Judge Upholds Stem Cell Initiative

Legal challenges to the state’s $3-billion stem cell initiative were rejected Friday by an Alameda County Superior Court judge in a strongly worded ruling.

The lawsuits by taxpayer and religious groups have blocked the state’s ability to issue the bonds that will allow it to hand out an estimated $300 million a year over a decade for stem cell research.

Challengers vowed to appeal to the California Supreme Court -- a move certain to extend the legal battle until at least next year.

“We are disappointed but not surprised with the judge’s ruling,” Dana Cody, executive director of Life Legal Defense Fund, which represented two taxpayer groups, said in a statement. Cody added that Judge Bonnie Sabraw “failed to engage our arguments and case law.”

But backers of Proposition 71 -- approved by voters in November 2004 -- said Sabraw’s 43-page decision raised the prospect that the California Institute for Regenerative Medicine in San Francisco could soon move forward with its core mandate.

Robert Klein, the initiative’s main proponent and now the chairman of the institute’s independent oversight committee, called the ruling a victory for stem cell research.

“Given the strength of this court decision,” he said, “the opponents to Proposition 71 should demonstrate their respect for the voters of California who overwhelming approved this initiative and patient families who suffer every day with the advance of chronic disease by dropping their intent to appeal.”

Stem cells hold promise for treatment of a number of diseases, including Alzheimer’s, Parkinson’s and juvenile diabetes. But the Bush administration has limited the use of embryonic stem cells in research because of moral objections to the use of discarded embryos. Several plaintiffs in the California lawsuits hold similar views.

Sabraw forcefully rejected the challengers’ key contention: that the Stem Cell Research and Cures Act violated the state Constitution by creating a publicly funded entity that was not “under the exclusive management and control” of the state.

“Plaintiffs did not present any evidence that the state is appropriating funds for any purpose or benefit other than a public purpose -- the public purpose declared in Proposition 71 of fighting disease and promoting the general economy of the state,” she wrote.

She also concluded that the institute and its oversight board “are operating in the same fashion as other state agencies,” with adequate state oversight.

Sabraw also systematically rejected all other claims by the plaintiffs -- People’s Advocate, the National Tax Limitation Foundation and the California Family Bioethics Council. Among those: that the stem cell institute’s board is plagued by conflicts of interest and that voters were misled.

Hank Greely, a law professor and chairman of the Stanford Center for Biomedical Ethics, called the opinion “long and careful” but not surprising. “I thought the cases were very weak to begin with. I think the judge’s opinion bears that out,” he said.

Greely added that the ruling could give more confidence to investors whom Klein is soliciting to purchase bond-anticipation notes to help fund the institute and its work during the litigation. Buyers of the never-before-issued state bonds would be repaid only if the litigation is resolved in the state’s favor and general obligation bonds are issued.

The state earlier this month issued $14 million in such bonds, and Klein has said he has secured an additional $32 million in commitments from bond buyers.

“We look forward to the future with great optimism,” Dr. Gerald S. Levey, dean of UCLA’s David Geffen School of Medicine, said in a statement.

Concerns about whether the state’s oversight of the institute and the public’s access to the decision-making process are adequate have been raised by state legislators, public watchdog groups and other constituents who did not support the litigation.

John Simpson of the Foundation for Taxpayer and Consumer Rights cautioned Friday that the institute must continue to act in a transparent fashion if it is to prevail “in the court of public opinion.”

While he applauded Sabraw’s ruling, he said the legal delay’s “silver lining” was to slow down the process and ensure that key regulations over issues such as state ownership rights to any discoveries are put in place.