Seven U.S. state Attorneys general served a letter to Target, Inc. warning the corporation that merchandise sold as part of the company’s LGBTQ Pride month campaigns might violate their state’s child protection laws. Republican attorneys general from Arkansas, Indiana, Idaho, Kentucky, Mississippi, Missouri, and South Carolina signed the letter.  

The letter alleged that the campaign was part of a “comprehensive effort to promote gender and sexual identity among children,” and cited such items like T-shirts that advertised popular drag queens. The letter also criticized Target for donating to GLSEN, an LGBTQ+ organization that works to end bullying in schools based on sexual and gender identity. GLSEN stated in a 2020 guide that school staff should not tell parents about a child’s gender or sexual orientation without consulting the child first, which the attorneys general said undermines “parents’ constitutional and statutory rights.”  

The attorneys general stated that Target’s Pride campaign threatened Target’s financial interests and that Target leadership has a “fiduciary duty to our States as shareholders in the company” and suggesting that company officials “may be negligent” in selling Pride products since it has negatively affected Target’s stock prices.  

The letter ended by suggesting that Target might find it “more profitable to sell the type of Pride that enshrines the love of the United States.” 

Target Has a Right to Exercise Free Speech

Target has a right to sell their merchandise as long as consumers want to buy it. If parents find pink shirts with drag queens to be offensive, they can choose not to buy the T-shirts or not shop at Target. However, there may also be people, including parents and children, who do not find such T-shirts offensive and would like to buy them. The state has no power to regulate what Target sells and in fact asking Target to remove such products in favor of other products would be unconstitutional and anti-capitalist.  

Target’s donations to GLSEN are not only legal, but protected constitutional speech.  Under Citizens United, corporation donations to political campaigns are a form of free speech. GLSEN is an advocacy group for LGBTQ who champion certain political positions, even if the attorneys general disagree with their positions.  

States Have No Standing to Regulate a Company’s Profits

The letter alleges that Target is losing profit because of its Pride campaign and thus are negligent to its shareholders. Even if this were true, attorney generals would not have standing to take action against Target for taking actions that lose the company profits. Only shareholders would have standing to bring a lawsuit if they are displeased that the corporation is losing money.  

Even if shareholders did bring such a lawsuit, most courts would not consider loss profits a valid lawsuit. Courts typically defer to business executives under the business judgment rule as to how to run their corporations. Indeed, many corporations will invest in and take short-term losses in hopes of obtaining greater profit later on. Some companies, like Uber, have consistently operated on million or billion dollar losses for decades as they pursue new technology to give themselves a potential future edge that could make that money back. Target’s leadership may be gambling that any short-term losses from Pride products are temporary until Republicans move on to the next controversy once the 2024 elections are over.  

Requiring Corporations to Support America Is Forced Speech

The letter’s statement that Target might find it “more profitable to sell the type of Pride that enshrines the love of the United States” is absurd. First, Target has a fiduciary duty to shareholders, but not to the states, especially since other states like California or New York might disagree with the letter that was composed. Second, Target often sells more than one product. There is no reason Target could not sell American flags or other products that “enshrines the love of the United States” along since LGBTQ products. Pride in America and the LGBTQ Pride campaign are not mutually exclusive.  

Finally, state governments cannot tell private corporations what to sell, as that would be considered forced speed, as the US Supreme Court recently ruled when it prohibited Colorado from enforcing an anti-discrimination law against a web design who allegedly refused serve to a gay man. As Justice Gorsuch put it, “If there is any fixed star in our constitutional constellation, it is that the government may not interfere with an ‘uninhibited marketplace of ideas.” Target has every right to market LGBTQ Pride products and these states threats to Target to switch to pro-American apparel is unnecessary, unconstitutional, and un-American.  

Should I Contact a Business Attorney?

A skilled business attorney will be able to identify the type of lawsuit you should file and can ensure that you follow the necessary procedures before filing a claim. If your business is the target of over intrusive government regulation, consider consulting a business attorney today.

The post Attorneys General Warning Letter to Target about Pride Merchandise Is Un-American appeared first on Law Blog.