AI-assisted summary
• The conservative group America First Legal alleges that Target misled shareholders about the risks of its Pride campaign, leading to financial losses.
• Target attempted to have the case dismissed or moved to Minnesota, but the judge denied both requests.
• America First Legal views the ruling as a warning to corporations about the potential consequences of promoting social or political agendas.

A lawsuit against Target over its controversial 2023 Pride Collection can move forward, a Florida judge has ruled.

The company's Pride Collection last year triggered backlash and boycotts from conservatives over LGBTQ-themed merchandise, including bathing suits designed for transgender people. The company pulled the items from store shelves as a result.

"Target embraced a radical transgender agenda targeting children and families through the corporation’s infamous 2023 'Pride' campaign," conservative group America First Legal, which filed the lawsuit, said in a statement, adding that the backlash "led to billions in losses."

The lawsuit accused Target's board of directors of only focusing on its environmental, social, governance and diversity, equity and inclusion initiatives, and that its Pride campaign overlooked the risk of negative backlash, ultimately leading the company to lose over $25 billion in market capitalization.

On Tuesday, U.S. District Judge John Badalamenti ruled that America First Legal provided enough information to pursue claims that the retail giant misled its shareholders, according to court documents acquired by USA TODAY.

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Target did not respond to USA TODAY's request for comment.

What is America First Legal?

America First Legal is a conservative nonprofit headed by Stephen Miller, a close adviser to President-elect Donald Trump, according to Reuters.

In November, Miller was tapped to become the incoming president's deputy chief and Homeland Security adviser.

America First Legal: 'Misleading' statements

America First Legal accused Target of publishing "misleading statements and omissions" in annual proxy statements and reports in 2021, 2022 and 2023, according to the court document.

Target argued in court documents that the case should be dismissed because America First Legal, according to the court document, failed to:

• "Plead facts showing that any alleged misstatement was materially false or misleading."
• "Plead falsity of risk warnings in the 2021 and 2022 Annual Reports."

"Target disclosed the risk of adverse customer and stockholder reactions," according to court documents. "They contend that they have disclosed this risk since 2018 and that a securities fraud claim cannot be premised on the failure to disclose a risk that was actually disclosed."

Target attempted to dismiss the court case or move it

Target attempted to get the case dismissed but that's what the judge declined to do on Tuesday.

Target took another blow when its request to transfer the case to a Minnesota court, where the corporation is headquartered, was also denied.

A "warning" to corporations

America First Legal said the decision not to throw out the lawsuit 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," Reed Rubinstein, America First Legal senior vice president, said in a statement.

It added that the risk of diversity and inclusion programs, and environmental, social, and governance initiatives "cannot be whitewashed with boilerplate language or ignored."

Contributing: Joey Garrison, Melissa Cruz; USA TODAY; Reuters

Julia is a trending reporter for USA TODAY. You can connect with her on LinkedIn, follow her on X, formerly known as Twitter, Instagram and TikTok: @juliamariegz, or email her at [email protected]