July 2, 2022

Volume XII, Number 183

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The Verdict Is In On California's Female Director Quota Law

As I noted yesterday, Los Angeles Superior Court Judge Maureen Duffy-Lewis has found California's female director quota law, SB 826, to violate the Equal Protection clause of the California Constitution (A person may not be . . . denied equal protection of the law").  Crest v. Padilla, L.A. Super. Ct. Case No. 19STCV27561 (March 13, 2022).  Judge Duffy-Lewis issued her verdict following a lengthy trial.  Here are some highlights of the verdict:

  • The plaintiffs met their burden to prove that men and women are similarly situated for purposes of SB 826, thereby shifting the burden to the defendant to show:

    • A compelling state interest;

    • SB 826 is necessary; and

    • SB 826 is narrowly tailored.

  • There is no compelling governmental interest in remedying either societal discrimination or generalized non-specific allegations (citing Connerly v. State Personnel Board, 92 Cal. App. 4th 16 (2001).

  • The defendant failed to sufficiently prove that SB 826's use of gender-based classification was necessary to boost California's economy, improve opportunities for women in the workplace, and protect California taxpayers, public employees, pensions, and retirees.

  • The defendant failed to show that the legislature considered gender-neutral alternatives to remedy specific, purposeful or intentional, unlawful discrimination against women by private sector corporations in the selection of board members or that gender-neutral alternatives were not available.

Because Judge Duffy-Lewis found SB 826 violated the California Constitution's equal protection clause, she did not make a decision on whether the law also violated the California Constitution's prohibition on discrimination based on sex in public employment, or contracting (Cal. Const. Art. I, § 31).  

While many may be disappointed by Judge Duffy-Lewis' verdict, it should be no surprise.  As Governor Jerry Brown stated in his signing message: "There have been numerous objections to this bill and serious legal concerns have been raised. I don't minimize the potential flaws that indeed may prove fatal to its ultimate implementation".

© 2010-2022 Allen Matkins Leck Gamble Mallory & Natsis LLP National Law Review, Volume XII, Number 137
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About this Author

Keith Paul Bishop, Corporate Transactions Lawyer, finance securities attorney, Allen Matkins Law Firm
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Keith Bishop works with privately held and publicly traded companies on federal and state corporate and securities transactions, compliance, and governance matters. He is highly-regarded for his in-depth knowledge of the distinctive corporate and regulatory requirements faced by corporations in the state of California.

While many law firms have a great deal of expertise in federal or Delaware corporate law, Keith’s specific focus on California corporate and securities law is uncommon. A former California state regulator of securities and financial institutions, Keith has decades of...

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