Pugno's nine-page complaint, filed Tuesday in Sacramento County Superior Court, contends that Gaines' ballot designation is misleading.
"The facts reflect that Gaines currently serves as a full-time member of the California State Assembly, and may spend nominal time on the side as a marketing consultant," the complaint said.
Pugno declined to comment on his challenge pending a court hearing Thursday before Judge Michael P. Kenny.
The two candidates, both Republicans, are running in the newly drawn, heavily GOP 6th Assembly District, based largely in Placer County but extending into Folsom, Fair Oaks, Orangevale and El Dorado hills.
Gaines said her ballot designation is fair and accurate because she and her husband, state Sen. Ted Gaines, both Rocklin residents, recently formed a family insurance business based in Roseville.
"She's a 50 percent owner, so I don't know why they think they could win a lawsuit like this, but that's what lawyers do," said Dave Gilliard, Beth Gaines' campaign consultant.
Beth Gaines said she provides marketing services and generates leads for the family insurance firm. She joined the Assembly last May to fill a seat left vacant by her husband's move to the Senate, where he replaced Fair Oaks Republican Dave Cox after the latter's death.
The Gaineses previously were affiliated with a Sacramento insurance firm, Pointwest Insurance Associates. Ted Gaines reported income of more than $100,000 from the firm last year, while Beth Gaines reported receiving less than $10,000.
In a year of low approval ratings for the California Legislature, more than a half-dozen lawmakers statewide - including both Beth and Ted Gaines - are not describing themselves as legislators in ballot designations.
Recognizing that lawmakers may own businesses or have other vocations, state law provides flexibility on ballot designations, requiring only a three-word description of a principal profession, vocation or occupation, either currently or in the past 12 months.
Pugno's complaint said the Gaines family insurance was incorporated on Jan. 19, less than one month before Beth Gaines filed nomination papers for the race.
"'Small business owner' fails to comply with the statute because even if it is technically true, it is not Gaines' principal profession, occupation or vocation, and is thus misleading," Pugno's complaint said.
Pugno's complaint seeks a court order forcing Beth Gaines to use a different ballot designation.
PHOTO CREDIT: Beth Gaines speaks to a group of her closest supporters in 2011. The Sacramento Bee/Autumn Cruz