Nothing but Fear Itself: A Social-Psychological Model of Stigma Harm and Its Legal Implications

Would you buy property near a contaminated site? The phenomenon known as stigma occurs when potential purchasers devalue the cost of property associated with environmental contamination due to their fear of contamination. Even when a particular piece of property has not been, and could never be, adversely impacted by nearby contamination, its value frequently will decrease in the eyes of potential purchasers as a result of their fear. The following question of course arises: absent any potential for actual harm, should the polluter be responsible for the damage resulting from this fear? While the number of claims for such devaluation asserted by owners of stigmatized property is rising dramatically, the judicial answer to this question has been anything but clear. This Article identifies the source of the current inadequate judicial treatment of stigma. It argues that courts and practitioners misunderstand the process that causes stigma harm and, as a result, have fashioned a jurisprudence that is unresponsive to the problem. It then identifies a proper model of stigma harm and builds a new stigma jurisprudence based on this psycho-social model of the stigma phenomenon. The most fundamental problem underlying the inadequate judicial treatment of stigma claims is that courts and lawyers simply misunderstand the phenomenon that causes stigma. While courts and commentators treat stigma harm in terms of the potential for contamination to reoccur or the potential for residual contamination to impact health or property, this Article argues that stigma is the result of a cognitive "marking" process, completely independent of the potential for future actual harm. According to the cognitive model, the harm results from a mark that, when noticed, "changes in a negative and discrediting way the way the observer sees the victim, whose is to reputaidentity is now spoiled." In short, the harm from stigma tion and not to property. This redefinition of stigma also is supported by research on heuristics, or cognitive shortcuts, which explain the variations in perception that result in stigmas having different magnitude and duration depending on surrounding circumstances. The lack of understanding of the stigma phenomenon has led courts to fashion rules of liability and damages that advance few, if any, valid policy concerns. For example, to the extent a majority rule of stigma jurisprudence can be established, it would mirror other current theories of recovery for "subjective" damages, with claims allowed only if the diminution in property value accompanies some actual harm. This liability rule, however, runs contrary to the concept of the marking process as independent of the means by which contamination causes actual property damage. Simply put, this actual damage standard bears no relationship to whether a party has been harmed by stigma. Moreover, the reasons generally asserted by courts for requiring an actual damage standard are inapplicable to stigma harm. Generally, such liability standards are premised on the problems associated with proving "subjective" harm. Usually, the only way to present evidence on the subjective response to contamination would be to put the injured person on the witness stand and ask for a description of his feelings. Yet, stigma is the product of market forces. It can be proved through means other than the subjective feelings of the plaintiff and objectively verified through appraisal evidence. Stigma liability rules need not provide for the same high level of protection required in many "subjective" cases. At the same time, an analysis of heuristics suggests that many stigmas are not permanent, and thus judicial analysis of damages rules also must be reconsidered. In light of this new understanding of stigma, this Article concludes that the best approach to stigma damages would be to turn the current majority jurisprudence upside down-applying a stricter standard for proving damages than for liability. This Article is separated into three major parts. Part II sets forth the current state of stigma jurisprudence through an analysis of existing stigma case law. Part III then describes the cognitive model of stigma. It focuses on the marking process that causes stigma and uses heuristics to describe why certain stigmas are perceived as larger than others. Finally, Part IV considers the implications of this new understanding for current stigma jurisprudence, suggesting a proper legal basis for consideration of stigma claims.