Citations
- 147 Cal. App. 4th 1319
Full opinion text
Opinion
POLLAK, J.
Before us is an appeal from two consolidated actions challenging the validity of Proposition 71, the stem cell research initiative approved by a substantial majority of the voters at the General Election on November 2, 2004. Relying in significant part on the reasoning of California Assn. of Retail Tobacconists v. State of California (2003) 109 Cal.App.4th 792 [135 Cal.Rptr.2d 224] (CART), the trial court rejected the diverse challenges that appellants have directed to Proposition 71 and to the method of its enactment. We agree with the conclusions reached in the comprehensive opinion of the trial court and shall affirm its judgment.
Factual and Procedural History
A. Summary of Proposition 71
Although section 1 of the proposition states that the entire measure shall be known as the California Stem Cell Research and Cures Act, Proposition 71 in fact adds an amendment to the California Constitution, two separate acts to the Health and Safety Code, and expands the Government Code definition of “state service.”
Section 4 of the proposition adds to the Constitution article XXXV, establishing the California Institute for Regenerative Medicine (CIRM or the institute). The purpose of the institute, according to the constitutional amendment, is “(a) To make grants and loans for stem cell research, for research facilities, and for other vital research opportunities to realize therapies, protocols, and/or medical procedures that will result in, as speedily as possible, the cure for, and/or substantial mitigation of, major diseases, injuries, and orphan diseases, [f] (b) To support all stages of the process of developing cures, from laboratory research through successful clinical trials. [And] [f] (c) To establish the appropriate regulatory standards and oversight bodies for research and facilities development.” (Cal. Const., art. XXXV, § 2.)
Article XXXV of the California Constitution further establishes “a right to conduct stem cell research which includes research involving adult stem cells, cord blood stem cells, pluripotent stem cells, and/or progenitor cells.” (Id., § 5.) No funds of the institute, however, may be used for “research involving human reproductive cloning.” (Id., § 3.) The constitutional provision provides further, “Notwithstanding any other provision of this Constitution or any law, the institute, which is established in state government, may utilize state issued tax-exempt and taxable bonds to fund its operations, medical and scientific research, including therapy development through clinical trials, and facilities.” (Id., § 6.) The final section of the constitutional provision provides that the institute and its employees are exempt from civil service. (Id., § 7.)
To implement the goals of the constitutional provision, Proposition 71 adds to the Health and Safety Code the California Stem Cell Research and Cures Act (§ 125290.10 et seq.; hereafter the Cures Act or the Act) and the California Stem Cell Research and Cures Bond Act of 2004 (§ 125291.10 et seq.; hereafter the Bond Act).
To govern the institute, the Cures Act creates the Independent Citizen’s Oversight Committee (ICOC), which is “vested with full power, authority, and jurisdiction over the institute.” (§ 125290.15.) The ICOC consists of 29 members, 20 of whom are appointed by the Governor, the Lieutenant Governor, the Treasurer, or the Controller. Five are appointed by the chancellors of the five University of California campuses with medical schools. The Speaker of the Assembly and the President Pro Tempore of the Senate each appoints one member and the final two, a chairperson and vice-chairperson, are elected by the other ICOC members from persons nominated by the four constitutional officers. (§ 125290.20, subd. (a).) There are stringent qualifications for appointment designed to ensure that all members possess appropriate experience and expertise and that persons knowledgeable in the various disease groups that may benefit from the research are represented. In general, the members must be executive officers of California academic or research institutions with an established ability to conduct stem cell research, executive officers of a qualified life science commercial entity, or representatives of disease advocacy groups. Members are appointed for terms of either six or eight years, and may serve no more than two terms. (Id., subd. (c)(1).)
The ICOC is responsible for “overseeing] the operations of the institute.” (§ 125290.40, subd. (a).) The statute provides a long list of the ICOC’s functions, which include developing annual and long-term strategic research and financial plans for the institute, making final decisions on research standards and grant awards in California, ensuring the completion of an annual financial audit of the institute’s operations, issuing public reports on the activities of the institute, establishing policies regarding intellectual property rights arising from research funded by the institute, establishing rules and guidelines for the operation of the ICOC and its working groups, selecting members of the working groups, adopting, amending, and rescinding rules and regulations to carry out the purposes and provisions of the Cures Act and the Bond Act and to govern the procedures of the ICOC, requesting the issuance of bonds from the California Stem Cell Research and Cures Finance Committee and loans from the Pooled Money Investment Board (id., subds. (b)-(g), (i)-(n)), and “performing] all other acts necessary or appropriate in the exercise of its power, authority, and jurisdiction over the institute” (id., subd. (h)).
The Cures Act also provides for the creation of three scientific and medical working groups to advise the ICOC regarding research funding, accountability standards and facilities. Members of the working groups are appointed by a majority vote of a quorum of the ICOC. (§ 125290.50, subds. (a), (b).) Different qualifications are specified for membership in each of the working groups to ensure the appropriate expertise in each group. (§§ 125290.55, 125290.60, 125290.65.) The Cures Act also creates a “Citizen’s Financial Accountability Oversight Committee” to review the annual financial audit, the State Controller’s report and the financial practices of the institute. This committee is chaired by the State Controller and includes public members who “shall have medical backgrounds and knowledge of relevant financial matters” and who are appointed by the State Controller, State Treasurer, President Pro Tempore of the Senate, Speaker of the Assembly and chairperson of the ICOC. (§ 125290.30, subd. (c).)
Members of the ICOC and of the working groups are subject to conflict of interest rules, but the generally applicable Government Code provisions are qualified by standards set out in the Cures Act or authorized to be adopted by the ICOC for non-ICOC working group members. (§§ 125290.30, subd. (g), 125290.50, subd. (e); see also post, atpp. 1366-1367.) Meetings of the ICOC must be held in compliance with the Bagley-Keene Open Meeting Act (Gov. Code, § 11120 et seq.) and the award of all grants, loans and contracts, and the adoption of all standards must occur in public meetings. (§ 125290.30, subd. (d).) The California Public Records Act (Gov. Code, § 6250 et seq.) is, with certain exceptions, applicable to all records of the institute (§ 125290.30, subd. (e)). Except for grants and loans approved by the ICOC, all institute contracts must be entered in accordance with the competitive bidding requirements applicable to the University of California. (Pub. Contract Code, § 10500 et seq.) The mies and regulations that the ICOC adopts (other than interim regulations that were authorized for no more than 270 days) must be adopted in accordance with the Administrative Procedure Act (Gov. Code, § 11371 et seq.). (§ 125290.40, subd. (j).)
