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National Ass'n of Manufacturers v. Securities and Exchange Commission

ELR Citation: 45 ELR 20155
Nos. 13-5252, (D.C. Cir., 08/18/2015)

The D.C. Circuit reaffirmed its prior decision that the Securities and Exchange Commission's (SEC's) "conflict materials" rule violates the First Amendment. SEC issued the rule in 2012 pursuant to §1502 of the Dodd-Frank Wall Street Reform and Consumer Protection Act, which requires SEC to issue regulations requiring firms that use "conflict minerals" to investigate and disclose the origin of those minerals, particularly with regard to conflicts in the Democratic Republic of Congo (DRC). An association of manufacturers challenged the final rule, raising several claims. In its prior decision, the court sided with SEC on the majority of the association's claims, but it held that the rule violates the First Amendment to the extent it requires regulated entities to state on their website that any of their products have "not been found to be 'DRC conflict free'." The label "DRC conflict free" is a metaphor that conveys moral responsibility for the Congo war. By compelling an issuer to "confess blood on its hands," the statute interferes with that exercise of the freedom of speech under the First Amendment. But in light of the court's intervening decision in American Meat Institute v. U.S. Department of Agriculture, 760 F.3d 18, 44 ELR 20173 (D.C. Cir. 2014), the court had granted petitions for rehearing to consider what effect, if any, that decision had on the court's judgment that the conflict minerals disclosure rule violated the First Amendment. But the court ultimately saw no reason to change its analysis or conclusion on this issue.