Foes say enterprise is illegal because it’s outside state control

THE SAN FRANCISCO CHRONICLE

Alameda County Superior Court Judge Bonnie Sabraw set a trial for Feb. 27 to decide whether California’s Proposition 71 stem cell program violates the state Constitution.

Sabraw presided over a 30-minute hearing in her Hayward courtroom Tuesday to work out a timetable for the next critical phase in litigation brought by plaintiffs who say the voter-approved stem cell enterprise is illegal because it operates outside “the exclusive management and control of the state.”

While the court proceeding was under way, stem cell policymakers were in Southern California to lay groundwork for their long-awaited first round of financing. Their goal is to generate up to $50 million, more than enough to cover initial training grants for would-be stem cell scientists at California medical schools and other nonprofit research institutions.

Officials meeting at City of Hope Cancer Research Center outside Los Angeles adopted guidelines governing profit rights and other “intellectual property” rules for researchers receiving Prop. 71 grants. A much more detailed review of final policies is just beginning.

Critics argue that stem cell policy makers are allowing researchers too much control over who ultimately gains from taxpayer-financed work.

“They’re allowing the grant recipients to own the research products,” said Jerry Flanagan of the Foundation for Taxpayer and Consumer Rights in Los Angeles, one of several advocacy groups riding herd on the stem cell program’s formative months.

“It’s true this is only for the training grants to nonprofits, but the problem is once you establish the interim rules, that becomes the starting point for all the following discussions,” he said.

Prop. 71 was approved by state voters in November 2004, creating the California Institute for Regenerative Medicine to administer a $3 billion research program focused mainly on human embryonic stem cells. Those starter cells can mature into all the body’s component parts and are prized as windows on early human development and for their potential use as disease models, if not medical cure-alls.

The research is controversial because it typically involves destruction of early-stage human embryos or use of experimental cell-cloning methods. Even some of those who hold no moral objections worry that Prop. 71’s implementation may waste public resources and damage the health of women solicited to donate eggs needed for some research.

Most research on the embryo-derived cell lines is barred from receiving federal grants under a policy enacted by the Bush administration in 2001. California’s move to substitute for the National Institutes of Health inspired programs around the country — and led some critics into court hoping to throw out Prop. 71.

The litigation is backed by taxpayer groups, People’s Advocate and the National Tax Limitation Committee, and the California Family Bioethics Council in Riverside.

They maintain, among other things, that Prop. 71 cedes government power to private interests and that voters were deliberately misled about financial terms.

Plaintiff attorneys lost some key arguments in preliminary legal wrangling last week but kept the litigation alive for trial. Now, they face tight deadlines for gathering evidence, which may include depositions from the 29 members of the stem cell institute’s governing board, known as the Independent Citizens Oversight Committee, as well as outside participants in advisory working groups.

“Our goal is to win,” said Dana Cody, executive director of the Life Legal Defense Foundation in Sacramento, one of the attorneys working on the case.

She and her allies clearly have no plans to drop the litigation even if they lose at trial. Barring some “glaring factual discovery,” Cody said, “we will be going on to the appeals court and then to the Supreme Court if we have to.”

Attorneys for the stem cell institute said Tuesday they wanted to limit the scope of pre-trial discovery, arguing that the constitutionality of Prop. 71 should require little to prove or disprove beyond the law itself.

“We have a disagreement whether discovery is necessary in this case at all,” said James Harrison, special counsel for the stem cell institute.