The California First District Court of Appeal in San Francisco unanimously ruled on 26 February that 'Proposition 71' is constitutional, strongly affirming that it 'suffers from no constitutional or other legal infirmity'. Proposition 71 called for the creation of the California Institute for Regenerative Medicine (CIRM), its oversight committee and designated $3 billion in state funds over ten years toward human embryonic stem cell (hES cell) research, the world's largest funding initiative for this type of research. The residents of California passed Proposition 71 with a 59 per cent majority in November 2004.
Two taxpayer groups, People's Advocate and National Tax Limitation Foundation, and the California Family Bioethics Council, an anti-abortion group, launched joint litigation against the use of state funds for the programme, essentially freezing the use of its bonds needed to fund the initiative while litigation pended for over two years.
Robert Klein, chairman of CIRM's oversight committee and author of the original proposal for Prop 71, described the victory as 'one huge step for California'. He believes the decision is so strong that the California Supreme Court will likely decline to hear it if the decision were appealed, which is probable according to plaintiff lawyer Dana Cody. If the State Supreme Court refuses to hear a further appeal then the bonds could be free to issue as soon as 120 days from now, and could be used to reimburse the $181 million loan approved by the California Stem cell Research and Cures Finance Committee in November 2006. This followed Governor Schwarzenegger's $150 million general state funds loan mandate and $31 million donated privately, in order to get research started despite the litigation.
The three-judge ruling was delivered in a fifty-eight page decision that upheld the previous Judge Bonnie Sabraw's judgement given in April 2006 at the California Superior Court, which found that the plaintiffs failed to demonstrate the programme's unconstitutionality, and noted that CIRM and its oversight committee 'are operating in the same fashion as other state agencies'.
The appellate court dispelled the three alleged grounds: it did not violate the structure of ballot initiatives, nor any rules on conflicts of interest, nor laws concerning state funding. The judges decided that there was sufficient state control exercised over the funds through state audits and an oversight committee appointed by elected officials which operates appropriate voting precautions to prohibit prejudiced votes. Furthermore, they found no violation of the state law requiring only single-subject ballot initiatives, because they regarded hES cell research to be 'as specific as the circumstances permit' given its early stage of scientific discovery and 'reasonably limited to a single subject'.
Schwarzenegger declared the ruling a 'victory' on behalf of 'California voters'. 'I'm also proud of California's leadership,' he added,'...to begin work on this potentially life-saving science'. 'Through loans, the Independent Oversight Committee at CIRM earlier this month announced $45 million in grants to 72 research projects at California institutions with another 25 grants totalling $80 million to be announced next month to support hES cell research.