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embryonic stem cell colonies from the lab of developmental biologist James Thompson
Source: University of Wisconsin-Madison.
Used with permission © University of Wisconsin Board of Regents

California Stem Cell Research and Cures Finance Committee considers authorizing stem cell bond sales

On May 9, 2005, the California Stem Cell Research and Cures Finance Committee (CSCRCFC), a group created by the California Stem Cell Research and Cures Bond Act of 2004 ("Proposition 71"), met in the Sacramento office of California State Treasurer Phil Angelides.

As can be seen in the officially published agenda of this meeting, the CSCRCFC planned to consider:

Agenda Item 6: authorizing "the State Treasurer to employ bond counsel for legal opinions related to the sale of bonds and commercial paper under the California Stem Cell Research and Cures Bond Act of 2004"

Agenda Item 7: "authorizing the issuance of State of California Stem Cell Research and Cures Bonds or Commercial Paper Notes In the Aggregate Principal Amount Not to Exceed $3,000,000,000. (Including provisions authorizing the agency to obtain loans from the Pooled Money Investment Account or the General Fund)"

Agenda Item 8: "authorizing the issuance of State of California Stem Cell Research and Cures Refunding Bonds In the Aggregate Principal Amount Not to Exceed $3,000,000,000"

Agenda Item 9: "authorizing the issuance of State of California Stem Cell Research and Cures Bond Anticipation Notes in the Aggregate Principal Amount Not to Exceed $300,000,000"

Agenda Item 10 "Adjournment to a closed session to confer with legal counsel, pursuant to Government Code Section 11126(e)(2)(C), regarding the possibility of initiating litigation pursuant to Code of Civil Procedure Section 860 et seq. to determine the validity of any bonds it may determine to issue and contracts it may determine to authorize pursuant to Agenda Items 7, 8, and 9 above, and matters pertaining to such litigation"

the "window" for "validation actions" opens

According to David Llewellyn, attorney for the California Family Bioethics Council (CFBC), May 9, 2005, marked the first day of a 60-day period during which the CSCRCFC was legally entitled to "initiate litigation…to determine the validity of any bonds it may determine to issue."

as it closes, David Llewellyn files a "reverse validation action"

On July 6, 2005, as that legal window was closing, and the CSCRCFC had not yet filed such litigation to validate the sale of stem cell bonds authorized by Proposition 71, Mr. Llewellyn filed a "reverse validation action" in Sacramento County Superior Court.

The intention of this litigation, filed on behalf of Mr. Llewellyn's client, the CFBC, was to invalidate Proposition 71, the actions of all entities created by Proposition 71 (including the Independent Citizens' Oversight Committee (ICOC), the California Institute for Regenerative Medicine (CIRM), its working groups and committees, and any funding involving these entities.

California Attorney General Bill Lockyer asks Mr. Llewellyn to re-format his lawsuit

The next day, July 7, 2005, California Attorney General Bill Lockyer, in his capacity as attorney for the ICOC, asked that Mr. Llewellyn "restructure" or "reformat" his filing in this case, which Mr. Llewellyn says he did before re-filing his case on July 8, 2005.

Having filed the case before the statute of limitations for doing so ran out, he was able to re-file the case after the deadline without penalty.

To access a copy of this re-formatted filing of the CFBC "reverse validation action" lawsuit against Proposition and everything created by it, click here.

David Llewellyn explains the grounds for this "reverse validation action"

Speaking this afternoon with a reporter from California Politics Today and Podmedia Reports, Mr. Llewellyn listed some of the arguments he makes in his petition to the Sacramento County Superior Court in this "reverse validation action":

1. ICOC Board Members have serious conflicts of interest involving their connections to universities, private bio-medical corporations, and disease advocacy groups
2. Proposition 71 violated the "single-subject" rule under which ballot initiatives can only address a single subject
3. Proposition 71 interferes with existing rights belonging to the Regents of the University of California
4. California election laws were violated by the failure of Proposition 71's proponents to properly disclose the revisions to existing conflict of interest laws entailed in that measure
5. The ICOC and the CIRM, as constituted by Proposition 71, are not under the exclusive control of the State of California, as required by Article XVI, Section 3 of the California Constitution