The Cures Act requires the ICOC to adopt standards applicable to all phases of its work, including “scientific and medical standards to carry out the specific controls and intent of the act” that shall govern the ICOC, its working committees and its grantees (§ 125290.35, subd. (a)), standards for obtaining the informed consent of research donors, patients or participants (id., subd. (b)(1)), standards for the review of research involving human subjects (id., subd. (b)(2)), standards prohibiting compensation to research donors or participants (id., subd. (b)(3)), standards to assure compliance with state and federal patient privacy laws (id., subd. (b)(4)), standards limiting payments for the purchase of stem cells or stem cell lines (id., subd. (b)(5)), and standards setting a limit on the time during which cells may be extracted from blastocysts (id., subd. (b)(6)). While the ICOC has been granted broad discretion in these areas, the Cures Act places numerous limitations on the exercise of that discretion. The medical and scientific standards, for example, must comply with section 125315, concerning the information and options that must be provided to fertility treatment patients (§ 125290.35, subd. (a)) and the standards concerning privacy must comply with state and federal privacy laws (id., subd. (b)(4)). Some of the standards must initially be generally based on standards of the National Institutes of Health, “with modifications to adapt to the mission and objectives of the institute.” (Id., subd. (b)(1), (2).) Other standards must comply with more specific criteria set out in the statute. (Id., subd. (b)(3), (5), (6).) As discussed more fully below (see post, at pp. 1363-1364 & fn. 28), the criteria that the Scientific and Medical Research Funding Working Group must use in evaluating grant and loan applications are specified in the statute (§ 125290.60, subd. (c)). The Act also provides guidelines and priorities for the appropriation and allocation of institute funding (§ 125290.70; see post, at p. 1357). In addition, the institute is subject to financial and public accountability provisions, including the requirements that the institute issue an annual public report of its activities that must contain specified information, and commission an annual independent financial audit that must be reviewed by the State Controller and by the Citizen’s Financial Accountability Oversight Committee. (§ 125290.30.)
The Bond Act contains the statutory authorization and framework for issuing bonds, obtaining interim financing, and managing funds for the operation of the institute. Under section 125291.30, “[b]onds in the total amount of three billion dollars ($3,000,000,000) ... or as much thereof as is necessary, may be issued and sold to provide a fund to be used for carrying out the purposes expressed in this article . . . .” The total amount of bonds that may be issued in a calendar year may not exceed $350,000,000, plus remaining permitted amounts from prior years. (§ 125291.45, subd. (b).) The California Stem Cell Research and Cures Finance Committee (Finance Committee), which is chaired by the State Treasurer and also includes the State Controller, Director of Finance, the CIRM chairperson and two additional ICOC members, is created “[s]olely for the purpose of authorizing the issuance and sale, pursuant to the State General Obligation Bond Law, of the bonds and interim debt authorized by this article . . . .” (§ 125291.40.)
B. The Litigation
On April 6, 2005, plaintiffs People’s Advocate and National Tax Limitation Foundation (collectively, People’s Advocate) filed an action in the Alameda County Superior Court against the ICOC and individual defendants Robert Klein, as chairperson and interim president of the ICOC, Arnold Schwarzenegger, as Governor of the State of California, Cruz Bustamante, as Lieutenant Governor, Phil Angelides, as Treasurer, and Steve Westley as Controller. The action seeks a declaratory judgment that the statutory components of Proposition 71 violate article XVI, section 3 of the California Constitution, which prohibits the state from disbursing state funds to entities not under the exclusive management and control of the state. People’s Advocate asserts that the ICOC, which is empowered to disburse state funds through research grants and loans, is a private entity not under the exclusive management and control of the state. The statute, the complaint alleges, “delegates the disbursal of huge sums of public money to the unfettered discretion of an institution whose governing board and working groups are unaccountable to the public.”
On July 8, 2005, after the Finance Committee had authorized $3 billion in general obligation bonds, plaintiff California Family Bioethics Council, LLC (the Council), filed a complaint in the Sacramento County Superior Court against the institute, the Finance Committee and “all persons interested in the matter of the legality of Proposition 71 and validity of actions, bonds and financing of CIRM.” This reverse validation action under Code of Civil Procedure section 863 challenges the constitutionality of Proposition 71 and the validity of the proposed state general obligation bonds. The Council contends that Proposition 71 violates the single-subject rule; that “Proposition 71 violated electoral due process by concealing from the voters the true scope and meaning of the initiative and its true costs”; and that conflicts of interest inherent in the Cures Act “violate fundamental principles of representative government, public policy and constitutional due process of law, represent an unconstitutional award of privileges and immunities to the ICOC members and their institutions, and violate existing conflicts of interest statutes and the common law.” The Council also made the contention advanced by People’s Advocate that the statutory provisions violate article XVI, section 3 of the California Constitution.
On August 4, 2005, the Alameda County Superior Court transferred the Council’s action to Alameda County and consolidated it with the action filed by People’s Advocate. The consolidated cases were tried before the court in February and March of 2006. The court received extensive documentary evidence, pre- and posttrial briefs from all parties, and the testimony of four witnesses. On May 12, the court issued a thorough statement of decision and entered judgment in favor of defendants, finding that “plaintiffs failed to show that Proposition 71, the California Stem Cell Research and Cures Initiative, is clearly, positively and unmistakably unconstitutional; that Proposition 71 and the bonds issued thereunder are valid; and that plaintiffs did not meet their burden to obtain any of the declaratory and injunctive relief sought in their complaints.” People’s Advocate and the Council filed timely notices of appeal.
