Cancer researcher awarded $22m in suit against Steward Health Care

A Suffolk Superior Court jury on Thursday awarded more than $22 million to a cancer scientist who sued Steward Health Care System for breaching her contract and causing an unusual series of events that led to the destruction of her laboratory.

The jury sided with the scientist, Lynn Hlatky, who argued that Steward broke its agreement when it spun off her research lab at St. Elizabeth’s Medical Center in 2013 and stopped supporting her work. Hlatky’s lawyers estimated that with interest, she will win $34 million in payments from Steward.

Hlatky, a longtime cancer researcher, called the verdict a huge victory. “We feel vindicated,” she said, vowing to use the money to restart her cancer lab.

But Steward, the state’s largest for-profit hospital company, said the verdict was “outrageous and unwarranted.” Steward called into question Hlatky’s work — calling it a “speculative research project that failed to produce any usable treatments for cancer patients” — and vowed to appeal.

Steward operates nine Massachusetts hospitals and has been moving aggressively to grow nationwide.

The company and the scientists already have spent three years battling in court. If Steward appeals, the case could drag on for months or years more.

The dispute stems from a lab that Hlatky ran on the campus of St. Elizabeth’s in Brighton, where she conducted experiments with cancer cells. After Steward acquired the hospital in 2010, the company decided to stop conducting basic research and transferred the operations of Hlatky’s lab to a nonprofit called Genesys Research Institute.

But Genesys encountered severe financial problems. It closed Hlatky’s lab in September 2014 and ultimately filed for bankruptcy. At one time, the lab had about 30 employees.

In the bankruptcy process, Hlatky’s lab was liquidated. The equipment was sold at auction, while thousands of little containers filled with cells and other biological research materials were incinerated.

Hlatky blamed Steward for causing that unfortunate chain of events. She sued the company, fighting in court for millions of dollars in damages. She said she needed the money in order to hire former colleagues and re-open her lab, known as the Center of Cancer Systems Biology.

Hlatky’s case against Steward was based on a 2012 employment contract in which the company promised to pay about half of her base salary of $425,000 a year. The other half was to come from research grants.

Steward also promised $323,000 a year for three years for Hlatky to recruit staff and make research-related expenses.

Last week, a jury ruled that Steward breached that contract. On Thursday, jurors decided that the company also owed Hlatky damages.

Hlatky, who said she received her PhD in biophysics from the University of California Berkeley in 1985, has spent her career in cancer research. Since her lab at St. Elizabeth’s was shuttered, she has been filling her time by editing and reviewing scientific papers and grants.

“We feel fabulous, and we’re anxious to get back to work,” Hlatky said in an interview after the verdict was announced. “This is not just me. This is a team, a big team that worked very, very hard on that science.”

Jeffrey N. Catalano, a trial lawyer who serves as president of the Massachusetts Bar Association, said juries tend to hold employment contracts sacred.

“If they feel an employee has been unfairly treated in an employment context, we’ve seen they can render substantial verdicts,” said Catalano, who was not involved in the case.

“You’re talking about a medical researcher and a brilliant scientist,” he added. “People in Massachusetts have deep respect for people who are committing themselves to scientific research, bettering humanity in a way. I think that was probably a compelling force in the jury’s decision to render such a substantial reward.”

Hlatky’s lab, which won millions in federal research grants, had been studying the process by which normal cells become cancer cells.

Steward took aim Thursday at Hlatky and the “runaway” jury that sided with her. The company cast Hlatky’s work as inconsequential and said the money spent on her research could have been put to better use.

“As a physician, I feel the funds in question would be much better spent providing treatment to low-income cancer patients and other patients with chronic diseases in underserved communities – rather than enriching one disgruntled litigant,” Dr. Michael Callum, Steward’s executive vice president, said in a statement.

He said Steward spent millions to support Hlatky’s lab and tried to help move the lab to a new setting, but he said that no other institution in town was interested.

Hlakty said that was Steward’s fault: “The reason we couldn’t move is because Steward was holding our equipment, it was holding our samples, and our grants were tied up.”

The scientist, who has spent much of the past several years in courtrooms, promised to continue fighting in court as long as necessary.

Steward, backed by the New York private equity firm Cerberus Capital Management, entered Massachusetts about seven years ago when it acquired the struggling Caritas Christi hospitals. The company has grown, but it also shuttered the troubled Quincy Medical Center in 2014.

After selling some of its hospital properties for an infusion of funding, Steward has been expanding nationally — something its chief executive, Dr. Ralph de la Torre, has long wanted to do.

Last month, Steward announced a nearly $2 billion deal with IASIS Healthcare of Franklin, Tenn., which would make it the largest private for-profit hospital operator in the country. That followed the company’s acquisition of eight hospitals in Ohio, Pennsylvania, and Florida for $304 million.