Target Loses Bids to Toss Pride Marketing Lawsuit, Change Venue

A shareholder claiming Target Corp. misled investors about risks of marketing LGBTQ+-themed merchandise during Pride Month notched two wins after a federal judge denied the retail giant’s motion to dismiss and its effort to move to the case out of Florida.

The company asked the US District Court for the Middle District of Florida to dismiss claims that its shares lost value in May 2023 as a result of its Pride Month marketing, arguing there was no proof that the marketing was to blame for the loss. But in a Wednesday ruling Judge John Badalamenti disagreed, saying the shares held by the investor lost value because the company failed to adequately monitor “social and political risks,” as Target’s board and Governance and Sustainability Committee (GSC) pledged to in disclosures.

“The existence of the GSC implies a structured investigation and analysis of social and political risks,” Badalamenti wrote. “Further, due to its formal status, the GSC creates the impression amongst investors that social and political risks are being considerably analyzed, reviewed, and monitored.”

Target also unsuccessfully sought to move the case to its headquarters state of Minnesota out of “convenience” for witnesses to travel to testify in the case. The company tried to argue that the case should move to its headquarters because that’s where the board conducts most of its business, including making decisions on diversity, equity, and inclusion initiatives.

Badalamenti denied the motion, saying that because Target held its annual meetings virtually for three years in a row and only requires employees to work from its headquarters one week per quarter, the argument was “unpersuasive.” The case will remain in the Middle District of Florida.

Target did not immediately respond to a request for comment.

The decisions by Badalamenti, a judge appointed by President-elect Donald Trump during his first term, keep the door open for more investor lawsuits against companies engaged in culture-war issues. They also mark wins for Stephen Miller, incoming deputy White House chief of staff and founder of the America First Legal Foundation (AFL), which represents the investor and brought the initial suit against Target in 2023.

“AFL’s lawsuit further alleges that the backlash to Target’s 2023 Pride Campaign led to a more than $12 billion collapse in share value — the largest stock price decline in over 20 years,” the firm said in a statement.

Boyden Gray PLLC and Lawson Huck Gonzalez PLLC also represent the investor. Kirkland & Ellis LLP and Faegre Drinker Biddle & Reath LLP represent Target.

The case is Craig v. Target Corporation, M.D. Fla., cv 00599, 12/4/24