Discussion
Between the two appeals, appellants challenge both the validity of the initiative process by which Proposition 71 was adopted, and the substantive validity of the provisions that were thereby enacted. Appellants disclaim any intention to question “the merits or faults of stem cell research” and we too shall avoid such considerations. (See Amador Valley Joint Union High Sch. Dist. v. State Bd. of Equalization (1978) 22 Cal.3d 208, 219 [149 Cal.Rptr. 239, 583 P.2d 1281] (Amador) [“We do not consider or weigh the economic or social wisdom or general propriety of the initiative. Rather, our sole function is to evaluate [it] legally in light of established constitutional standards.”].) After briefly reviewing the applicable standard of review, we shall consider first whether Proposition 71 violated the so-called single-subject rule and whether the ballot materials that accompanied the proposition were misleading and invalidated the results of the election. We shall then turn to the several reasons for which appellants contend that the statutory components of the measure violate either the California Constitution or other provisions of law. Finally, we shall consider appellants’ objections to the exclusion of certain evidence at trial.
A. Standard of Review
People’s Advocate seeks a declaration that the Cures Act is unconstitutional and an order enjoining “efforts to organize or operate the ICOC” and prohibiting the named defendants “from spending or releasing any public funds for any purpose connected with or relating to, the ICOC.” It also seeks to enjoin these defendants “from issuing, or causing to be issued, any bonds” under the Bond Act. The Council similarly seeks a declaration that Proposition 71 is unlawful and an order enjoining its enforcement.
Appellants’ challenges to the validity of the proposition and to the statutes enacted by the proposition present questions of law that are reviewed de novo. (CART, supra, 109 Cal.App.4th at p. 807.) “This reviewing court therefore exercises its independent judgment, without deference to the trial court’s ruling. [Citation.] [f] We are guided by established principles for evaluating the constitutionality of initiative measures. We do not consider or weigh the economic or social wisdom or general propriety of the initiative, but rather evaluate its constitutionality in the context of established constitutional standards. [Citation.] [][] ‘Although the legislative power under our state Constitution is vested in the Legislature, “the people reserve to themselves the powers of initiative and referendum.” [Citation.] Accordingly, the initiative power must be liberally construed to promote the democratic process. [Citation.] Indeed, it is our solemn duty to jealously guard the precious initiative power, and to resolve any reasonable doubts in favor of its exercise. [Citation.] As with statutes adopted by the Legislature, all presumptions favor the validity of initiative measures and mere doubts as to validity are insufficient; such measures must be upheld unless their unconstitutionality clearly, positively, and unmistakably appears.’ ” (Id. at pp. 807-808, italics omitted.)
The Council asserts that it is challenging Proposition 71 both facially and “as applied.” “A facial challenge to the constitutional validity of a statute or ordinance considers only the text of the measure itself, not its application to the particular circumstances of an individual. [Citation.] ' “To support a determination of facial unconstitutionality, voiding the statute as a whole, petitioners cannot prevail by suggesting that in some future hypothetical situation constitutional problems may possibly arise as to the particular application of the statute .... Rather, petitioners must demonstrate that the act’s provisions inevitably pose a present total and fatal conflict with applicable constitutional prohibitions.” ’ ” (Tobe v. City of Santa Ana (1995) 9 Cal.4th 1069, 1084 [40 Cal.Rptr.2d 402, 892 P.2d 1145], italics omitted.)
An “as applied” challenge seeks “relief from a specific application of a facially valid statute ... to an individual or class of individuals” or seeks to enjoin the “future application of the statute ... in the allegedly impermissible manner it is shown to have been applied in the past.” (Tobe v. City of Santa Ana, supra, 9 Cal.4th at p. 1084.) The result of a successful as-applied challenge to a particular statute is not the invalidation of the statute as a whole, but rather an order enjoining specific unlawful application of the statute. (Id. at pp. 1084-1086.) In general, a complaint that seeks to “enjoin any application of the ordinance to any person in any circumstance” constitutes a facial attack on the statute. (Id. at p. 1087.) Here, the Council challenges the validity of the entire proposition and People’s Advocate challenges the validity of the Cures Act. Neither complaint identifies a specific application of any provision that it seeks to enjoin. Accordingly, as the trial court concluded, both complaints should be considered as presenting facial challenges, either to the proposition or to the included Act.
Insofar as the trial court considered evidence with regard to the implementation of Proposition 71, including evidence of appointees’ qualifications and the process by which training grants were awarded, that evidence will be considered as providing context for the analysis of the challenged statutory provisions. To the extent that the trial court made findings that the Cures Act has thus far been implemented in conformity with the statute, those findings are subject to substantial evidence review. (See Board of Administration v. Wilson (1997) 52 Cal.App.4th 1109, 1127-1129 [61 Cal.Rptr.2d 207]; City and County of San Francisco v. Sainez (2000) 77 Cal.App.4th 1302, 1313 [92 Cal.Rptr.2d 418].) However, appellants do not challenge the sufficiency of the evidence to support the findings and have not requested any form of relief short of invalidating either the entire proposition or the Cures Act. Therefore, the primary focus of this court’s review remains the facial validity of these measures.
B. The Adoption of Proposition 71
1. The Single-subject Rule
The Council first argues that the proposition is invalid because it was enacted by a ballot measure that did not comply with the provision of the California Constitution limiting initiatives to a single subject matter. “An initiative measure embracing more than one subject may not be submitted to the electors or have any effect.” (Cal. Const., art. II, § 8, subd. (d).) This single-subject rule is designed “to avoid confusion of either voters or petition signers and to prevent subversion of the electorate’s will.” (Senate of the State of Cal. v. Jones (1999) 21 Cal.4th 1142, 1156 [90 Cal.Rptr.2d 810, 988 P.2d 1089] (Jones); see CART, supra, 109 Cal.App.4th at p. 809.) “ ' “ ‘[A]n initiative measure does not violate the single-subject requirement if, despite its varied collateral effects, all of its parts are “reasonably germane” to each other,’ and to the general purpose or object of the initiative.” ’ [Citation.] As we recently have explained, ‘the single-subject provision does not require that each of the provisions of a measure effectively interlock in a functional relationship. [Citation.] It is enough that the various provisions are reasonably related to a common theme or purpose.’ [Citation.] Accordingly, we have upheld initiative measures ‘ “which fairly disclose a reasonable and common sense relationship among their various components in furtherance of a common purpose.” ’ ” (Jones, supra, 21 Cal.4th at p. 1157, italics omitted.)
