Meland v. Weber
2:19-cv-02288
E.D. Cal.Dec 27, 2021Background:
- California SB 826 (2018) requires publicly held corporations headquartered in California to have at least one female director by end of 2019, with higher minimums for larger boards by the end of 2021; Secretary of State may impose fines for violations.
- Plaintiff Creighton Meland, an OSI Systems shareholder, sued claiming SB 826’s gender-based board requirements violate the Equal Protection Clause by impairing shareholder voting rights; he moved for a preliminary injunction.
- The district court previously dismissed for lack of standing; the Ninth Circuit reversed, finding Meland plausibly alleged SB 826 “requires or encourages” him to discriminate on the basis of sex, and remanded.
- On remand the court considered voluminous filings, struck materials raising a new standing theory (running for the board), and found Meland still has standing under the Ninth Circuit’s rationale.
- Applying Winter’s four-factor test, the court focused on likelihood of success on the merits, applied intermediate scrutiny to SB 826, and concluded the State demonstrated an important remedial interest and a substantial relationship between SB 826 and that interest.
- The court denied the preliminary injunction, noting it need not reach the other Winter factors once likelihood of success was not shown and observing public-interest harms from withholding opportunities the law produced.
Issues:
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Meland has standing | Meland argued SB 826 injures his voting rights by forcing sex-based choices | Weber argued evidence shows Meland’s vote cannot affect outcomes and thus no injury | Court followed Ninth Circuit: Meland has standing because SB 826 "requires or encourages" sex-based voting |
| Proper standard of review for sex-based classification | Meland: law is a sex-based quota requiring heightened scrutiny and likely unconstitutional | Weber: Sex-based classification subject to intermediate scrutiny; State can justify remedying discrimination | Court applied intermediate scrutiny (sex-based classification) |
| Whether SB 826 is supported by an important government interest | Meland: legislature lacked sufficient evidence of discrimination; diversity rationale not applicable | Weber: legislature presented legislative history, statistics, experts showing discrimination and remedial need; diversity benefits also argued | Court held remedying past discrimination is an important interest and the record supports it; declined to extend Grutter diversity rationale to corporate boards |
| Whether SB 826 is substantially related to that interest | Meland: numerical requirements arbitrary, rigid/quotas, overbroad, no sunset | Weber: numbers supported by research (critical mass), seats can be added (not fixed quota), program is substantially related | Court held SB 826 is substantially related under intermediate scrutiny; rejected plaintiff’s per se quota and overbreadth arguments |
Key Cases Cited
- Winter v. Nat. Res. Def. Council, 555 U.S. 7 (2008) (four-factor preliminary injunction standard)
- Associated Gen. Contractors of Cal. v. City & County of San Francisco, 813 F.2d 922 (9th Cir. 1987) (upholding gender-conscious remedial program under intermediate scrutiny)
- Coral Constr. Co. v. King County, 941 F.2d 910 (9th Cir. 1991) (intermediate scrutiny for gender-based programs; government need not show prior active involvement in discrimination)
- Grutter v. Bollinger, 539 U.S. 306 (2003) (recognition of diversity rationale in higher education context)
- Parents Involved in Cmty. Schs. v. Seattle Sch. Dist. No. 1, 551 U.S. 701 (2007) (refusal to extend Grutter diversity rationale to K–12 context)
- Mississippi Univ. for Women v. Hogan, 458 U.S. 718 (1982) (sex-based classifications subject to intermediate scrutiny)
- Monterey Mechanical Co. v. Wilson, 125 F.3d 702 (9th Cir. 1997) (state burden to justify sex-based classifications)
- Regents of Univ. of Cal. v. Bakke, 438 U.S. 265 (1978) (discussion of quotas and set-asides in equal protection context)
- Richmond v. J.A. Croson Co., 488 U.S. 469 (1989) (strict scrutiny for race-based quotas; characterization of quota programs)
- Garcia v. Google, Inc., 786 F.3d 733 (9th Cir. 2015) (where likelihood of success on merits is lacking, court need not reach other preliminary injunction factors)