In James S. Joseph v. Apartment Management Association, LLC, the tenant sued in small claims court for property damage (not for a rent ababtement). The case proceeded to trial and a civil court judge awarded the tenant over $3000 in damages.
The decision was appealed by the managing agent. The Appellate Term, in a decision issued on January 19, reversed the lower court's decision and dissmissed the case.
The Appellate Court agreed with the managing agent and ruled that there was insufficient proof to establish that the agent had failed to act with reasonable diligence upon being advised by the tenant of the bedbug infestation in his apartment. As a result, the Court ruled that the owner could not be held liable for any damage to the tenant's property resulting from the bedbug condition.
To read the case, see: http://law.justia.com/cases/new-york/appellate-term-second-department/2011/2011-50303.html