According to a copy of the verdict, Judge Maureen Duffy-Lewis of the Superior Court of California in Los Angeles ruled that the 2018 law was unconstitutional because it violated the state constitution's equal protection clause.
California law requires public companies with headquarters in the state to have at least two or three women on their boards by 2021, depending on board size. Those who did not comply faced financial penalties.
Judicial Watch, a conservative legal organization, filed the lawsuit on behalf of three California residents. The case was defended by the state attorney general's office, and the two sides squared off in front of Judge Duffy-Lewis for the nonjury trial, which concluded in February.
In her 23-page verdict, Judge Duffy-Lewis stated, "The plaintiff's evidence is compelling." She rejected the state's claim that the lawsuit was filed too soon because the government had not imposed penalties or threatened prosecution.
The judge agreed with the plaintiffs that the law discriminates against similar board candidates based on gender, but left it up to the state to show that the law serves a compelling public interest, is necessary, and is narrowly tailored. She wrote, "Defendant has not met its burden."
Judicial Watch's spokesman said the organization had no immediate comment because it hadn't yet seen the decision.
The office of California Secretary of State Shirley Weber could not be reached for comment immediately.
Another judge in the same state court overturned a law last month that required public companies in California to have at least one director who is racially, ethnically, or otherwise diverse by 2021. Judge Terry Green stated that the law improperly mandated heterogeneous boards and that individuals' rights to equal treatment must be protected. Judicial Watch also supported the lawsuit.
Advocates for board diversity mandates argue that they are sometimes the most effective way to significantly increase representation among key corporate decision makers.
Companies have increased the number of women on their boards in recent years, whether mandated or not.
According to corporate-leadership data provider Equilar, nearly 86 percent of California-based publicly traded companies had two or more women on their boards by the end of 2021, while 1 percent had no women on their boards.
According to Spencer Stuart's annual report on corporate boards, every board of S&P 500 companies had at least one female director, and 96 percent had two or more, up from 58 percent a decade earlier.
Companies have generally increased board gender diversity by filling vacancies or adding additional seats. According to Spencer Stuart, women made up 43 percent of new non-employee directors last year. Women made up roughly 30% of the S&P 500 board of directors.