Target sued by investor over backlash to LGBTQ merchandise

By Jody Godoy

(Reuters) – A conservative legal organization sued Target on Tuesday on behalf of an investor, saying the retailer misrepresented the adequacy of its risk monitoring when customer backlash over LGBTQ-themed merchandise caught it by surprise.

America First Legal filed the lawsuit in Florida federal court on behalf of investor Brian Craig against Target, chief executive Brian Cornell and the company’s board of directors. America First is a nonprofit group headed by Stephen Miller, a former adviser to ex-President Donald Trump.

The lawsuit is the latest in a legal battle in which conservative legal groups and Republican legislators are challenging corporations that have enacted policies on social issues such as race and gender.

A spokesperson for Target did not immediately reply to requests for comment on Tuesday.

Craig claimed Target’s board misstated its oversight of “social and political risks” to the company, focusing on the wishes of progressive activist investors and failing to account for potential backlash from customers.

In May, Target pulled some LGBTQ-themed merchandise linked to Pride Month, citing increased confrontations between shoppers and employees and incidents of products being thrown on the floor.

Craig, who owns 216 Target shares, said the board falsely said it monitored social and political risk while focusing only on the risks associated with not achieving its ESG and diversity, equity and inclusion (DEI) goals.

The board “misrepresented its oversight because the board monitored only one side,” Craig said in the lawsuit.

Craig seeks damages for the decline in Target’s share price caused by the consumer reaction and for a judge to rule the company violated U.S. securities laws.

The case is Craig v. Target Corp. et al., No. 23-00599, U.S. District Court, Middle District Of Florida.

(Reporting by Jody Godoy in New York; Editing by Cynthia Osterman)