On November 18, the US Court of Appeals for the District of Columbia Circuit granted the petitions of the Securities Exchange Commission and Amnesty International for a panel rehearing of the lawsuit challenging the SEC’s conflict minerals rule.
As discussed in the Corporate and Financial Weekly Digest edition of April 18, 2014, the court of appeals generally upheld the conflict minerals rule, but found that, to the extent that the rule requires an issuer to disclose that any of its products “have not been found to be ‘DRC conflict free,’” the rule violates the First Amendment’s prohibition against compelled speech. As noted in the Corporate and Financial Weekly Digest edition of May 2, 2014, in response to the court of appeals’ decision, the SEC announced that it expected issuers to file reports required by the conflict minerals rule on or before the scheduled due date, but did not require issuers to comply with the portion of the rule that was invalidated by the court of appeals.
In its order, the court of appeals directed the parties to file supplemental briefs addressing questions that were raised, in part, by a case that was decided subsequent to the court’s original conflict minerals rule decision. The SEC and Amnesty International argue that this subsequent decision supports the notion that the disclosure requirement that was previously struck down by the court of appeals is permissible under the First Amendment.