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DeSantis eyes lawsuit over Bud Light’s deal with trans influencer. Experts are skeptical.

Sources agree company was acting in its best interests

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Florida Gov. Ron DeSantis (Screen capture/CNN)

As sales continue to slump after months of conservative backlash against Bud Light’s social media spot with trans influencer Dylan Mulvaney, Florida Gov. Ron DeSantis (R) announced he will explore a potential lawsuit against the beer brand’s parent company, Anheuser-Busch InBev.

“It appears to me that AB InBev may have breached legal duties owed to its shareholders,” DeSantis said in a letter shared on Twitter Friday outlining possible grounds for legal action on behalf of the shareholders of Florida’s pension funds.

Columbia University Law School Professor John Coffee, however, told the Washington Blade a legal doctrine called the business judgment rule “fully protects the board of Anheuser-Busch InBev from any liability for breach of fiduciary duty that might be asserted by Florida’s pension funds in a derivative suit.”

Caselaw directs courts to uphold decisions by company directors provided they are made in good faith, with the care expected of a reasonably prudent person, and with the reasonable belief that they were acting in the corporation’s best interests.

Multinational drink conglomerate AB InBev suffered financially as a result of Bud Light’s promotion with Mulvaney, with sales for the brand down 25 percent from last year according to market research data reported by CNBC.

“No doubt, Anheuser-Busch lost money because of the populist reaction to the use of a transgender ‘influencer,’ but that is not the standard for liability,” said Coffee, who is recognized as one of the country’s leading experts in securities law, corporate governance, white collar crime, complex litigation, and class actions.

Directors “were seeking to promote their product with a new audience, and it backfired, but that is not a breach of duty,” he said, adding, “Management has the legal right to innovate and try new tactics.”

Andrew Isen, founder and president of WinMark Concepts, agreed, telling the Blade, “Bud Light is an entry beer because of the price point,” so it made sense for the beer maker to target the younger demographics who comprise the influencer’s sizable online following.

“No one foresaw this backlash,” he said.

“They’re making business decisions, they’re making marketing decisions, to grow their business, and that’s what their responsibilities to their shareholders are,” said Isen, whose clients are mostly large publicly traded corporations.

Additionally, he said, partnering with an LGBTQ public figure like Mulvaney makes sense from a market research perspective.

For instance, Isen pointed to data from management consulting firm McKinsey & Co., which found that “for five years, our research has shown a positive, statistically significant correlation between company financial outperformance and diversity, on the dimensions of both gender and ethnicity.”

Coffee, who has repeatedly been listed among The 100 Most Influential Lawyers in America and topped rankings of the most-cited scholars in corporate and business law, told the Blade he is not aware of any previous cases in which a firm’s marketing or advertising decision provided grounds for shareholder litigation for breach of fiduciary duty in a derivative suit.

“I do not know if litigation will be brought,” he said, adding, “this sounds more like a political stunt.”

If DeSantis’s probe leads to an actual complaint on behalf of shareholders, Coffee said, “I would not expect it to survive a motion to dismiss in Delaware,” if AB InBev is headquartered in the state, where most commercial disputes are adjudicated.

“But the suit might be brought [improperly] in Florida,” Coffee said, “and anything might happen there.”

Regardless, Coffee said, “Gov. DeSantis will make no friends in the business community with these over broad attacks.”

DeSantis, addressing shareholders of his state’s pension funds, wrote in his letter on Friday that, “We must prudently manage the funds of Florida’s hardworking law enforcement officers, teachers, firefighters, and first responders in a manner that focuses on growing returns, not subsidizing an ideological agenda through woke virtue signaling.”

AB InBev is just the latest target of the governor’s crusade against “wokeism” in corporate America, a battle that his party is increasingly waging against companies’ environmental and social governance policies, their diversity, equity, and inclusion initiatives, and their criticism of conservative policies or policymakers.

Firms like Blackstone had come to understand concepts like responsible environmental stewardship and diversity in corporate boards of directors as intrinsic values that are good for business and “integral to their shareholders,” Isen said, referring to the investment management juggernaut that boasts more than $991 billion in assets under management.

However, as these moves come under fire from various factions on the right — intimidation by elected leaders, coordinated online attacks, incendiary coverage in partisan media — the business community is taking notice. Isen pointed to “the amount of companies that are getting rid of their diversity officers,” as reported last week in The Wall Street Journal.

This “noise,” Isen said, is “scaring companies to death.”

Other state officials have recently weaponized the power of their governments against companies over their support for the LGBTQ community. On July 5, seven Republican state attorneys general issued a letter to Target Corp. notifying the retailer that certain merchandise in its seasonal Pride collection may violate their obscenity statutes.

