Superior Court Judge Maureen Duffy-Lewis said the law that would have required boards to have up to three female directors by this year violated the right to equal treatment.
The conservative legal group Judicial Watch had challenged the law, claiming it was illegal to use taxpayer funds to enforce a law that violates the equal protection clause of the California Constitution by mandating a gender-based quota.
California’s then-governor Jerry Brown said he signed the bill to send a message during the #MeToo era.
In the three years it has been on the books, it has been credited with improving the standing of women in corporate boardrooms.
The state defended the law as constitutional saying it was necessary to reverse a culture of discrimination that favoured men and was put in place only after other measures failed.
The state also said the law did not create a quota because boards could add seats for female directors without stripping men of their positions.
Although the law carried potential hefty penalties for failing to file an annual report or comply with the law, a chief in the secretary of state’s office acknowledged during the trial that it was toothless.
No fines have ever been levied and there was no intention to do so, Betsy Bogart testified. Further, a letter that surfaced during trial from former secretary of state Alex Padilla warned Mr Brown weeks before he signed the law that it was probably unenforceable.
“Any attempt by the secretary of state to collect or enforce the fine would likely exceed its authority,” Mr Padilla wrote.
The law required publicly held companies headquartered in California to have one member who identifies as a woman on their boards of directors by the end of 2019.
By January 2022, boards with five directors were required to have two women and boards with six or more members were required to have three women.