(Reuters) - A conservative legal group has filed a lawsuit seeking to block California's new law requiring public companies headquartered in the state to include members of underrepresented groups on their boards.

Judicial Watch filed the lawsuit in a Los Angeles state court on behalf of Robin Crest and two other state taxpayers on Sept. 30, the day California Governor Gavin Newsom, a Democrat, signed AB 979 into law. It requires companies to include at least one board member who self-identifies as a member of an "underrepresented community," which the bill defines to include Black, Latino, Asian and Native American individuals, as well as those who are gay, lesbian, bisexual or transgender.

By the end of 2022, the law requires boards of nine or more members to have three such directors, and boards with 5-8 members to have two. It allows the Secretary of State to fine companies $100,000 for a first violation and triple that for repeat offenses and requires the state to report on compliance with the law starting in March 2022.

Crest, represented by Robert Patrick Sticht of Judicial Watch, argues the law violates the California Constitution by making distinctions based on race and gender that do not meet a compelling government interest. The lawsuit seeks to bar California Secretary of State Alex Padilla from using taxpayer funds to enforce the law. Sticht and a representative for Padilla did not immediately reply to requests for comment on Friday.

California Assemblymember Chris Holden, one of the law's authors, said on Friday that the legal challenge comes as "no surprise."

"Some would rather maintain a status quo that doesn't embrace diversity and inclusion," Holden, whose district includes Pasadena, said.

The lawsuit mirrors Judicial Watch's challenge to California's SB 826, a law known as Women on Boards that came into effect in late 2018 giving companies two years to include from one to three women on their board depending on their size. That case is scheduled for trial before Los Angeles County Superior Court Judge Maureen Duffy-Lewis in June 2021.

A March report by the California Secretary of State said that 282 companies reported compliance with that law, compared to 173 who had done so the year prior. The report said that 625 companies are subject to the law.

The state lawsuits are not the only ones to challenge California's board membership requirements. U.S. District Judge John Mendez in Sacramento, California, dismissed a federal case challenging SB 826 in April, saying plaintiff Creighton Meland, a shareholder in X-ray technology company OSI Systems, did not have a claim under the Equal Protection Clause of the 14th Amendment of the U.S. Constitution because the law does not impair his right to vote for the board members he chooses.

That case is now before the 9th U.S. Circuit Court of Appeals, and has drawn amicus briefs from conservative legal groups as well as the Philanthropy Roundtable, a group that represents donors, which argued fines under the law would take funds from companies that could be donated to charity.

The case is Crest v. Padilla, in the Superior Court of the State of California for the County of Los Angeles, No. 20STCV37513.

For Crest: Robert Patrick Sticht of Judicial Watch