Blaming the retail store Target for its $12 billion loss on LGBT marketing is an extremely high evidentiary burden, according to an Orlando attorney.
“It's going to be a matter of discovery, and up to the plaintiffs to prove the financial loss they're alleging happened because of not necessarily LGBTQ marketing but as a result of the alleged misrepresentation made by the corporation and its board of directors that resulted in LGBTQ marketing,” said Gary Israel.
Israel was reacting to the lawsuit that America First Legal filed August 8 against Target in the U.S. District Court for the Middle District of Florida by shareholder Brian Craig.
“The proper way for a shareholder to advocate in a corporate forum is to have an annual election to vote out the board of directors if you don't like them but shareholders in the minority can't do that because there aren’t enough votes so what they do instead is try to allege a fraud,” Israel told the Florida Record.
In the complaint, America First Legal alleges that Target’s children-and-family-themed LGBT Pride marketing and sales campaign embroiled Target in the culture war and caused Target to experience the biggest stock decline in the company’s history.
“Its Board of Directors betrayed both Target’s core customer base of working families and its investors by making false and misleading statements concerning Target’s Environmental, Social and Governance (ESG) and Diversity, Equity, and Inclusion (DEI) mandates that led to its disastrous 2023 children-and-family themed LGBT Pride campaign,” wrote Craig’s attorney Jonathan Berry.
Target, its Chairman and CEO Brian C. Cornell and Board of Directors are accused of violating Section 14(a) of the Exchange Act, Rule 14a-9 under Section 10(b) of the Exchange Act and Rule 10b-5.
The plaintiff also takes issue with the company’s pledge to increase representation of Black workers by 20 percent through changes to its advancement, retention, and hiring plans implemented after the 2020 George Floyd murder.
“This lawsuit is extremist action,” Israel added. “It's trying to stop free enterprise and freedom of speech. I'm a big advocate of freedom of speech and clearly there's an agenda there. It has nothing to do with money, profits or misrepresentation. Anytime there is an attempt at extremist action, it shocks me, and that's on the left or on the right.”
Federal law requires publicly-traded corporations to provide certain information to shareholders in their proxy statements that allow those shareholders to make informed decisions, according to Gene Hamilton, vice president and general counsel with America First Legal.
“Target failed to execute its duty to its shareholders by making statements that led them to believe that political and social risks were being assessed–when in reality, the only thing Target’s Board and Management cared about was how effectively they fulfilled the desires of various metrics advanced by leftwing stakeholders," he said. "In so doing, they caused our client to lose a substantial amount of money, and we will vindicate his rights in federal court.”