As the trial of of the constitutionality of SB 826, California's female director quota, law continues, the question of the plaintiffs' standing remains in contention.  As I reported in June of last year, Judge Maureen Duffy-Lewis previously overruled the Secretary of State's demurrer, finding that the plaintiffs had adequately pled taxpayer standing under Section 526a of the Code of Civil Procedure.  Now, the plaintiffs must do more than plead standing, they must prove that they have standing. 

Both the plaintiffs and the Secretary of State agree in their pretrial briefs that to establish taxpayer standing, the plaintiffs must show, among other things, a threatened or actual illegal expenditure by the state.  The Secretary of State argues that the plaintiffs cannot make this showing because expenditures to date have been "limited to monitoring, reporting, and information sharing, all of which are legal".   

Section 301.3 imposes a fine of $100,000 for the first violation and $300,000 for subsequent violations.  The statute further empowers the Secretary of State to impose fines.  Cal. Corp. Code § 301.3(e).  The Secretary of State characterizes these as "potential fines".   But what is a threat, but a suggestion that something (usually bad) might occur?  Further, is not the monitoring of compliance a step towards the potential enforcement?  When the legislature mandates conduct, prescribes fines, and empowers a state official to impose those fines, it strains credulity to characterize those actions as anything but a "threat".

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