Legal cloud lifts from California stem-cell effort

The California Supreme Court swept away the last legal impediment to the state’s $3 billion stem-cell research program Wednesday when it declined to review two lawsuits that challenged its constitutionality.

Ideological foes of the state’s stem-cell effort, which voters approved by a large margin in a 2004 ballot initiative, have waged a two-year battle in the courts to shut it down. The opponents — a coalition of anti-tax and limited-government conservatives and anti-abortion activists — argued that the California Institute for Regenerative Medicine is rife with conflicts of interest and that its establishment violated the state constitution because CIRM wasn’t fully under control of the state government. (The initiative text shields CIRM from legislative interference for three years, and beyond that point requires legislative supermajorities to enact any changes.)

The suits effectively froze CIRM’s ability to dole out research funds, since the uncertainty over entire effort’s constitutionality made it impossible to sell the state bonds that will fund research proposals and laboratory construction at universities across the state.

The court’s decision was largely foreshadowed by a district court ruling in CIRM’s favor more than a year ago. The institute’s opponents, however, insisted on pressing their case through two levels of appeal, to no avail.

Yesterday’s ruling occasioned the overheated rhetoric we’ve become accustomed to whenever the subject of stem cells comes up. Robert Klein II, chairman of CIRM’s powerful advisory board and effectively head honcho of the entire effort, called the ruling “a great victory” and said “our $3 billion is free from these restrictions put on by the ideological right.” Meanwhile, Terry Thompson, a lawyer for two of the plaintiffs, declared that the ruling “establishes a precedent for well-meaning but misdirected rich people to invade the public treasury for projects of their own and parlay a few million dollars [of campaign expenses] into a few billion dollars of wasted taxpayer money.”

CIRM has already managed to issue $158.8 million in research grants, thanks to some creative financing that included a $150 million state loan approved by Gov. Arnold Schwarzenegger and the sale of $45 million in “bond anticipation notes” to mostly wealthy individuals whose money would have been lost had the court decision gone the other way. The first $250 million in state bonds, likely to be issued in July or August, will mostly go to repay the loan and notes.

With California’s stem-cell program in the clear, the big question now is whether activists will mobilize against similar but smaller scale efforts in New York and Massachusetts — not to mention, of course, whether their luck will be any better if they do.

For more, see the SF Chronicle, the San Jose Mercury News and the LAT.