The popularity of DeSantis’s attacks on “woke” corporations will soon be tested as the governor heads into Republican primary races in hopes of securing his party’s nomination for the 2024 presidential election.  

DeSantis’s office did not respond to written questions or provide comment for this story.

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Congress

House Democrats oppose Bessent’s removal of SOGI from discrimination complaint forms

Congressional Equality Caucus sharply criticized move

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Treasury Secretary Scott Bessent (Washington Blade photo by Michael Key)

A letter issued last week by a group of House Democrats objects to Treasury Secretary Scott Bessent’s removal of sexual orientation and gender identity as bases for sex discrimination complaints in several Equal Employment Opportunity forms.

Bessent, who is gay, is the highest ranking openly LGBTQ official in American history and the second out Cabinet member next to Pete Buttigieg, who served as transportation secretary during the Biden-Harris administration.

The signatories to the letter include a few out members of Congress, Congressional Equality Caucus chair and co-chairs Mark Takano (Calif.), Ritchie Torres (N.Y.), and Becca Balint (Vt.), along with U.S. Reps. Nikema Williams (Ga.), Hank Johnson (Ga.), Raja Krishnamoorthi (Ill.), Delia Ramirez (Ill.), Joyce Beatty (Ohio), Lloyd Doggett (Texas), Eleanor Holmes Norton (D.C.), Josh Gottheimer (N.J.), and Sylvia Garcia (D-Texas).

The letter explains the “critical role” played by the EEO given the strictures and limits on how federal employees can find recourse for unlawful workplace discrimination — namely, without the ability to file complaints directly with the Employment Opportunity Commission or otherwise engage with the agency unless the complainant “appeal[s] an agency’s decision following the agency’s investigation or request[s] a hearing before an administrative judge.”

“Your attempt to remove ‘gender identity’ and ‘sexual orientation’ as bases for sex discrimination complaints in numerous Equal Employment Opportunity (EEO) forms will create unnecessary hurdles to employees filing EEO complaints and undermine enforcement of federal employee’s nondiscrimination protections,” the members wrote in their letter.

They further explain the legal basis behind LGBTQ inclusive nondiscrimination protections for federal employees in the EEOC’s decisions in Macy v. Holder (2012) and Baldwin v. Foxx (2015) and the U.S. Supreme Court’s decision in Bostock v. Clayton County (2020).

“It appears that these changes may be an attempt by the department to dissuade employees from reporting gender identity and sexual orientation discrimination,” the lawmakers wrote. “Without forms clearly enumerating gender identity and sexual orientation as forms of sex discrimination, the average employee who experiences these forms of discrimination may see these forms and not realize that the discrimination they experienced was unlawful and something that they can report and seek recourse for.”

“A more alarming view would be that the department no longer plans to fulfill its legal obligations to investigate complaints of gender identity and sexual orientation and ensure its
employees are working in an environment free from these forms of discrimination,” they added.

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Congress

Senate parliamentarian orders removal of gender-affirming care ban from GOP reconciliation bill

GOP Senate Leader John Thune (S.D.) hoped to pass the bill by end-of-week

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(Washington Blade photo by Michael Key)

Restrictions on the use of federal funds for gender-affirming care will be stripped from the Republican-led Senate reconciliation bill, following a ruling by the Senate parliamentarian on Tuesday that struck down a number of health related provisions.

The legislation banned coverage for transgender medical care through Medicaid and the Children’s Health Insurance Program, language that was also included in the House version of the bill passed on May 22 with a vote of 215-214.

The parliamentarian’s decision also rejected Republican proposals for a Medicaid provider tax framework, which allows states to charge health care providers and use the funds to support their programs, along with broader cuts to Medicaid.

Amid calls to override Tuesday’s ruling from Republicans like U.S. Rep. Greg Steube (Fla.), GOP Senate Majority Leader John Thune (S.D.) told reporters “That would not be a good outcome for getting a bill done.”

He also acknowledged that the timing and schedule might have to be adjusted. Senate Republicans had hoped to pass the reconciliation bill by the end of this week, though this was not a legal or procedural deadline.

Dubbed the “one big, beautiful bill” by President Donald Trump, the legislation would extend tax breaks from 2017 that overwhelmingly benefit the wealthiest Americans and corporations. To cover the cost, which is estimated to exceed $4 trillion over 10 years, the bill would make drastic cuts to social welfare programs, particularly Medicaid.

