Reacting to the ruling, the Hindu American Foundation (HAF) said it is closely monitoring the case and will continue supporting Hindu Americans in California as the community works to safeguard its ability to celebrate one of its most important festivals.

"Last October, Hindu Americans celebrated a historic milestone when California recognised Diwali as an official state holiday, a meaningful step toward acknowledging the traditions and contributions of the state's Hindu community. Now, that recognition has been challenged in court," the foundation said in a statement.

It added: "The ruling focused on the wording of the law describing Diwali's religious significance, rather than the practical purpose of the holiday: allowing students and employees to observe an important festival without being forced to choose between their faith and their educational or professional responsibilities."

The legislation, signed into law in October 2025, made California the third US state to officially recognise Diwali as a state holiday, a move that was widely welcomed by the Indian diaspora.

The law, Assembly Bill (AB) 268, came into effect on January 1, 2026.

Under the legislation, public schools and community colleges are permitted to remain closed on Diwali, while state employees are eligible to take a paid day off to observe the festival.

The law also adds Diwali to the list of holidays excluded from being designated as judicial holidays under the California Code of Civil Procedure.

Additionally, it authorises public schools and educational institutions to organise educational activities and observances highlighting the significance and cultural importance of Diwali.

California Governor Gavin Newsom, known for his progressive policies, signed the bill into law on October 6, 2025.