“[T]he initiative process occupies an important and favored status in the California constitutional scheme and ... the single-subject requirement should not be interpreted in an unduly narrow or restrictive fashion that would preclude the use of the initiative process to accomplish comprehensive, broad-based reform in a particular area of public concern.” (Jones, supra, 21 Cal.4th at p. 1157.) In evaluating a single-subject challenge to a measure the court should not attempt “to predict whether each section actually will further the initiative’s purpose. Instead, we inquire only whether the provisions are ‘reasonably germane’ to the general purpose or objective of the initiative.” (Calfarm Ins. Co. v. Deukmejian (1989) 48 Cal.3d 805, 841-842 [258 Cal.Rptr. 161, 771 P.2d 1247].)
The Council relies heavily on two Court of Appeal decisions that held initiative measures violated the single-subject rule: California Trial Lawyers Assn. v. Eu (1988) 200 Cal.App.3d 351 [245 Cal.Rptr. 916] (CTLA) and Chemical Specialties Manufacturers Assn., Inc. v. Deukmejian (1991) 227 Cal.App.3d 663 [278 Cal.Rptr. 128] (Chemical). In CTLA the court addressed a ballot measure that was predominately aimed at controlling the cost of insurance. One provision of the measure, however, would have protected insurance companies from laws regulating campaign contributions. The Court of Appeal held that the inclusion of this provision ran afoul of the single-subject rule. “First, the express purpose of the initiative is to control the cost of insurance, not generally to regulate the practices of the insurance industry. Second, we cannot accept the implied premise of [the insurers’] analysis, i.e., that any two provisions, no matter how functionally unrelated, nevertheless comply with the constitution’s single-subject requirement so long as they have in common an effect on any aspect of the business of insurance. Contemporary society is structured in such a way that the need for and provision of insurance against hazards and losses pervades virtually every aspect of life. [The insurers’] approach would permit the joining of enactments so disparate as to render the constitutional single-subject limitation nugatory.” (CTLA, supra, at p. 360.) The court also took issue with the fact that the provision regarding campaign contributions was “located . . . near the middle of a 120 page document, and consists of two brief paragraphs which bear no connection to what precedes or follows,” calling it “a paradigm of the potentially deceptive combinations of unrelated provisions at which the constitutional limitation on the scope of initiatives is aimed.” (Ibid.)
In Chemical, the ballot measure was directed at public disclosure of information concerning household toxic products, seniors’ health insurance, nursing homes, statewide initiative or referendum campaigns, and sales of stock or securities for corporations doing business with South Africa. The Court of Appeal rejected the contention that the measure was aimed at “providing the public with accurate information in advertising,” finding this articulation of the subject matter to be “so broad that a virtually unlimited array of provisions could be considered germane thereto and joined in this proposition, essentially obliterating the constitutional requirement, [f] In actuality, the measure seeks to reduce toxic pollution, protect seniors from fraud and deceit in the issuance of insurance policies, raise the health and safety standards in nursing homes, preserve the integrity of the election process, and fight apartheid; well-intentioned objectives but not reasonably related to one another for purposes of the single-subject rule.” (Chemical, supra, 227 Cal.App.3d at p. 671.)
The Council argues that “Proposition 71 violates the single-subject rule by authorizing not only stem cell research but also (a) authorizing research and regulation concerning unspecified ‘other vital research opportunities,’ (b) revising conflicts of interest laws and legislating conflicts of interest exemptions, and (c) granting exclusive, executive, financial and regulatory powers beyond the scope of stem cell research.” In rejecting this contention, the trial court correctly observed, “The over-arching subject of Proposition 71 is stem cell research and funding. The initiative’s purpose and intent includes funding stem cell research; setting standards for such research; and reducing the long-term health care cost in California through the development of therapies that treat diseases with the ultimate goal to cure them. In addition, the initiative’s intent is to benefit the California economy by creating jobs and advancing the biotech industry through such research. The ICOC oversees the research, with representatives of [the University of California] and other California universities with medical research institutions, disease advocacy groups, and experts in the development of medical therapies.” The trial court concluded that “the subjects [the Council] argues violate the single subject rule are reasonably interrelated and do not violate the rule,” aptly citing Amador, supra, 22 Cal.3d at page 231.
Turning to the specific reasons for which the Council asserts that Proposition 71 covers more than one subject matter, the Council first points to the provision authorizing the institute to “make grants and loans for stem cell research, for research facilities, and for other vital research opportunities to realize therapies, protocols, and/or medical procedures that will result in, as speedily as possible, the cure for, and/or substantial mitigation of, major diseases, injuries, and orphan diseases.” (Cal. Const., art. XXXV, § 2, italics added.) The Council argues that by allowing for broadly defined “other vital research,” the Cures Act covers not only stem cell research but other research that is not aimed at regenerative technologies.
The trial court concluded that funding “other vital research opportunities” is “germane and related to the other provisions of the [Cures] Act in that it is limited to funding only those opportunities ‘that will result in’ the types of cures sought by the Act.” (Quoting Cal. Const., art. XXXV, § 2, subd. (a).) The Council argues that this analysis impermissibly redefines the subject of Proposition 71 in general terms of scientific or medical research, rather than its professed subject of stem cell research. However, we agree with the Attorney General that the terminology in the measure to which the Council refers does not permit research “over anything and everything that the ICOC decides may ‘advance medical science.’ ” The measure is plainly directed to research for which “the federal government is not providing adequate funding necessary for the urgent research and facilities needed to develop stem cell therapies to treat and cure diseases and serious injuries.” (Prop. 71, § 2.) In order to ensure that institute funding does not duplicate or supplant existing funding, “a high priority shall be placed on funding pluripotent stem cell and progenitor cell research that cannot, or is unlikely to, receive timely or sufficient federal funding, unencumbered by limitations that would impede the research. In this regard, other research categories funded by the National Institutes of Health shall not be funded by the institute.” (§ 125290.60, subd. (c)(1)(C).) Other “vital research opportunities” are sanctioned, as the definition of that phrase clarifies (see fn. 16, ante), to permit the ICOC nonetheless to authorize, upon approval of a supermajority of the Scientific and Medical Research Funding Working Group, research that may also be federally funded if within the stated purposes of the initiative.
