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Trustees of the University of Pennsylvania breached an employment contract with a professor when a dean imposed severe sanctions on him for misconduct in research even after an investigative committee found him not guilty, a majority of the state’s high court has ruled. However, the majority reduced the professor’s jury verdict for damages from $5 million to $2.9. million, agreeing with the defendants that the award should be limited to the “outside boundary” of the amount of damages testified to by the professor’s expert witness. Former Pennsylvania Supreme Court Chief Justice Stephen A. Zappala authored the 36-page opinion in Ferrer v. Trustees of the University of Pennsylvania. Justices Ralph Cappy and Sandra Schultz Newman dissented, but their written opinions were “to follow.” Justice Russell Nigro did not participate in the case. According to the opinion, Dr. Jorge Ferrer, the plaintiff, received his medical degree in 1957 in Argentina. He decided to dedicate his career to leukemia and cancer research and came to America in order to pursue that goal. He was recruited by a professor at the University of Pennsylvania, Dr. Robert R. Marshak, who was researching bovine leukemia in cattle, a disease that he said is similar to human leukemia. Zappala said Marshak expected that Ferrer would develop a large laboratory group that would study bovine leukemia. Ferrer accepted a position as an associate professor without tenure but was offered tenure within five years. Ferrer achieved some success with his studies, Zappala said, and he planned to develop the bovine leukemia system, which would mean growing large quantities of the virus for study. Ferrer anticipated using the research in his efforts to study human leukemia, Zappala said. Eventually, Ferrer designed an experiment for the development of an animal model for the human leukemia virus (HTLV-1) using sheep and cattle, Zappala said. Ferrer submitted a protocol for the experiment to the Institutional Animal Care and Use Committee (IACUC), which was approved. Ferrer secured lambs to use in the experiment from a veterinarian at the university’s New Bolton Center, according to the opinion. The lambs, which were inoculated with HTLV-1, were tagged to distinguish them from the other lambs in the center. The opinion stated that it was regular practice to obtain authorization from the principal investigator of a research project, Ferrer in this case, before procedures could be performed on animals. Zappala said Ferrer never authorized invasive procedures to be performed on the lambs, as the conditions of the experiment could have been nullified from such procedures. However, veterinary students performed invasive procedures on the lambs earmarked for the experiment. In addition, children were allowed to pet the lambs during tours of the center. Zappala said Ferrer was not consulted about the students’ procedures or the children’s contact with the lambs. According to research conducted by Dr. Bernard Poiesz, who was involved in the discovery of the human leukemia virus, there is no scientific evidence of HTLV-1 transmission though casual contact, such as the students and children had with the lambs, Zappala said. However, once the IACUC found out about the contact, it suspended Ferrer from further animal research pending an investigation, although he was allowed to continue supervising. Dean Edwin Andrews of the School of Veterinary Medicine started an investigation in accordance with the stated procedures concerning misconduct in research. Under those procedures, Zappala said, the dean is to appoint a preliminary inquiry committee of at least two individuals. The committee has the responsibility of determining whether allegations warrant a formal investigation. The committee is then to submit a written copy of its report to the provost, complainant and respondent. The respondent then has the opportunity to submit a written reply, the opinion stated. In Ferrer’s case, the committee recommended that there be a formal investigation in order to determine “the exact seriousness of the risk to university personnel and students and the public.” Under the procedures, the dean was then to appoint a formal investigative committee of at least three individuals, which he did. The committee concluded that Ferrer was not guilty of misconduct in research, Zappala said. However, two weeks after Andrews received the report, he sent a memorandum to the chairman of the committee identifying several individuals for the committee to interview and several questions to be resolved, according to the opinion. Zappala said the procedures do not authorize the involvement of a dean in the formal investigative process once the committee has been established. Nonetheless, the committee conducted the interviews and came to the same conclusion: that Ferrer was not guilty. “The committee