Searching over 5,500,000 cases.


searching
Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

Stega v. New York Downtown Hospital

New York Court of Appeals

June 27, 2018

Jeanetta Stega, & c., Appellant, et al., Plaintiff,
v.
New York Downtown Hospital, et al., Respondents, et al., Defendants.

          Christopher J. Porzio, for respondents.

          John A. Beranbaum, for appellant.

          OPINION

          FAHEY, J.

         This Court's decision in Rosenberg v Metlife, Inc. (8 N.Y.3d 359 [2007]) does not shield statements, made in an administrative proceeding, that defame a person who has no recourse to challenge the accusations. The absolute privilege against defamation applied to communications in certain administrative proceedings is not a license to destroy a person's character by means of false, defamatory statements.

         Our summary of the facts is drawn from plaintiff's complaint, the allegations of which we must accept as true at this stage of the litigation on a motion to dismiss. Plaintiff, Dr. Jeanetta Stega, is a medical scientist who has specialized in gynecological and oncological research. An employee of defendant New York Downtown Hospital, plaintiff became Vice President of Research and Chairperson of the hospital's Institutional Review Board (IRB) in 2009. The IRB oversaw clinical trials, involving human subjects, of products regulated by the Food and Drug Administration (FDA). [1]

         In 2011, defendant Dr. Leonard A. Farber, an oncologist in private practice who had medical staff privileges at Downtown Hospital, entered into an agreement with Luminant Bio-Sciences, LLC to conduct a clinical trial of a compound that Luminant had developed to treat patients with metastatic cancer. Farber asked plaintiff to assist him in developing preparatory materials for the study, including a protocol and a patent application. Plaintiff advised defendant Jeffrey Menkes, Downtown Hospital's President and Chief Executive Officer, and other hospital officials about the Luminant project, and that the first phase of the study was to be at Farber's office, followed by a larger clinical trial at Downtown Hospital. Plaintiff also told the officials that she would write the protocol and patent application for the study. Downtown Hospital raised no objections.

         Working after-hours, plaintiff drafted the preliminary documents for the Luminant study, for which Luminant paid her $50, 000. Plaintiff opened a bank account in the name "Stega Research Group" and, as she phrases it in her complaint, she "deposited the $50, 000... in the Stega Research Group... account."

         When Farber applied to Downtown Hospital's IRB for approval of the Luminant study, plaintiff recused herself from the board's deliberations and voting, but she answered other IRB members' questions about the study. The IRB approved the trial.

         Conflicts arose between Farber and Luminant, and the clinical study soon went awry. In a telephone conversation with plaintiff, Farber allegedly threatened to destroy the trial and punish Luminant. Tensions between Farber and plaintiff intensified, and Farber threatened plaintiff with retribution too. It was at this point, according to plaintiff, that Farber told Menkes that plaintiff had stolen the Luminant study from him, that she had taken funds that did not belong to her, and that the drug compound was toxic and unsafe for patients.

         Menkes and defendant Dr. Stephen G. Friedman, Downtown Hospital's Acting Chief Medical Officer, met with plaintiff and accused her of taking funds that belonged to the hospital. They also charged her with engaging in a conflict of interest by seeking approval from the IRB for the Luminant study despite being a member of that board. Plaintiff was placed on administrative leave. Following an investigation, Downtown Hospital officials concluded that plaintiff had violated the hospital's conflict of interest policy and had improperly taken money from Luminant "on the side." In February 2012, plaintiff's employment was terminated. Plaintiff and the IRB's Vice Chairperson were both removed from the board, which Downtown Hospital sought to disband.

         In March 2012, plaintiff and the IRB's Vice Chairperson submitted a complaint to the FDA, which monitors the compliance of IRBs with its regulations. They expressed concerns regarding their ouster and about whether the patients in research trials overseen by Downtown Hospital's IRB would be properly supervised. FDA investigators promptly interviewed plaintiff and the Vice Chair. In May, following appropriate notice, the agency conducted an on-site inspection of the IRB. An FDA inspector spoke with Friedman and other hospital administrators and reviewed the IRB's membership, policies, and procedures, as well as trial participants' informed consents and selected studies overseen by the IRB.

         It was in this context that Friedman, during a May 22, 2012 meeting with an FDA inspector, stated that plaintiff had "channeled" Luminant's funds to a "Stega Research Group" at her home address. Friedman also told the inspector that plaintiff had requested that Farber add a patient with prostate cancer to the study, which otherwise had only lung cancer patients as subjects, and, when Farber refused, plaintiff had replied, "I am the IRB and I want the patient entered." Friedman informed the inspector that, in addition to terminating plaintiff, he had removed plaintiff and the Vice Chairperson from the IRB, and wished to disband the board, in part because it was "tainted" as a result of plaintiff's involvement.

         The FDA subsequently released an Establishment Inspection Report (EIR) to Downtown Hospital, outlining instances, unrelated to plaintiff's conduct, of procedural noncompliance by the IRB with FDA regulations. The EIR did not expressly discuss whether Downtown Hospital had properly terminated plaintiff's employment and removed her as IRB Chairperson, but noted that the "[i]nspection found certain improprieties documented by the hospital's management resulting in the removal of Dr. Stega."

         Friedman's statements about plaintiff were published in the EIR, as follows:

"On May 22, 2012 a discussion with Dr. Steven Friedman was held at which time he discussed the reasons for the removal of Dr. Jeanetta Stega from her positions at New York Downtown Hospital and the IRB. According to Dr. Friedman, Dr. Stega created the Stega Research Group using her home address. Funds for study LF 11-11 (Dr. Leonard Farber, [Principal Investigator]) from the sponsor [were] channeled to this group. Further Dr. Farber did not want to enter a prostate cancer patient onto this lung cancer protocol when Dr. Stega requested him to do so. Dr. Farber reportedly stated that the IRB would not approve this patient and Dr. Stega reportedly stated that she is the IRB and wanted the patient entered....
"Dr. Stega was subsequently fired. Dr. Friedman felt that the IRB and their approvals were tainted and therefore the hospital removed Dr. Stega and... any members that had direct contact with Dr. Stega. This is one of the reasons Dr. Friedman wants to disband the IRB."

         After the EIR came to her attention, plaintiff commenced this defamation action against Downtown Hospital, Friedman, Menkes, Farber, and others. Plaintiff asserts that her professional reputation has been significantly damaged by the publication of false, defamatory statements about her made by Friedman to the FDA inspectors, insofar as they undermine her standing with the FDA and her livelihood as a research scientist.

         In lieu of an answer, the defendants moved to dismiss the complaint under CPLR 3211 (a) (7). As relevant here, defendants Downtown Hospital and Friedman contended that Friedman's statements are protected by an absolute privilege, and, in the alternative, that the complaint should be dismissed because the statements are either true on the face of the complaint or, in the instance of the remark that the IRB was "tainted," an expression of pure opinion.

         Although Supreme Court granted the defendants' motion to dismiss in other respects, the court allowed plaintiff's defamation claim against Downtown Hospital and Friedman to survive, and severed the defamation claim against those defendants. Supreme Court reasoned that the statements at issue were not shielded by an absolute privilege, because the FDA's investigation had none of the indicia of a quasi-judicial proceeding, and in particular lacked safeguards such as an adversarial procedure or a determination subject to review. Plaintiff was not a "participant[] in the investigation, which was not an adversarial process; nor could [she] challenge the statements made about [her]. That it was an official governmental investigation conducted by a regulatory agency does not by itself make it a quasi-judicial function" (2014 NY Slip Op ...


Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.