Research into stem cell therapy is in its infancy. As the understanding of the biology and biochemistry of stem cells expands it is to be expected that research will draw upon and overlap with studies in related fields of medicine, science, and technology. The authors of Proposition 71 understandably did not wish to create artificial barriers and limitations to the research that can be pursued in developing treatments and cures arising from the stem cell research. Research into related fields of medicine, science, and technology that will increase the understanding and facilitate the use of stem cell therapies quite clearly is both functionally related and reasonably germane to the stem cell research itself, whether or not additional federal funding becomes available. Far from creating a scattered and varied agenda united only by a vague and broad generalization, as was the measure in Chemical, supra, 227 Cal.App.3d 663, Proposition 71 authorizes research that is as specific as the circumstances permit and is reasonably limited to a single subject.
Moreover, the findings and declarations that appear in the opening provisions of Proposition 71 state that the Cures Act “will close [the federal] funding gap by establishing an institute which will issue bonds to support stem cell research, emphasizing pluripotent stem cell and progenitor cell research and other vital medical technologies, for the development of lifesaving regenerative medical treatments and cures.” (Prop. 71, § 2, italics added.) The analysis by the Legislative Analyst included in the November 2, 2004 Voter Information Guide explained, under the heading “How Funding Would Be Spent,” that “[p]riority for research grant funding would be given to stem cell research that met the institute’s criteria and was unlikely to receive federal funding. In some cases, funding could also be provided for other types of research that were determined to cure or provide new types of treatment of diseases and injuries.” (Italics added.) Rather than being hidden from the eye of the average voter, as was the objectionable provision in CTLA, supra, 200 Cal.App.3d 351, the inclusion of research into related medical technologies was explicitly addressed in the summary presented to the voters. This disclosure “dilute[s] the risk of voter confusion or deception,” one fundamental purpose of the single-subject rule, and further militates in support of the validity of the measure. (Amador, supra, 22 Cal.3d at p. 231; see Shea Homes Limited Partnership v. County of Alameda (2003) 110 Cal.App.4th 1246, 1257 [2 Cal.Rptr.3d 739].)
The Council next argues that the provisions added to the Health and Safety Code by Proposition 71 run afoul of the single-subject rule because the Cures Act “revises the application of conflicts of interest laws and specifically seeks to exempt the members of the ICOC from their conflicts of interest.” The manner in which the Act qualifies and clarifies conflict of interest restrictions for members of the ICOC is described, post, at pages 1366 to 1367. As indicated above, the Act also imposes rigorous qualifications for those who may serve on the ICOC and its working groups. The obvious intent is to require that those responsible for participating in the decisionmaking process and allocating research funds be knowledgeable in the applicable fields of science and medicine. Given the objective of delegating to persons knowledgeable in the relevant fields the advisory and decisionmaking responsibilities for the highly technical work of the institute, and the demanding qualifications for membership in the various arms of the institute, it is readily apparent why the conflict of interest provisions are both functionally related and reasonably germane to the single subject of the research authorized to be funded by Proposition 71. Persons qualified to serve in the various positions created by the measure are likely affiliated in some manner with institutions that directly or indirectly will oarticipate in or be affected by research underwritten by the institute. The need to adapt, or at least to clarify, conflict of interest rules that otherwise might disqualify or be perceived to disqualify many of the people on whose expertise the functioning of the institute will depend provides ample justification directly related to the objectives of the institute for the conflict provisions. Broadening the pool of qualified candidates from which the ICOC may draw unquestionably is functionally related to the single purpose of the stem cell research and cures initiative.
Again relying on CTLA, supra, 200 Cal.App.3d 351, the Council argues, “An insurance initiative that contained a single-sentence statutory exemption from only one conflicts of interest law violated the single-subject rule and was held unconstitutional . . . .” The court’s objection to the insurance measure in CTLA, however, was not the fact that the initiative contained a conflict waiver. The court objected to the fact that the conflict of interest provision was hidden in the middle of a lengthy initiative and dealt not with the regulation of insurance rates as the rest of the measure did, but with exempting insurers and others from laws regulating campaign contributions, a subject unrelated but for the fact that both pertained to insurance carriers. CTLA did not disturb the basic proposition that a measure does not violate the single-subject rule if its provisions are “either functionally related to one another or . . . reasonably germane to one another or the objects of the enactment” (Harbor v. Deukmejian (1987) 43 Cal.3d 1078, 1100 [240 Cal.Rptr. 569, 742 P.2d 1290]), as the conflict provisions in this measure plainly are.
Finally, the Council argues that the proposition “violates the single-subject rule by the extensive range of subjects over which the ICOC is granted exclusive state authority.” The Council points to the fact that provisions of the measure relate to the regulation of medical research, technical and funding standards, conflicts of interest, privacy rights of women and other related ethical questions, bond financing, and licensing of intellectual property rights. In particular, the Council quotes section 125290.35, subdivision (a), which provides, “In order to avoid duplication or conflicts in technical standards for scientific and medical research, with alternative state programs, the institute will develop its own scientific and medical standards to carry out the specific controls and intent of the act, notwithstanding subdivision (b) of section 125300, sections 125320, 125118, 125118.5, 125119, 125119.3 and 125119.5, or any other current or future state laws or regulations dealing with the study and research of pluripotent stem cells and/or progenitor cells, or other vital research opportunities, except Section 125315. The ICOC, its working committees, and its grantees shall be governed solely by the provisions of this act in the establishment of standards, the award of grants, and the conduct of grants awarded pursuant to this act.” (Italics added by the Council’s brief.)
