SJC rules Steward Health Care must pay $10.2m to scientist whose lab was destroyed

Lynn Hlatky’s equipment at St. Elizabeth’s hospital was sold at auction, and her research materials were incinerated.

The Massachusetts Supreme Judicial Court on Tuesday ruled that Steward Health Care owes $10.2 million to a scientist who sued the company for actions that led to the destruction of her research lab.

The ruling caps a long and complicated legal dispute between the scientist, Lynn Hlatky, and Steward, a for-profit company that operates dozens of hospitals nationwide.

Hlatky sued Steward for breaching her employment contract and causing an unusual chain of events that led to the liquidation of her lab on the campus of St. Elizabeth's Medical Center, a Steward hospital.

A Suffolk Superior Court jury awarded her $22 million in a trial in 2017; a judge later reduced that amount to $10.2 million. Steward appealed the case to the SJC, which on Tuesday sided with the lower court ruling.

Justices unanimously agreed that Steward was liable for breach of contract and that Hlatky should receive $10.2 million in damages. Hlatky’s attorney, Joseph L. Bierwirth, said the damages will be about $19 million with interest.

Hlatky was pleased with the outcome, according to her lawyer. “She’s very much looking forward to getting back to her life’s work and continuing cancer research,” Bierwirth said.

Steward declined to comment on the decision.

Hlatky’s dispute with Steward has a long history.

In 2012, Hlatky signed an employment contract with Steward “believing that it would assure her a degree of security and stability for her research samples, team, and funding,” the SJC ruling states. But instead, Steward decided to transition from the type of lab research that Hlatky and her colleagues were conducting, and transferred the operations of Hlatky’s lab to a nonprofit called Genesys Research Institute.

Genesys had severe financial problems, closed Hlatky’s lab in 2014, and filed for bankruptcy. In the bankruptcy process, Hlatky’s lab was liquidated. The equipment was sold at auction and thousands of containers of biologic research materials were incinerated.

“The transition to Genesys proved disastrous for Hlatky’s laboratory,” justices said in their ruling.

Hlatky previously told the Globe she was “heartbroken” by the loss of her lab and that her primary goal has been to return to her work studying cancer cells.

Her lab previously employed about 30 people and received millions of dollars in federal research funding.

Since the dispute with Hlatky began, Steward has grown from a Massachusetts company to a national hospital operator based in Dallas.