Florida’s lawsuit against Target: hypocrisy

In February Florida’s attorney general filed a federal lawsuit against the Target Corp. on behalf of the State Board of Administration.

The SBA manages the pension system for many government workers in Florida and holds some shares in Target. The lawsuit alleges that Target defrauded investors by not properly disclosing the risk to investors posed by its Pride month activities and products. 

The lawsuit’s genesis is a legally and factually inaccurate letter sent in July 2023 to Target by a group of seven Republican state attorneys general threatening Target with lawsuits over their Pride month merchandise and donations. 

The letter made clear the objection to Target’s activities was about its message — aka its speech — on Pride month and LGBTQ issues in general. 

Because their objection was to specific messages, their objection was in fact to the speech exercised by Target. Likewise, threats by attorneys general were a clear threat to Target’s free speech. 

Florida’s new attorney general, James Uthmeier, who was not a party to that 2023 letter, nevertheless chose to take up the gauntlet in a show of political alignment and file suit against Target. 

This lawsuit is a startling case of hypocrisy by the state of Florida, both in terms of pension fund investments and more importantly, free speech. 

Let’s start with the lesser issues. Florida’s accusations that Target is guilty of financial misconduct are pretty hypocritical when you consider that the Florida Retirement System, which has the stock in Target that is the crux of the lawsuit, is itself nearly $46 billion in debt, a number that has been growing in recent years. Florida legislators are currently considering a bill to expand worker retirement benefits that could add another $47 billion in costs over the next 30 years. 

Florida’s pension system is not in dire financial straits because it lost some pocket change on investments in Target. The problem is it keeps promising state workers benefits it is not willing to fully pay for in each year’s budget.

And that is conceding that Florida lost money on its investments in Target. While it may have done that, the lawsuit provides no evidence that Target’s Pride month marketing caused its stock price to fall and harmed the state.

Lots of things affect Target’s stock price. Proving any one cause for a stock price rise or drop is difficult at best. Indeed, it may be that backlash to Target’s capitulation to culture war attacks over Pride merchandise had an even greater detrimental impact on its stock price. What then?

Of course, this isn’t really about stock prices. We know this because, as the kids say, “he admit it.” In his (weirdly unnecessary) video announcing the lawsuit, AG Uthmeier outright said that the lawsuit was aimed at Target’s expression: “a class action lawsuit for … pushing a harmful leftist agenda.”

Whatever one might think about the impact of Target’s expressive decisions on its stock price, one thing is clear: Florida is trying to use the facade of a shareholder lawsuit as an end-run around the First Amendment to punish speech it dislikes. Florida’s stated objection is to the message conveyed by Pride merchandise, placing this squarely within the First Amendment.

If the First Amendment means anything, it means that this is unacceptable. Indeed, the Supreme Court has made it clear that when a state business regulation conflicts with the First Amendment, the latter must control. Governments cannot simply purchase stock in a company and declare that they now have the right to threaten the company over their protected speech.

Florida’s attempt to do exactly that represents galling hypocrisy of the worst kind.

Florida Republicans were justifiably upset when the Twitter files and the Facebook files revealed the Biden Administration had implicitly threatened social media companies to suppress speech the administration didn’t want people to hear. Yet, here is the DeSantis administration committing the same offense, attempting to influence and punish a private party’s free speech.

No government of either party should use state power to suppress speech. And if one party violates that trust and citizens’ free speech rights, the other party should defend them, not join the violation. 

Democrats should not use the power of government to impose “woke” speech requirements in universities, public squares or corporate board rooms. Republicans who object to “woke” speech should respond with their own speech, not use the power of government to suppress speech they don’t like. 

The SBA’s fiduciary duty is to maximize returns for the plan to ensure a secure retirement benefit for state workers at the least feasible cost to state taxpayers. Going after Target for its environment, social and governance policies rather than for bona fide financial mismanagement or fraud puts state worker pensions at risk.

When partisan objectives take precedence over maximizing investment returns, public pension system investments face a higher risk of underperformance, ultimately placing the financial burden on taxpayers through increased taxes and contributions.

For Florida to fail its fiduciary duty to taxpayers and state workers while also trampling on free speech rights is shameful.

Adrian Moore is vice president at Reason Foundation and lives in Sarasota. Ari Cohn is lead counsel for tech policy at the Foundation for Individual Rights and Expression.