As in the trial court, the Council fails to explain how or why these provisions violate the single-subject rule. On their face, all appear directly germane to the single research mission of the institute created by the proposition. Medical and ethical standards clearly are appropriate, if not indispensable, for this new and sensitive area of research, which has given rise to intense moral concerns among a portion of the public and has led to the federal restrictions that this measure seeks to overcome. Protecting the privacy rights of stem cell donors unquestionably is within the same purview. As just noted, particularized conflict of interest standards for those members of the medical and scientific community who will authorize and oversee the research projects are designed to advance the research mission of the institute. Bond financing is the means provided by the measure to raise the funds necessary to implement the institute’s mission. And appropriate licensing and regulation of the intellectual property that is anticipated from the work of the institute is similarly germane and functionally related to the conduct of the research. There is undoubtedly “ ‘ “a reasonable and common sense relationship among [the] various components in furtherance of a common purpose” ’ ” of all of the provisions that make up Proposition 71. (Jones, supra, 21 Cal.4th at p. 1157, italics omitted; see also Manduley v. Superior Court (2002) 27 Cal.4th 537, 576-579 [117 Cal.Rptr.2d 168, 41 P.3d 3] [initiative amending statutes regarding gang-related crime, sentencing of repeat offenders, and juvenile justice system did not violate single-subject requirement. Challenged provisions regarding repeat offenders bore “both a topical and a functional relationship to provisions regarding juvenile crime”].)
In short, as the trial court concluded, the Council “has not demonstrated that Proposition 71 violates the constitutional provision that an initiative must be limited to a single subject.”
2. The Proposition 71 Ballot Materials Were Not Misleading
The Council argues that “Proposition 71 contains material omissions and misrepresentations that caused its adoption in the November 2004 election to violate due process of law.” The Council contends that the analysis provided in the ballot materials by the Legislative Analyst was misleading because it misstated the interest costs on the bonds that were authorized, falsely promised new revenues from medical therapies to be developed, and failed to define the terms “somatic cell nuclear transfer,” “products of in vitro fertilization treatments,” and “cloning.” The Council also argues that the analysis “fails to explain that the initiative is establishing a state public agency whose members are being exempted from conflicts of interest laws.”
At the outset, the Council’s challenge must be distinguished from a preelection challenge based on violation of election laws. Except for challenges alleging misconduct rising to the level of a constitutional violation, “the court’s authority to invalidate an election is limited to the bases for contest specified in Elections Code section 16100 and that section is exclusive . . . .” (Friends of Sierra Madre v. City of Sierra Madre (2001) 25 Cal.4th 165, 192 [105 Cal.Rptr.2d 214, 19 P.3d 567] (Friends of Sierra Madre).) Quoting Horwath v. City of East Palo Alto (1989) 212 Cal.App.3d 766, 777 [261 Cal.Rptr. 108] (Horwath), the Council argues that the alleged flaws it identifies in the ballot materials rendered “the information provided to the voters . . . ‘inaccurate or misleading as to prevent the voters from making informed choices.’ ” The misleading information, the Council reasons, amounts to a denial of due process.
Horwath held that “Determination of how much process is due in a local, direct decisionmaking context—where the complained-of irregularities consist of omissions, inaccuracies or misleading statements in the ballot materials—will depend on whether the materials, in light of other circumstances of the election, were so inaccurate or misleading as to prevent the voters from making informed choices. In conducting this inquiry courts should examine the extent of preelection publicity, canvassing and other informational activities, as well as the substance or content of such efforts. The ready availability of the text of the ordinance, or the official dissemination and content of other related materials, such as arguments for or against the measure, will also bear on whether the statutory noncompliance rendered the election unfair. Finally, courts should take into account the materiality of the ommission [sic] or other informational deficiency. Flaws striking at the very nature and purpose of the legislation are more serious than other, more ancillary matters.” (Horwath, supra, 212 Cal.App.3d at pp. 777-778.)
In People ex rel. Kerr v. County of Orange (2003) 106 Cal.App.4th 914 [131 Cal.Rptr.2d 274] (Kerr) the court addressed a challenge to an election adopting a county charter, which was similar to the challenge made here. The plaintiffs argued that “the alleged deficiencies in the impartial analysis here are a violation of constitutional guarantees of due process. As they put it in their brief, the right to vote is ‘fundamental in a democratic society’ and the impartial analysis, ‘by conveying false and misleading information’ abridged that right by preventing ‘voters from making an informed decision ....’” (Id. at p. 933.) The court responded that “plaintiffs’ logic sweeps too broadly. Election losers frequently claim that their message ‘didn’t get out’ or that they were the victims of ‘false and misleading information.’ Simply as a matter of general principle, the idea that by ‘constitutionalizing’ deficiencies in voter summaries you can undo an election is really quite antithetical to the democratic process.” (Ibid.) The court concluded that the plaintiffs were attempting to circumvent the statutory requirement that challenges to an impartial analysis be brought before the election is held. “[T]he need to mount any challenges to an impartial analysis before an election takes place and not after it cannot be so easily sidestepped as plaintiffs here would have us imagine. A litigant cannot simply intone the words ‘due process’ and make the problem go away. Here, substantively, plaintiffs have really mounted only an election challenge, not a constitutional challenge (at least insofar as they attack the impartial analysis). [1] We need only add that in light of the fact that the Legislature has determined in the Election Code that an election cannot be undone on the basis of alleged deficiencies in an impartial analysis, trying to achieve the same result under the rubric of constitutional due process, as was unsuccessfully attempted in Horwath, requires a showing that the impartial analysis profoundly misled the electorate, not just that it didn’t educate the electorate as to all the legal nuances of the measure. We perceive in Friends of Sierra Madre and Horwath, when read together, that the bar is very high indeed for a litigant to successfully mount a postelection challenge to a ballot measure using a due process rationale based on defects in a county counsel’s impartial analysis.” (Id. at pp. 933-934, italics omitted.)