concluded that the failure to segregate the lambs was a violation ‘of a low order because the likelihood of infectivity from the types of contact the occurred were very low,’” Zappala wrote. The committee also found that lack of communication between university departments contributed to Ferrer’s error. Once a committee finds that charges against a respondent are unjustified, Zappala said, under the rules the dean does not have the authority to take any further action against him or her. However, Andrews said he simply did not agree with the committee’s findings, Zappala wrote, and imposed severe sanctions on Ferrer. The sanctions included prohibiting Ferrer from conducting or supervising any studies on HTLV-1 or any other human pathogen for two years and requiring that his laboratory be monitored by the university’s Office of Environmental Health and Safety, according to the opinion. The university also informed major funders of Ferrer’s research about the incident. Ferrer filed a complaint with the Senate Committee on Academic Freedom and Responsibility, which is made up of seven faculty members elected by the university senate. SCAFR submitted a report stating that the sanctions against Ferrer should be removed, Zappala said. SCAFR also found that the university should help Ferrer keep his laboratory operating so that he could again compete for outside funds. Andrews rejected the SCAFR recommendations, the opinion stated. Zappala called the effects of the sanctions on Ferrer’s research “devastating.” “The animal research that was being conducted by Dr. Ferrer was completely shut down as a result,” Zappala said. Ferrer filed a complaint in Philadelphia Common Pleas Court against the university trustees and several administrators, arguing they breached his rights under the university’s procedures concerning misconduct in research. Ferrer said the procedures constituted part of his contract with the university. A jury found that the procedures were part of Ferrer’s employment agreement and that the university breached that agreement, causing harm to Ferrer. The jury awarded Ferrer $5 million. The defendants filed a motion for post-trial relief, but the trial court rejected their claim that the jury award was not based on sufficient evidence and said the jury reasonably concluded that $5 million was the amount necessary to make Ferrer whole again. The Superior Court reversed, finding that Ferrer suffered no damages from the breach of contract because the only basis for damages would be a claim for loss of future funding. The Superior Court also found that the jury had been improperly instructed on damages. On appeal to the Pennsylvania Supreme Court, a majority of the justices found that the Superior Court erred in its characterization of Ferrer’s damages. “Dr. Ferrer’s claim for damages was not premised on funding that he was projecting to receive in the future. Nor did Dr. Ferrer claim to have lost any salary or benefits,” Zappala said. “Instead, he sought to recover damages sustained by the university’s actions that halted his ability to perform his scientific research, as the university’s breach resulted in the complete dismantling and destruction of his research program. Dr. Ferrer’s pursuit of damages in this regard was appropriate based on traditional principles of contract law.” Zappala cited the court’s 2001 decision in Murphy v. Duquesne University, in which it observed that a tenured professor may bring a breach of contract claim when it is alleged that the university failed to comply with the procedures established by the parties’ contractual agreement. In Ferrer’s case, the defendants argued that regardless of whether the university could be held liable for breach of contract, an award of damages was not proper because Ferrer could not prove that he suffered tangible harm. Zappala said that the record, however, did in fact establish that Ferrer suffered “substantial lost opportunity” — although it was difficult to determine whether he was able to prove the definite amount of that loss, Zappala said. Rather than arguing that the award was impermissibly speculative, the defendants asserted it was arbitrary, excessive and not supported by the evidence, Zappala said. The argument was based on the defendants’ assertion that Ferrer’s expert established an outside boundary of $2.9 million, he said. The majority found that the defendants’ claim had merit and reduced the award to $2.9 million, remanding to the trial court for a recalculation of prejudgment interest. The court then considered whether the jury was properly instructed, concluding that the Superior Court erred in finding the instruction was insufficient. Thomas A. Sprague and Joseph R. Podraza of Philadelphia’s Sprague & Sprague represented Ferrer. David Rudovsky of Philadelphia’s Kairys, Rudovsky, Epstein & Rau represented the defendants.

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