USC scandal may cast shadow in court battle
Former dean was expected to help fight a lawsuit by UC
Six months after Dr. Carmen Puliafito stepped down as dean of USC’s medical school, he was called by the university to give sworn testimony as a witness in a lawsuit the institution was facing.
It was a sensitive matter with hundreds of millions of dollars potentially at stake, and two attorneys for the university sat with him as he answered questions.
Almost immediately, the opposing lawyer hit on a topic that was a closely guarded secret at USC: The circumstances of Puliafito’s abrupt resignation in March 2016. The former dean had a ready explanation, saying he had taken advantage of a “unique opportunity” at a biotech company. The response was succinct, matter-of-fact and, in light of recent revelations about his drug use and troubled tenure at USC, far from the whole story.
Of the many consequences of the Puliafito scandal for USC, few are as high-stakes as the possible effect on the court case that prompted his testimony last year.
Puliafito was expected to play a role in defending USC in the legal battle with the University of California system over the defection of a star UC Alzheimer’s disease researcher.
Puliafito helped woo the scientist and dozens of other academics as part of a strategy by USC President C.L. Max Nikias to vault the university into the ranks of elite research institutions.
UC is seeking $185 million in damages, along with a pu-
nitive award that could be several times that amount.
“With all that’s out there about him, he’s going to have a serious problem coming off as credible and being believed,” said Los Angeles attorney Brian Panish, a civil litigator who has represented clients in suits against both schools.
A Times investigation published last month revealed that Puliafito partied and used drugs with a circle of criminals and addicts while serving as dean. Puliafito engaged in this behavior during the period in 2015 in which he was recruiting the researcher, according to interviews with his associates and text messages they exchanged with him.
A spokeswoman for UC said it would not discuss its legal strategy “other than to say we are vigorously pursuing this case against USC.”
An attorney for USC said no decision had been made on whether to call Puliafito as a witness, but insisted the former dean’s testimony was not important to the university’s defense.
“He’s a bit player in this,” said attorney John Quinn.
In court filings this year, lawyers for USC highlighted a portion of the dean’s testimony in arguing that the case should be dismissed. Puliafito testified that the university wanted UC San Diego researcher Paul Aisen to join the faculty whether or not he brought along hundreds of millions of dollars in grant funding, a rejection of UC’s claim that USC was motivated by money in recruiting the scientist.
Legal experts said that even if USC decides not to use Puliafito’s testimony, UC’s legal team could ask for copies of his personnel record and attempt to make an issue in court of his conduct. That would set up a fight between USC and UC over whether jurors should be told about the skeletons in Puliafito’s closet if the case went to trial.
“The trial judge would have to decide whether the prejudicial, inflammatory value is outweighed by the probative value,” said Manhattan Beach civil lawyer John Taylor, who has represented clients with legal claims against USC.
The judge, Taylor added, “might say, ‘Suppose he was out partying like a rock star? How does that make it more or less believable to a jury?’ ”
USC is anticipating that UC will try to make Puliafito’s drug use a line of attack.
“I believe that they would do anything they could to try to poison the well, including introducing the dean’s personal problems,” USC lawyer Quinn said, adding that he expected a judge to reject such attempts as irrelevant.
The case is on hold while USC appeals a U.S. district judge’s ruling that moved the suit from federal court to San Diego County Superior Court, where it was originally filed.
By the time Puliafito was scheduled to be questioned under oath, the case was in its second year and UC had brushed off entreaties by USC to settle out of court. USC deputy general counsel Stacy Bratcher and other university lawyers met with the former dean three times to prepare him for the deposition, he later testified.
On the day of Puliafito’s testimony, Bratcher and another lawyer sat with him at a downtown law firm as he was questioned for about six hours, according to a transcript of the testimony. Portions were redacted at the request of USC.
On a video recording of part of the deposition, Puliafito appears self-assured, offering precise responses and brushing aside many questions as hypothetical and difficult to answer.
A few minutes into his testimony, he was asked for “the circumstances of your ceasing to be dean of the medical school.” An attorney for USC’s outside law firm, Viola Trebicka, initially protested that the question was “overbroad” and “vague” — objections a judge would rule on at a later date — and then directed him to “go ahead” and answer.
“I had a unique opportunity in the ophthalmic biotechnology industry, and I was able to continue my employment at USC on sabbatical and work for this biotech company,” he said.
The full story was more complicated. USC acknowledged after The Times’ report that the dean quit his post during a confrontation with the university provost about his behavior and job performance. That showdown capped years of complaints from faculty and staff about Puliafito’s drinking, temper and public humiliation of colleagues, according to interviews with former co-workers and written complaints to the administration.
