Judge OKs legality of California’s $3 billion stem cell institute

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SAN FRANCISCO (AP) – California’s novel, $3 billion stem cell research institute is a legitimate state agency and two lawsuits challenging its constitutionality have no merit, a state judge ruled Friday.

The ruling came a month after a four-day trial in which lawyers with connections to anti-abortion groups claimed the country’s most ambitious stem cell research agency violated California law because it wasn’t a true state agency and its managers had a host of conflicts of interest.

But Alameda County Superior Court Judge Bonnie Lewman Sabraw handed the California Institute for Regenerative Medicine an unambiguous victory, writing that the lawsuits failed to show the voter-approved law that created the agency in 2004 “is clearly, positively and unmistakably unconstitutional.”

Lewman’s ruling becomes official in 10 days unless the losing attorneys present new and dramatically different arguments.

Proposition 71 was placed on the California ballot in November 2004 to counter President Bush’s stem cell research policy, which severely restricts the amount of federal funding that can be used for the work opposed by many conservative Christian groups.

Approved by 59 percent of the state’s voters, it will fund about $300 million annually in stem cell research that the federal government won’t.

“It’s unfortunate that the plaintiffs, after losing at the polls, went to court to frustrate the voters’ will,” California Attorney General Bill Lockyer said. “The sooner this legal fight is over, the sooner California can move to where the people want it – in the forefront of stem cell research.”

The stem cell agency’s finances nevertheless will remain in limbo even after Friday’s ruling. The litigation prevented the Institute for Regenerative Medicine from borrowing any of the $3 billion to which it is authorized from traditional Wall Street bond buyers. That won’t change until the expected appeals of the verdict are exhausted, probably sometime next year.

David Llewellyn, a lawyer for one of the groups suing the stem cell institute, said he will probably petition the California Supreme Court to take the case directly, bypassing the appellate courts.

“There are several curiosities in the verdict,” said Llewellyn, who represents the California Family Bioethics Council.

Llewellyn said he still thinks Proposition 71 violates state laws against proposing two subjects on a single ballot measure even though the judge said she found no evidence to support that claim. Llewellyn argued that because Proposition 71 authorized funding for both stem cell work and other kinds of medical research, it violated the single-subject rule.

Despite the litigation, the agency managed to make its first grants earlier this month after six philanthropic organizations loaned the institute a combined $14 million, to be paid back once the Wall Street bond market was opened to the agency. Some $12.1 million in grants were awarded to 16 universities and nonprofit research institutes to set up basic stem cell research training programs.

The agency also is earmarked to receive the money from a May 22 event that will include performances by Julie Andrews and Marvin Hamlisch. With tickets costing as much as $10,000 each, the unorthodox fundraising has attracted some critics who complain state government has no business raising money from the private sector.

But agency officials have said such methods of accruing cash are necessary to begin fulfilling the institute’s mission to develop medicines and diagnostic tools by advancing human embryonic stem cell research.

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