A Los Angeles court has said that a Californian law requiring companies to have up to three women on corporate boards is unconstitutional.
Superior Court Judge Maureen Duffy-Lewis said the law, passed in 2018, violated the right to equal treatment under the state and federal law.
Secretary of State Shirley Weber’s office said she will review the ruling.
Under the law companies faced fines of up to $300,000 (£240,000) for failures to meet the required representation.
It called on all corporations headquartered in California to have at least one board member who identified as a women by the end of 2019.
By January 2022 that figure was to rise to two women on boards with five people or fewer and three women with boards of six members or more.
The challenge was made by the conservative legal group Judicial Watch, who had claimed it was illegal to use taxpayer funds to enforce a law that violated the right to equal protection under Californian and federal law by enforcing gender-based quotas.
The group welcomed the ruling and its president, Tom Fitton, criticised what he called the “radical Left’s unprecedented attacks on anti-discrimination law”.
State Senator Toni Atkins, a Democrat who helped guide the bill through the state assembly, said the ruling was disappointing and served as a reminder “that sometimes our legalities don’t match our realities”.
“More women on corporate boards means better decisions and businesses that outperform the competition,” Ms Atkins said in a statement. “We believe this law remains important, despite the disheartening ruling.”
While no company has ever faced prosecution under the bill, and the state testified that it never intended to prosecute, the law has been credited with improving the representation of women on boards.
But critics have observed that half of the corporations required to file under the law failed to do so.
Others have observed that the law was on built on shaky foundations and a letter from former Secretary of State Alex Padilla, which surfaced during the trial, warned then-Governor Jerry Brown weeks before he signed it into force that it was practically unenforceable.
The ruling comes just weeks after Judicial Watch successfully challenged another law requiring boards to include individuals who identify as a member of an “under-represented community”.
Lawmakers had sought to boost the representation of certain racial groups and members of the LGBT community under the bill.