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California Judge Strikes Down Law Forcing Companies To Appoint Women To Corporate Boards

Tyler Durden's Photo
by Tyler Durden
Tuesday, May 17, 2022 - 11:23 AM

Authored by Matthew Vadum via The Epoch Times,

California judge struck down as unconstitutional the state’s law forcing publicly held corporations headquartered in California to meet a quota of board members who self-identify as women or face fines.

Los Angeles County-based California Superior Court Judge Maureen Duffy-Lewis ruled (pdf) May 13 in Crest v. Padilla that the state law known as SB 826 that compelled corporate boards to seat up to three female-identifying directors ran afoul of the constitutional right to equal treatment.

The goal of SB 826 “was to achieve general equity or parity; its goal was not to boost California’s economy, not to improve opportunities for women in the workplace nor not to protect California taxpayers, public employees, pensions and retirees,” the judge wrote.

“Putting more women on boards demonstrated that the Legislature’s actual purpose was gender-balancing, not remedying discrimination,” Duffy-Lewis wrote.

“There is no compelling governmental interest in remedying discrimination in the board selection process because neither the Legislature nor Defendant could identify any specific, purposeful, intentional and unlawful discrimination to be remedied,” she wrote.

Tom Fitton, president of good-government group Judicial Watch, which represented the plaintiffs in court, welcomed the decision by Duffy-Lewis.

“The Court eviscerated California’s unconstitutional gender quota mandate,” Fitton said in a statement.

“Thankfully, California courts have upheld the core American value of equal protection under the law.”

Fitton noted that this was the second recent California court decision finding that quotas for corporate boards are unconstitutional.

In that case, also cited as Crest v. Padilla, Los Angeles County-based California Superior Court Judge Terry A. Green ruled (pdf) April 1 that the law “violates the Equal Protection Clause of the California Constitution on its face.”

“The statute treats similarly situated individuals—qualified potential corporate board members—differently based on their membership (or lack thereof) in certain listed racial, sexual orientation, and gender identity groups. It requires that a certain specific number of board seats be reserved for members of the groups on the list—and necessarily excludes members of other groups from those seats,” Green wrote.

California Secretary of State Shirley Weber, who was defending the law in court, “has not identified a compelling interest to justify this classification,” the judge added.

‘Racial Justice’

Sacramento-based Pacific Legal Foundation (PLF), a public interest law firm, is also pursuing similar litigation in federal court in California.

Its lawsuit, National Center for Public Policy Research (NCPPR) v. Weber, was filed on Nov. 22, 2021, in the U.S. District Court for the Eastern District of California.

The NCPPR, a pro-free market research and shareholder advocacy organization, argues that another law, AB 979, perpetuates discrimination by treating people based on their immutable characteristics, and not as individuals.

AB 979 requires the affected corporations to meet an additional quota for board members based on race and sexual orientation. When signing AB 979 into law on Sept. 30, 2020, California Gov. Gavin Newsom, a Democrat, said he did so to advance “racial justice.”

PLF client and shareholder activist Creighton Meland is challenging SB 826 in federal court. The state tried to have the case dismissed but the U.S. Court of Appeals for the 9th Circuit unanimously determined that a shareholder of a California company has standing to sue over the law. The case is ongoing.

PLF attorney Daniel Ortner said Judicial Watch’s victory over SB 826 bodes well for his firm’s clients’ lawsuits.

“I am optimistic,” Ortner told The Epoch Times.

“The rationales California are offering don’t hold up, ultimately. The evidence they have doesn’t justify the use of sex quotas.”

“We’re going to keep moving forward,” Ortner said.

“Really, we were hoping to set a federal precedent because that’ll dissuade other states from following suit,” the attorney continued.

“It’s been our goal from the start to get a federal judge to say that these laws violate the federal Constitution so that other states are not following California’s lead.”

The Epoch Times has reached out to Weber for comment.

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