Democrats are not in a position to negotiate across the aisle with Republicans holding majorities in both chambers of Congress, but for months they have been calling attention to the effort by their GOP colleagues to strip Americans of their health insurance to pay for the tax breaks.

The Congressional Budget Office estimates that 10.9 million people would lose their coverage, either through Medicaid or the Affordable Care Act marketplaces. Some Republicans like U.S. Sen. Josh Hawley (Mo.) are pushing back against the deep cuts to Medicaid, arguing they would be devastating for many of their constituents and also to hospitals, nursing homes, and community health care providers in rural areas.

In a statement emailed to the Washington Blade on Tuesday, U.S. Senate Democratic Whip Dick Durbin (Ill.) said, “Anti-trans extremists are attempting to use the full power of the government to hurt kids, and recent Supreme Court decisions in Skrmetti and Medina are enabling their quest.”

While today’s ruling by the Senate parliamentarian is a temporary win, I will keep pushing back on these shameful attempts to harm trans kids and their families for trying to live authentically,” said the senator, who also serves as ranking member of the powerful Senate Judiciary Committee.

U.S. Rep. Mark Takano (D-Calif.), who is gay and chairs the Congressional Equality Caucus, also shared a statement with the Washington Blade addressing the parliamentarian’s ruling:

“This ruling by the Senate Parliamentarian is a win for the transgender people who rely on Medicaid and CHIP to access the healthcare they need to live fuller, happier, and healthier lives—but the fight is not over yet,” the congressman said.

 “Republican Senators must abide by her ruling and remove the ban from the final version of Trump’s Big Ugly Bill,” he said. “Yet, even with this provision removed, this bill is terrible for the American people, including trans Americans. Every Equality Caucus member voted against it in the House and we’re ready to do so again if the Senate sends it back to the House.”

The Human Rights Campaign issued a press release with a statement from the organization’s vice president for government affairs, David Stacy:

“The fact remains that this bill belongs in the trash. It continues to include devastating cuts to health care programs — including Medicaid — that would disproportionately harm the LGBTQ+ community, all so the already rich can receive huge tax cuts,” Stacy said.

“While it comes as a relief that the Senate parliamentarian concluded that one provision in the nightmarish reconciliation bill that would have denied essential, best practice health care to transgender adults does not belong, we aren’t done fighting,” he said. “With attacks on our community coming from many directions, including the Supreme Court, we will work to defeat this bill with everything we’ve got.”


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Congress

Murkowski, Shaheen reintroduce Global Respect Act

Bill would sanction foreign nationals who commit anti-LGBTQ human rights abuses

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Then-U.S. Ambassador to Hungary David Pressman marches in the 2024 Budapest Pride parade that took place against the backdrop of the Hungarian government's continued anti-LGBTQ crackdown. The Global Respect Act would sanction foreign nationals who carry out human rights abuses against LGBTQ and intersex people. (Photo courtesy of Pressman's X account)

U.S. Sens. Lisa Murkowski (R-Alaska) and Jeanne Shaheen (D-N.H.) on Wednesday once again introduced a bill that would sanction foreign nationals who carry out human rights abuses against LGBTQ and intersex people.

The two senators have previously introduced the Global Respect Act. Co-sponsors include U.S. Sens. Chris Van Hollen (D-Md.), Chris Murphy (D-Conn.), Jeff Merkley (D-Ore.), Cory Booker (D-N.J.), Peter Welch (D-Vt.), Brian Schatz (D-Hawaii), Edward Markey (D-Mass.), Tammy Baldwin (D-Wis.), and Ron Wyden (D-Ore.)

“Around the world, individuals who are part of the LGBTQ+ community are in danger for simply existing,” said Murkowski in a press release. “Hate and violence cannot and should not be tolerated. I’m hopeful that this legislation will establish actionable consequences for these inexcusable human rights violations, and create a safer world for all people — regardless of who they are or who they love.” 

Shaheen in the press release notes “the risk of personal harm for LGBTQI individuals for publicly identifying who they are or expressing who they love has tragically increased in recent years.”

“Human rights, as defined by the Universal Declaration of Human rights, recognizes that global freedom, justice, and peace depend on ‘the inherent dignity’ and ‘the equal and inalienable rights of all members of the human family,” said the New Hampshire Democrat. “LBGTQI human rights are universal human rights. We must ensure that we hold all violators of those rights accountable.” 

The promotion of LGBTQ and intersex rights abroad was a cornerstone of the Biden-Harris administration’s foreign policy.

The current White House has suspended most foreign aid. The elimination of these funds has left the global LGBTQ and intersex rights movement reeling.

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