October 5, 2021

California’s Board Gender Diversity Statute: Headed for Trial

Here’s the intro from this Allen Matkins blog:

California Superior Court Judge Maureen Duffy-Lewis issued her ruling on September 28th on the parties’ respective motions for summary judgment in Crest v. Padilla (Cal. Super. Ct. Case No. 19STCV27561). In this case, the plaintiffs are seeking a judgment declaring that any and all expenditures of taxpayer funds to enforce and carry out the provisions of California’s female director quota law (SB 826) are illegal. SB 826 is codified at Sections 301.3 and 2115.5 of the California Corporations Code.

The basis for the plaintiffs’ claim is Art. I, Section 31 of the California Constitution which forbids the state from discriminating against, or granting preferential treatment to, any individual or group on the basis of race, sex, color, ethnicity, or national origin in the operation of public employment, public education, or public contracting.

Judge Duffy-Lewis denied both motions on the grounds that there are triable issues of material facts. While the fundamental question presented by the case appears to be legal, the ruling notes that each side provided with their moving papers “substantial amounts of extrinsic evidence” and that each side disputed facts presented by the other.

As this Cooley blog reports, Crest v. Padilla was the first complaint filed against California’s board gender diversity law, back in 2019. It’s framed as a “taxpayer suit.” There are several pending challenges to SB 826, as well as AB 979, which is the California statute that requires representation on boards from underrepresented communities.

Liz Dunshee