Stem-cell institute wins court ruling
APPEALS WILL DELAY FUNDING
line By John Boudreau
linec Mercury News
A state judge ruled Friday that California's voter-approved $3 billion stem cell research institute is a legitimate organization that should be able to sell bonds to fund research.
Alameda County Superior Court Judge Bonnie Sabraw dismissed two lawsuits brought by anti-abortion and taxpayer groups challenging the legality of the institute, writing they failed to prove the 2004 voter-initiative that created the institute is unconstitutional.
The battle over the agency's legality, though, is far from over. One of the plaintiff groups, the Life Legal Defense Foundation in Napa, vowed to appeal the decision.
Opponents challenged the state-funded stem cell research program on numerous grounds, including the argument that the institute is not a California agency and its management has conflicts of interest.
``We are disappointed but not really surprised,'' said Katherine Short, legal director of the Life Legal Defense Foundation. ``We could see the way things were trending. I was surprised by the lack of analysis in the court's decision. I don't think she really engaged any of our argument.
``I saw a lot of the AG's brief in her decision, let's put it that way,'' she said of state Attorney General Bill Lockyer.
James Harrison, the stem-cell program's lawyer, said the ruling, which came a month after a trial, systematically dismisses every complaint against the institute.
``It's fair to say the plaintiffs made a broad-based constitutional attack on Prop. 71,'' he said, referring to the ballot proposition that created the institute. ``The court went through each claim and rejected it.''
Institute chairman Robert Klein said the decision ``clearly states the agency is firmly under state control with very detailed layers of public accountability. We have a victory across the board on every issue presented.''
Until the appeals process is exhausted, a process that could stretch on for 18 months or so and eventually reach the California Supreme Court, the institute will not be able to issue the bonds to raise the $3 billion that voters approved.
For now, the organization can tap into $200 million in so-called bond anticipation notes, which are funded by donors who could lose their investment if courts invalidate the bonds needed to repay them. Six philanthropic groups -- including the Gordon & Betty Moore Foundation; Blum Capital Partners, headed by Richard Blum, husband of Sen. Dianne Feinstein, and the Beneficus Foundation, founded by venture capitalist John Doerr -- have bought $14 million in bond anticipation notes. The bonds mature in two years at variable rates but no more than 5 percent.
Supporters of the agency are planning a May 22 black-tie fundraiser, a highly unusual move for a government organization.
Until the issue is fully resolved, venture capitalists and investors are hesitant to finance companies looking to make commercial products from the cells.
In 2001, President Bush severely restricted federal spending for embryonic stem-cell research because early-stage embryos are destroyed when the cells are used in experiments. That prompted advocates to place Prop. 71 on the state ballot, which was backed by 59 percent of California voters three years later.
Though Short's organization will appeal the decision to the state court of appeals, the case is destined to reach the state supreme court, she said.
``Nobody is going to take no for an answer,'' Short said. |