He was not offered the biotech job at Ophthotech, a firm run by two longtime friends, until more than a month after he resigned, according to a company spokesman.
Quinn said he did not know whether lawyers for USC and Puliafito discussed how he would answer questions about his resignation before the deposition. He said attorneys for his firm “would never sponsor false testimony. We would never knowingly permit a witness to lie.” In a statement, a USC spokesman said the university general counsel’s office, where Bratcher works, “would never encourage a witness to perjure himself.”
Experts said UC could ask a judge to reopen the deposition in light of the new information about Puliafito’s past conduct. “I would get the personnel file and also question him about what happened. Maybe there is more that is not out there yet,” Panish said.
The court fight is being closely watched in academic circles. UC took the highly unusual step of suing its rival in 2015 after years of frustration over USC’s recruitment of faculty members who were recipients of big research grants. Such grants are an important income source for the state system.
These “transformative faculty,” as they are known at USC, have been key to Nikias’ strategy for raising the university’s national reputation. Puliafito spearheaded the effort during his eight-year tenure as dean, recruiting more than 70 academics from UC schools, Stanford, Harvard and other prestigious rivals.
After Puliafito helped woo away two well-funded UCLA neurology researchers in 2013, UC administrators were outraged and complained to government regulators, according to court filings. It is not unusual for professors to move to other institutions, often with the first university cooperating in the transfer of grant funding to the new school. But in UC’s view, USC had acted beyond accepted norms by targeting academics based on grant funding and strategizing secretly with those researchers while they were still employed by UC about moving grants to USC. The schools reached a confidential settlement requiring USC to pay UCLA more than $2 million, according to a copy of the agreement obtained through a public records request.
Late the next year, the dean set his sights on another UC prize: Alzheimer’s expert Paul Aisen. The UC San Diego neurology professor was a global leader in the search for a cure for the disease, and federal agencies and drug companies were expected to send more than $340 million in research grants to the lab he ran over the next five years.
“I am going to get more involved in this personally and quarterback the process,” Puliafito wrote in an email to Provost Michael Quick in April 2015. “We need this to happen.”
USC offered Aisen annual compensation of $500,000 — a salary bump of $110,000 — along with a home loan and other perks. He moved to USC in June 2015.
The loss reverberated at the highest levels of the UC system. President Janet Napolitano unsuccessfully lobbied the head of drug company Eli Lilly, a major funder of Aisen’s work, to keep its grant money at UC.
In July 2015, UC sued USC, Aisen and his lab colleagues for breach of fiduciary duty, interference with contracts, computer crimes and other claims. The university said USC had conspired with the researcher while he was still working for UC San Diego to interfere with the public university’s contractual relationships with grant funders and to seize control of crucial clinical trial data.
Subsequent filings suggested the depths of the hard feelings. In one, UC complained that the departing scientists had even made off with paper clips paid for by UC San Diego. In another, UC lawyers described USC as a “predatory private university” with a “law-of-thejungle mind-set.”
USC and Aisen countersued for defamation and other charges. Their lawyers wrote in the complaint that they were ready to settle the litigation and suggested the blame rested with UC for failing to fund Aisen’s work adequately. When he found a school that would, they wrote, UC engaged in “petty academic politics,” including trying to make him sign a loyalty oath and cutting off his email and phone service, tactics that they said endangered patient safety.
Aisen, Puliafito and other USC administrators insisted in depositions that the university had done nothing wrong. In his sworn testimony, the former dean testified that he was prepared to offer Aisen a faculty position even if his lucrative research grants stayed behind at UC San Diego.
“You were indifferent to whether or not the grant funding transferred with Dr. Aisen?” the UC lawyer asked.
“Yes,” Puliafito said, adding: “That’s the risk we were willing to take.”
San Francisco lawyer Stephen Hirschfeld, who has defended UC and other universities in civil suits, said the involvement of other officials in Aisen’s recruitment could blunt the effect of Puliafito’s credibility issues.
The university provost, a faculty chair, medical school administrators, and human resources officers played key roles in luring Aisen, according to court filings and deposition testimony.
Taylor, the Manhattan Beach lawyer, said that jurors could see Puliafito as a reflection “of the values of the university and the decision-makers there.”
The deposition offers tantalizing clues about the relationship between Puliafito and USC. At one point, the former dean was asked when he had last looked at the USC ethics code.
“Six months ago,” he replied. The deposition was on Sept. 23, 2016 — just a day short of the six-month anniversary of the meeting at which the provost confronted him with complaints from colleagues about his behavior.