Target must face shareholder lawsuit over Pride backlash, US judge rules

[Lori Dee]

Target must face shareholder lawsuit over Pride backlash, US judge rules
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Reuters - Mike Scarcella
December 5, 20249:36 AM MST

Target (TGT.N), has failed to persuade a judge in Florida to dismiss a lawsuit that accused the retailer of deceiving shareholders after its sales of LGBTQ-themed merchandise for Pride Month sparked a backlash and a customer boycott.

U.S. District Judge John Badalamenti in Fort Myers ruled, that the plaintiffs had presented enough information for now to pursue claims that Target misled investors about its efforts to guard against social and political risks.

The lawsuit from investor Brian Craig claims that Target's board focused only on activist groups' calls for diversity, equity and inclusion (DEI) measures and overlooked potential negative responses to the Pride campaign in May 2023.

America First Legal, the conservative group that filed the lawsuit last year, in a statement on Wednesday called the court ruling a "warning to publicly traded corporations' boards and management." The group said the risk of DEI programs and environmental, social, and governance (ESG) initiatives "cannot be whitewashed with boilerplate language or ignored."

America First filed the lawsuit in Florida federal court in August 2023. The nonprofit group is headed by Stephen Miller, a close adviser to U.S. President-elect Donald Trump.

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