Like the plaintiffs in Kerr, the Council not only does not clear this bar, it “barely even get[s] off the ground.” (Kerr, supra, 106 Cal.App.4th at p. 934.) The Council first argues that the ballot materials represented that the interest costs for repayment of the bonds would be $3 billion, while “[i]n fact the State Treasurer estimates that the true cost of the interest on the Proposition 71 bonds will be an additional $423 million.” The Legislative Analyst’s summary predicted a “[sjtate cost of about $6 billion over 30 years to pay off both the principal ($3 billion) and interest ($3 billion) on the bonds.” The October 26, 2005 letter from the State Treasurer to the president of the CIRM, on which the Council relies, points out that the measure authorizes both taxable and tax-exempt bonds, which “gives the Institute the flexibility to design a research strategy to meet its objectives at the lowest cost to the taxpayers and in ways that comply with any federal restrictions on the use of tax-exempt bonds.” The letter explains that, although the state may not be able use tax-exempt bonds to finance research projects in which the state would benefit by receiving royalties from the fruits of the research, the matter is far from settled law and that the financing options should be further explored. The Treasurer further stated that in some circumstances it might be more beneficial to the state to use taxable bonds since the royalties could exceed the additional costs of these bonds. “My staff estimates that the interest rate difference between issuing taxable and tax-exempt 30-year general obligation bonds is currently about 0.75 percentage points. Even in the worst-case scenario—where, to obtain royalties, the State must sell only taxable bonds to fund the Institute’s entire research grant program—my staff estimates that the added interest cost to the State over the 30-year term of the bonds would be $423 million. By contrast, the economic study released by the Proposition 71 campaign last year estimated that the Institute could reasonably expect to receive as much as $1.1 billion in licensing fees and royalties over the next three decades. If that is the case, even the maximum use of taxable bonds would result in $677 million more in net revenues to the State and its taxpayers than if the Institute uses only tax-exempt financing and forgoes any royalties.”
The trial court concluded that there was “no evidence of misleading financial projections.” The trial court is correct. There is nothing in the Treasurer’s letter that contradicts the Legislative Analyst’s estimate. First, the Treasurer’s figure is based on the assumption that the state will sell only taxable bonds. The state may sell tax-free bonds, taxable bonds, or a combination of both. The Treasurer’s letter adeptly outlines the considerations for each option but does not establish that the state will pay more than was estimated in the ballot materials for the bonds. Moreover, the $3 billion figure provided in the ballot materials is explicitly an estimate, not a firm figure. The analysis states, “If the $3 billion in bonds authorized by this measure were repaid over a 30-year period at an average interest rate of 5.25 percent, the cost to the General Fund would be approximately $6 billion to pay off both the principal ($3 billion) and interest ($3 billion).” (Italics added.) This statement cannot reasonably be read to mean that this would be the exact cost of repayment, since interest rates fluctuate and the state might choose to sell bonds with a different term for repayment. The Council does not suggest that the state cannot exercise its right under the Cures Act to sell both tax-free and taxable bonds, which of course would change the cost of the bonds. The trial court was correct that the Treasurer’s “letter indicates that over the life of the bonds at issue the interest cost of taxable bonds would be $423 million more than the cost of tax-free bonds, but says nothing whatsoever about the Legislative Analyst’s projection of $3 billion in interest costs.”
The Council next argues that Proposition 71 falsely “represented to the voters that the initiative would ‘Protect and benefit the California budget. . . by funding scientific and medical research that will significantly reduce state health care costs in the future.’ ” (Italics in the Council’s brief.) The Council argues that this is misleading because “[tjhere is no way to know whether or not any Proposition 71 funded research will ever result in any revenues or any health care cost savings to the State.” The Council also complains that any royalty payments to the state from technology developed under the auspices of the institute are speculative. The trial court concluded that the statement to which the Council objects was not a promise but “is an aspiration on the part of the people of the state to ‘[p]rotect and benefit the state budget.’ ”
As the Attorney General observes, the ballot materials repeatedly stressed the speculative nature of any savings from research or earnings to the state from licensing royalties under the Cures Act. The summary of the Legislative Analyst’s estimate of fiscal impact, which appeared in the voter information guide before the full analysis, referred to “Unknown potential state and local revenue gains and cost savings to the extent that the research projects funded by this measure result in additional economic activity and reduced public health care costs.” In the fuller discussion of fiscal effects, under the heading “Other Potential Fiscal Effects,” the analysis stated: “If the measure were to result in economic or other benefits that would not otherwise have occurred, it could produce unknown indirect state and local revenue gains and cost savings. Such effects could result, for example, if the added research activity and associated investments due to the measure generate net gains in jobs and taxable income, or if funded projects reduce the costs of health care to government employees and recipients of state services. The likelihood and magnitude of these and other potential indirect fiscal effects are unknown.” (Italics added.) Such speculation, phrased in conditional language as this was, is not misleading, let alone misleading to the degree that would “prevent the voters from making informed choices.” (Horwath, supra, 212 Cal.App.3d at p. 777.)
The Council also argues that the analysis failed “to explain the meanings of critical scientific terms used but not defined in Proposition 71, ‘somatic cell nuclear transfer,’ ‘products of in vitro fertilization treatments’ and ‘cloning’ that is authorized under Proposition 71, as contrasted to ‘human reproductive cloning,’ which is banned . . . .” (Original italics.) In considering whether these omissions materially misled voters, the court considers not only the text of the measure and the analysis but also “the extent of preelection publicity, canvassing and other informational activities, as well as the substance or content of such efforts.” (Horwath, supra, 212 Cal.App.3d at p. 777.)
The court in Amador, supra, 22 Cal.3d 208, considered a similar challenge to a ballot summary by the Attorney General. The court noted “that the title and summary need not contain a complete catalogue or index of all of the measure’s provisions . . .” and that “[a]s a general mle, the title and summary prepared by the Attorney General are presumed accurate, and substantial compliance with the ‘chief purpose and points’ provision is sufficient.” (Amador, at p. 243.) In that case the plaintiffs complained that the title and summary omitted the fact that a two-thirds majority vote was required for local entities to impose the “special taxes” authorized by the measure. The court held that “[t]he summary’s omission of any reference to the two-thirds vote requirement was not critical for, as we noted above, the initiative measure was extensively publicized and debated, in all of its several aspects, and a corrected summary was contained in the voters pamphlet which was mailed to all voters. We repeat our observation of some time ago that we ordinarily should assume that the voters who approved a constitutional amendment ‘. . . have voted intelligently upon an amendment to their organic law, the whole text of which was supplied each of them prior to the election and which they must be assumed to have duly considered ....’” (Id. at pp. 243-244.)
