On June 21, 2021, the Court of Appeals for the Ninth Circuit ruled a shareholder-plaintiff had standing to sue California’s Secretary of State. Creighton Meland, a shareholder at OSI Systems, Inc., sued alleging that Senate Bill 826, which was signed into law in 2018, violates the Fourteenth Amendment because it requires corporations to elect a sliding scale quota of women to corporate board member seats. The District Court ruled Meland had no standing because SB 826 governed corporations, not shareholders, and at the time of Meland’s suit OSI was in compliance so any controversy was moot.
The Ninth Circuit disagreed, allowing Meland’s suit to go forward by finding that the practical effect of SB 826 was to govern shareholders and direct them to vote on the basis of gender to avoid the imposition of fines or penalties for noncompliance. The court further held that Meland’s suit alleged a direct harm and did not rely on prudential standing since he alleged personal harm rather than injury to the corporate entity.
Featuring:

Ann Ravel, Lecuter, Berkeley Law; Former Commissioner and Chair, Federal Election Commission
Anastasia P. Boden, Senior Attorney, Pacific Legal Foundation
Megan L. Brown, Partner, Wiley Rein

* * * * *
As always, the Federalist Society takes no position on particular legal or public policy issues; all expressions of opinion are those of the speaker.