The Stigma Enigma:
Damages Based on Public Perception of Taint

Diminished value caused by a negative perception of a site calls for compensation for the stigma to satisfy the fundamental concept that an injured party must be made whole. A perception of harm may be all that is needed to support an award of stigma damages. But problems arise because the public perception underlying the stigma may be unsubstantiated, unreasonable, and formed in reaction to publicity. Read how courts in Wisconsin and other jurisdictions are handling this "stigma enigma."

by Jason T. Studinski

Consider these scenarios:

Scenario 1. You represent a group of homeowners from a new subdivision. All complain that their houses are plagued with cracks in the walls, damage to foundations, and water seepage into basements. You learn that the subdivision was built on unsuitable soil. News about the suit you file against the developer and builder for property damage makes its way into the local paper. Your clients worry that even if they prevail and their homes are repaired, public awareness of the problem has irreparably devalued their homes. Can your clients expect to recover for this "stigma"?

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