Evergreen Reporter

The U.S. District Court for the Middle District of Florida has rejected Target Corporation's request to dismiss a shareholder derivative lawsuit filed by America First Legal (AFL) and co-counsel Boyden Gray PLLC and Lawson Huck Gonzalez PLLC. The case, Craig v. Target Corporation, claims that Target did not adequately disclose the potential consumer backlash risks associated with its LGBT "Pride Month" marketing campaign, which allegedly violated federal securities laws.

The lawsuit was initiated on August 8, 2023, by AFL against Target and its Board of Directors. It accused the company of misleading investors about market risks tied to its Environmental, Social, and Governance (ESG) and Diversity, Equity, and Inclusion (DEI) initiatives. According to AFL, Target's 2023 "Pride" campaign promoted a radical transgender agenda aimed at children and families, resulting in significant financial losses due to public backlash.

Target sought to have the lawsuit dismissed and requested a venue change from Florida—where AFL's clients reside—to Minnesota, where the corporation is based. However, both motions were denied by the court.

Reed D. Rubinstein, Senior Vice President of America First Legal, commented on the decision: “Today’s decision is a warning to publicly traded corporations’ boards and management: Our federal securities laws mandate fair and honest disclosure of the market risk created by management when it uses shareholder resources, including consumer goodwill, to advance idiosyncratic and extreme social or political preferences. The risk of ESG mandates and DEI initiatives, such as Target’s “Pride Month” that targeted young children cannot be whitewashed with boilerplate language or ignored.”

Jonathan Berry, Managing Partner of Boyden Gray PLLC added: “Today’s ruling is an important win for our clients; we look forward to continuing to litigate this case to obtain relief for our clients and hold Target accountable for their actions.”