To say that the issues surrounding Proposition 71 and the issues surrounding stem cell research generally were well aired prior to the election undoubtedly would be an understatement. Though many voters probably do not understand the science underlying somatic cell nuclear transfer, therapeutic cloning, and in vitro fertilization, they are not required to grasp the intricacies of this research frontier to intelligently decide whether to support a measure providing funding for such research. The ballot materials included a box entitled “Stem Cells and Stem Cell Research” that provided objective nontechnical answers to three questions: “What Are Stem Cells?,” “What are Embryonic and Adult Stem Cells?,” and “Why do Researchers Want to Study Stem Cells?” No more was required to permit voters to vote intelligently. (See Kerr, supra, 106 Cal.App.4th at p. 934 [unnecessary to “educate the electorate as to all the legal nuances of the measure”]; Elec. Code, § 9087 [analysis by Legislative Analyst “shall avoid the use of technical terms wherever possible”].)
Finally, the Council again broaches the subject of conflict of interest, arguing that voters were materially misled because the analysis “fails to explain that the initiative is establishing a state public agency whose members are being exempted from conflicts of interest laws.” However, without explicitly discussing the subject of conflicts of interest, the analysis of the Legislative Analyst in the ballot pamphlet pointed out that the ICOC would be “comprised of representatives of specified UC campuses, another public or private California university, nonprofit academic and medical research institutions, companies with expertise in developing medical therapies, and disease research advocacy groups.” Elections Code section 9087 provides that “The Legislative Analyst shall prepare an impartial analysis of the measure describing the measure and including a fiscal analysis of the measure showing the amount of any increase or decrease in revenue or cost to state or local government," that the analysis “be written in clear and concise terms, so as to be easily understood by the average voter . . .” and that it “generally set forth in an impartial manner the information the average voter needs to adequately understand the measure.” “The test is not whether the digest is complete, but rather whether it contains ‘a statement of the major objectives or “chief purposes and points” of the measure.’ [Citation.] It need not refer to ' “auxiliary or subsidiary” ’ matters, nor need it ‘ “contain a summary or index of all of the measure’s provisions. Moreover, ' “substantial compliance” is sufficient, and if reasonable minds may differ as to the sufficiency of the summary, it should be held sufficient.’ ’’ (Horneff, supra, 110 Cal.App.4th at p. 820, citation omitted, italics omitted.) As in Kerr and Horneff the impartial statement here set forth the major features of the proposition and substantially complied with the statutory requirements. For those voters seeking to ascertain all of the details of the measure, the voter information guide contains the complete text of the proposition. Requiring the Legislative Analyst to include every facet of a complex measure such as Proposition 71 would have the paradoxical effect of rendering the analysis nearly as impenetrable to the average voter as the text of the proposition itself.
In short, the Council attacks the analysis on grounds all of which were available prior to the election. Here, as in Kerr and the cases upon which it relies, the Council has “really mounted only an election challenge, not a constitutional challenge (at least insofar as they attack the impartial analysis).” (Kerr, supra, 106 Cal.App.4th at p. 934.) The ballot materials neither misled nor denied anyone due process nor do they provide any basis for invalidating Proposition 71.
C. The Content of Proposition 71
1. The Cures Act Does Not Violate the Constitutional Prohibition of Public Funding of Entities Outside of the State’s Exclusive Management and Control.
Article XVI, section 3 of the California Constitution provides: “No money shall ever be appropriated or drawn from the State Treasury for the purpose or benefit of any corporation, association, asylum, hospital, or any other institution not under the exclusive management and control of the State as a state institution . . . .” This constitutional prohibition was designed “to prevent the appropriation of the moneys of the state for any purpose other than that which pertains to the state.” (County of Sacramento v. Chambers (1917) 33 Cal.App. 142, 146 [164 P. 613].) However, it was “not intended to unduly restrict the state in the expenditure of public funds for legitimate state purposes.” (People v. Honig (1996) 48 Cal.App.4th 289, 352 [55 Cal.Rptr.2d 555].) “[A]rticle XVI, section 3 has been interpreted not to prohibit legislative authorization for some degree of autonomy in a government agency or innovation in the manner in which a government agency operates, but rather to prevent the appropriation of funds from the state fisc for a purpose foreign to the interests of the state and outside of its control.” (CART, supra, 109 Cal.App.4th at p. 816.)
As indicated above, CIRM is an entity created by the Constitution itself. In this respect it differs from the statutorily created entities that were the subject of scrutiny in CART, in Howard Jarvis Taxpayers’ Assn. v. Fresno Metropolitan Projects Authority (1995) 40 Cal.App.4th 1359 [48 Cal.Rptr.2d 269] (Jarvis), and in all of the cases that have considered the meaning of article XVI, section 3 of the California Constitution. People’s Advocate recognizes that CIRM is “a creature of the Constitution and established in state government.” It states unequivocally, “People’s Advocate makes no challenge to the constitutional legitimacy of the CIRM, nor its power to use bonds to fund its operations.” It contends, however, that “CIRM’s role is basically ministerial,” that the significant decisions to make grants and loans are made by the ICOC, and that the authority conferred by the Cures Act on the ICOC contravenes article XVI, section 3 because the ICOC is empowered to disburse state funds without being under the exclusive management and control of the state. But, as the trial court correctly observed, the ICOC “is not a discrete entity, separate and apart from CIRM, but rather its governing body.” The actions approved by the ICOC are the actions of CIRM. Thus, People’s Advocate is plainly wrong in arguing that “[t]o the extent that there is any state management and control over CIRM, it has no significance to the constitutional question raised here.”
Whether viewed as management and control over CIRM or over the ICOC, and without considering whether as a