Stem Cell Standstill: Can lawsuits thwart the development of a lucrative stem cell industry?

California voters’ decision in 2004 to spend nearly $3 billion on stem cell research has energized “sanctity of life” lawyers both here and in other parts of the United States. This network of attorneys and a cadre of nonprofits started out more than a decade ago fighting to protect abortion protesters’ free speech rights. More recently, these groups have battled against euthanasia and life-support removal. Now they’re weighing in on another great controversy of modern medicine.

Scientists believe that human stem cells have the potential to help cure several diseases, such as diabetes, cancer, Parkinson’s, and Alzheimer’s. But opponents note that the laboratory process used to create new stem cell lines destroys human embryos. President Bush has restricted federal funding to research using the 78 existing stem cell lines and denied any federal money for experimentation on new lines. So far, Congress has gone along. Two years ago California found a way around those federal funding roadblocks, setting the stage for development of a potentially lucrative stem cell industry, when 59 percent of voters approved Proposition 71. The initiative authorizes tax-free bonds to provide up to $350 million a year over the next decade to support stem cell research in California— far and away more than any other state has proposed spending on such experiments. But the California Institute for Regenerative Medicine has yet to spend a single dime from the state treasury on stem cell research. That’s because Sacramento attorney Dana C. Cody and other like-minded lawyers have stymied the program by filing lawsuits.

Two lawsuits were recently consolidated and set for jury trial in Alameda County on February 27. In one, Cody, the executive director of the Life Legal Defense Foundation, represents two taxpayer groups: the Peoples’ Advocate and the National Tax Limitation Foundation. Her counterpart, David Llewellyn, a longtime antiabortion activist, filed the second suit on behalf of the California Family Bioethics Council. The lawsuits allege that, unlike other state agencies created to distribute public funds, the institute operates outside state control. They also assert that institute board members have conflicts of interest because of their affiliations with biotech companies, universities, and interest groups that stand to receive grants. Cody says she would also have argued that embryonic stem cell research denies equal protection under the 14th Amendment to the unborn, but she doubted the courts would be receptive. Such concerns, however, did not stop Martin Palmer, lead attorney for the Maryland-based National Association for the Advancement of Preborn Children, from making that argument in a Los Angeles federal court. Palmer said embryonic stem cell research treats embryos like property rather than human beings. “It’s reminiscent of the Dred Scott case,” he asserts.

Other groups have joined the fray, including the Arizona-based Alliance Defense Fund and the 35-year-old Chicago-based Americans United for Life, which has served as a resource for lawmakers in 43 states who oppose embryonic stem cell research. With the passage of Prop. 71, California is clearly where the action is. As Cody observes, “Other states are looking at Prop. 71 and thinking about doing the same thing.” So, if Cody wins her case, it’s bound to have a ripple effect. —Robert Selna

[Reprinted with permission from the March 2006 issue of California Lawyer magazine. © 2006 Daily Journal Corporation, San Francisco, California. (]