Business & Tech

Cancer scientist who sued Steward Health over lost lab wins in court

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A cancer scientist has spent much of the past three years in court arguing to preserve research she oversaw at St. Elizabeth’s Medical Center in Brighton, and blaming Steward Health Care System for triggering a series of events that led to the destruction of her laboratory.

On Tuesday, the scientist, Lynn Hlatky, won a preliminary victory over Steward in Suffolk Superior Court. After several days of testimony, a jury ruled that Steward breached its contract with Hlatky when it spun off her lab and stopped funding her research.

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The case will continue so Hlatky can argue for damages. She is seeking some $35 million, money that she said she plans to use to restart her lab.

“I’m very pleased with the decision,” Hlatky said in an interview after jurors announced their verdict.

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Steward and its lawyers did not comment on the verdict.

Hlatky, a researcher for nearly three decades, ran the lab at St. Elizabeth’s when it was part of the Caritas Christi system. That system was acquired in 2010 by Steward, a private company with backing from a New York private equity fund. Steward spun off Hlatky’s lab in 2013 to a nonprofit called Genesys Research Institute Inc.

Genesys, amid serious financial problems, closed the lab in September 2014 and later filed for Chapter 11 bankruptcy protection. The lab had received millions of dollars in federal government funding.

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In US Bankruptcy Court, Hlatky tried to preserve her research. But her lab eventually was liquidated: The equipment was sold at auction, and thousands of little containers filled with cells, proteins, and other biological research materials were incinerated.

Hlatky sued both Genesys and Steward. She alleged that Steward violated its employment contract with her because it stopped providing “sufficient support” for her research.

Steward, the state’s largest for-profit hospital company, denied wrongdoing and disputed Hlatky’s claims.

“Dr. Hlatky may be a brilliant scientist, but her version of the events just isn’t grounded in reality,” Allison O’Neil, a lawyer at Locke Lord LLP who represents Steward, said in court Tuesday, according to a transcript.

Hlatky’s 2012 employment contract states she was employed as director of a lab called the Center of Cancer Systems Biology, reporting to Dr. Peter J. Catalano, who was medical director of research at Steward. Hlatky was to receive a base salary of $425,000 annually, about half of it coming from Steward and half from research grants.

The contract also promised $323,000 a year for three years for Hlatky to recruit staff, buy supplies, and make other research-related expenses. But a year into the contract, Steward spun off the lab.

Hlatky filed suit against Steward in 2014. A jury trial began last week.

Officials of Steward, including its chief executive, Dr. Ralph de la Torre, were called to testify at the trial. De la Torre told the court Monday that he was not familiar with Hlatky or her specific research.

The jury deliberated for just a few minutes Tuesday before ruling in Hlatky’s favor, according to her lawyer, Kevin T. Peters of the firm Gesmer Updegrove LLP.

“They’ve ruled that Steward breached the contract and that Steward breached the obligation to act in good faith,” Peters said. “Now I have to prove damages.”

In a statement, Steward spokesman Jeff Hall said, “This particular instance of civil litigation is pending and Steward will not comment until the suit is resolved.”

Hlatky had been studying how cells become cancerous. She said she’s eager to gather some of her colleagues and get back to work — but first she must win the rest of her case so she has the money to do so.

“We’re looking for enough to get us back and functional,” she said. “We have nothing. We don’t have a microscope. We don’t have a test tube.”

Priyanka Dayal McCluskey can be reached at priyanka.mccluskey@globe.com. Follow her on Twitter @priyanka_dayal.
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