Litigation has scared off investors
Monterey County Herald (California)
The future of embryonic stem cell research could be shaped in a sleepy suburban courtroom where two taxpayer groups are challenging the legality of California’s new agency dedicated to the controversial field.
Opening statements were set to begin today in a pair of lawsuits seeking to invalidate the law that created the California Institute of Regenerative Medicine, which is authorized to hand out $3 billion in research grants. The lawsuits allege — among other things — that it violates a state constitutional mandate that the spending of taxpayer dollars be under state control.
”The act delegates the disbursal of huge sums of public money to the unfettered discretion of an institution whose governing board and working groups are unaccountable to the public,” one of the lawsuits said.
When voters created the institute in November 2004, stem cell scientists saw the victory giving new traction to a field hamstrung by federal limitations on funding.
Proposition 71 authorized the agency to dole out an average of $300 million in research grants each year over the next 10 years. But 15 months later, the agency has yet to hand out a dime because of its legal troubles.
The agency has hired staff, opened a San Francisco office and paid its bills with a $3 million loan from the state and a $5 million donation from sound pioneer Ray Dolby and his wife. But the lawsuits have scared off Wall Street lenders, who won’t buy the institute’s bonds until the litigation is resolved.
Human embryonic stem cells are created in the first days after conception and give rise to all the organs and tissues in the human body. Scientists hope they can someday use stem cells to replace diseased tissue, but many social conservatives, including President Bush, oppose the work because human embryos are destroyed during research.
Proposition 71 came as a reaction to administration’s decision to cap federal funding for stem cell research at about $25 million annually and impose strict research guidelines that scientists say limit advances.
The research guidelines in the California proposition, backed by 59 percent of the electorate, are much broader than the federal rules.
Wealthy Palo Alto real estate developer Robert Klein spearheaded the ballot drive, aided by a $30 million campaign financed in part by billionaire tycoons like Microsoft Corp.’s Bill Gates.
The state’s research universities launched stem cell programs and began to recruit new talent in anticipation of multimillion-dollar state grants. The California plan even prompted other states to announce similar, if far less ambitious plans.
But the lack of funding has prompted the schools to scale back their immediate plans to expand stem cell research and has hampered recruiting. The sought-after husband-and-wife research team of Neal Copeland and Nancy Jenkins turned down an offer from Stanford University and accepted positions at a government-supported lab in Singapore. Copeland said the state’s inability to fund stem cell research played a large role in the decision.
”We had hoped we would be able to get funding from the stem cell institute,” Copeland said. ”But without that money available that would have been very difficult.”
The lawsuits contend the committee overseeing the agency is beyond state control. Elected state officials appoint 22 of the 29 board members, and five are appointed by the University of California system. The two remaining members are a chair and vice chair appointed by the board itself.
One lawsuit was filed by the People’s Advocate and the National Tax Limitation Foundation, represented by Life Legal Defense Foundation, an anti-abortion group that fought unsuccessfully earlier this year to keep a severely brain-damaged Florida woman alive in a high-profile right-to-die case.
Klein, who is now chair of the agency’s oversight committee, has said the taxpayer foundation is a front for religious groups who opposed embryonic stem cell research. But the group’s lawyers have denied the claim, even though they concede the group opposes the research on moral grounds.
The second suit was filed by a new nonprofit called the California Family Bioethics Council, which describes itself as a stem cell research watchdog group.
The cases are being heard together by an Alameda County Superior Court judge in a non-jury trial in Hayward.
Lawyers for all sides declined to comment on the case or didn’t return telephone calls.
In November, Judge Bonnie Lewman Sabraw refused to toss out the lawsuits, but said the taxpayer groups had a high legal hurdle to prove the voter-approved agency was ”clearly, positively and unmistakably unconstitutional.”
Even some of the agency’s harshest critics believe the institute will prevail. Recent actions, such as ensuring the state will share any potential profits gleaned from state grants, show it’s starting to function as a government agency.
”The stem cell institute’s recent responsiveness to public input in a number of areas is encouraging,” said John Simpson of the Foundation for Taxpayer and Consumer Rights, which is not part of the court case. ”The stem cell oversight committee members finally understand they are a state agency and must involve the public.”
