable to a punishment. See
   Mercy.]
   1. To punish by a pecuniary penalty, the amount of which is
      not fixed by law, but left to the discretion of the court;
      as, the court amerced the criminal in the sum of one
      hundred dollars.
      [1913 Webster]

   Note: The penalty or fine may be expressed without a
         preposition, or it may be introduced by in, with, or
         of.
         [1913 Webster]

   2. To punish, in general; to mulct.
      [1913 Webster]

            Millions of spirits for his fault amerced
            Of Heaven.                            --Milton.
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            Shall by him be amerced with penance due. --Spenser.
      [1913 Webster]

WordNet (r) 3.0 (2006):

amerce
    v 1: punish with an arbitrary penalty
    2: punish by a fine imposed arbitrarily by the discretion of the
       court