Attorney General Lockyer informs Mr. Llewellyn that he "intends" to seek the consolidation of multiple lawsuits against the ICOC

According to Mr. Llewellyn, following his re-filing of this case on July 8, 2005, he received a letter from Attorney General Lockyer saying that he (the A.G.), intended to file a motion to consolidate the CFBC case with another lawsuit being brought against the ICOC, the case being brought by attorney Dana Cody on behalf of People's Advocate.

This other case makes the claim that the ICOC, due to the provisions of Article XVI, Section 3, of the California Constitution, has no legal right to exist. A judgment in favor of the People's Advocate's position that the ICOC has no legal right to exist would, of course, mean that it could not raise $3 billion from bond sales and/or give that money to the CIRM to finance embryonic, or any other kind of, bio-medical research.

Mr. Llewellyn also said that Attorney General Lockyer indicated in his letter his intention to move the consolidated case from the Sacramento County Superior Court to the Alameda County Superior Court. People's Advocate v. ICOC is being heard in Alameda County Superior Court. The ICOC's temporary offices are located in Emeryville, California, which is in Alameda County.

David Llewellyn "absolutely" opposes such a consolidation

Asked if he favored consolidating these two cases, Mr. Llewellyn said, "Absolutely not."

David Llewellyn explains why such a consolidation is not allowed under California law

Mr. Llewellyn said that, in his letter to him, Attorney General Lockyer cited, in support of such a consolidation, Chapter 865 of the California Code of Civil Procedure (CCP), which says:

"865. If more than one action is pending concerning similar contests which may be brought under this chapter, they shall be consolidated for trial."

However, according to Mr. Llewellyn, "similar contests which may be brought under this chapter" refers specifically to validation actions only. (Section 860 of the CCP refers to actions "to determine the validity of such matter.")

According to Mr. Llewellyn, People's Advocate v. ICOC, the case being brought on constitutional grounds by Ms. Cody, is a standard-type of lawsuit, one seeking a "declaration of injunctive relief," while the case being brought in Sacramento County Superior Court by him on behalf of the CFBC is a "reverse validation action," which is a type of validation action and therefore not subject, under the law, to being consolidated with the standard type of lawsuit seeking a "declaration of injunctive relief" being brought against the ICOC by Ms. Cody on behalf of People's Advocate.

Put another way, Chapter 865 of the California Code of Civil Procedure allows for the consolidation of multiple validation actions, but does not allow the consolidation of a validation action with a non-validation action.

Lawsuits seeking a "declaration of injunctive relief" and validation lawsuits, said Mr. Llewellyn, are "different tools operating under different rules."

"bond anticipation notes" are specifically challenged by the lawsuit being brought by Mr. Llewellyn

Asked about the ability of the ICOC to float "bond anticipation notes" of the type mentioned in Agenda Item 9 above in the amount of $300,000,000, Mr. Llewellyn said that his re-filed lawsuit contains a "specific challenge" to the CSCRCFC's right to offer such financial instruments for sale.

Something will be argued in Alameda County Superior Court on August 4, 2005

In a July 12, 2005 interview, Ms. Cody indicated that the court hearing in Alameda County Superior Court scheduled for August 4, 2005, and originally intended as a forum for arguing the merits of People's Advocate v. ICOC, has now been re-configured as a hearing to argue about the consolidation of that case with the one being brought by Mr. Llewellyn on behalf of CFBC.

While citing a similar, August 4, 2005, date mentioned by Attorney General Lockyer in the letter he sent him stating his intention to seek the consolidation of the two cases, Mr. Llewellyn indicated that, as far as he knew, no court papers had yet been filed to that effect, as of the afternoon of Wednesday, July 13, 2005.