Aug. 8, 2023, 5:14 PM
Ex-Trump Officials Sue Target Alleging Pride Month Investor Risk
Target is facing a lawsuit from former Trump officials who claim the retailer misled investors about financial risks from LGBTQ Pride marketing that brought a conservative backlash costing shareholders billions of dollars.
America First Legal Foundation, led by former senior Trump adviser Stephen Miller, filed the lawsuit against Target Corp. on behalf of a company shareholder Tuesday in federal court in Florida. Target in May sold LGBTQ-themed merchandise that drew the retailer into the US culture wars alongside Bud Light maker Anheuser-Busch InBev NV and other companies.
Some customers condemned Target’s merchandising of clothing and products intended for Pride Month in June, which celebrates lesbian, gay, bisexual and transgender people. The retailer then said it was pulling some items after threats against employees, garnering additional rebukes from customers angered by its retreat.
Target lost $10 billion in market valuation between May 18 and 28, as it failed to oversee the risks of ESG initiatives, according to America First Legal’s complaint filed in the US District Court for the Middle District of Florida.
“No rational board of directors or management of a retailer with a core customer base of working families would have approved such a nationwide campaign,” America First Legal said in the complaint. “Nonetheless, Target’s officials pursued.”
Target didn’t immediately respond to a request for comment.
Culture Wars
Target’s Pride Month kerfuffle came soon after Anheuser-Busch faced a conservative-driven boycott for partnering with a transgender influencer to sell Bud Light beer. Bud Light said last week that its US revenue fell 10.5% in the second quarter, around the time of the boycott.
Much of the backlash against environmental, social and governance policies—often referred to as “woke capitalism” by Republican politicians—has focused on companies demonstrating support for the LGBTQ community or implementing diversity, equity and inclusion policies.
America First Legal appears to be building other legal cases. The organization this spring put out a call on Twitter, now known as X, for shareholders of Target, Anheuser-Busch or other companies “that are promoting transgender, LGBTQ and PRIDE products and diminishing shareholder value” to get in touch with them.
Target had given investors information that led them to assume it was assessing political and social risks when it was not, Gene Hamilton, America First Legal’s vice president and general counsel, said in a statement to Bloomberg Law.
“The only thing Target’s board and management cared about was how effectively they fulfilled the desires of various metrics advanced by leftwing ‘stakeholders,’” Hamilton, a former counselor to Trump Attorneys General Jeff Sessions and William Barr, said in the statement.
America First Legal is joined in the case with Boyden Gray PLLC and Lawson Huck Gonzalez PLLC. Boyden Gray has helped bring several cases over ESG issues, including against board diversity requirements for Nasdaq-listed companies.
The case isCraig v. Target Corporation, M.D. Fla., filed 8/8/23…
https://news.bloomberglaw.com/esg/ex-trump-officials-sue-target-alleging-pride-month-investor-risk