On April 14, 2014, the U.S. Court of Appeals for the District of Columbia Circuit (D.C. Circuit) issued its long-anticipated ruling in the industry challenge to the Securities and Exchange Commission’s (SEC) conflict minerals rules, and – as we forecast in a previous blog post – free speech issues proved to be critical to the Court’s decision. In fact, the First Amendment challenge to the rules’ requirement that companies self-identify as “not conflict-free” was the only issue on which the Court sided with the industry challengers, as it rejected the various other challenges the National Association of Manufacturers (NAM) and other industry groups had lodged to the breadth of, and burdens imposed by, the SEC’s conflict minerals rules. A copy of the Court’s full decision is available here.
The Court’s decision leaves intact the underlying framework of the conflict minerals disclosure and reporting regime, but prohibits the SEC from requiring companies to identify themselves – or their products – as “not found to be ‘DRC conflict-free’” in the conflict minerals reports required under the SEC’s rules. This result raises a natural question for companies affected by the rules – namely, what does this ruling mean for our conflict minerals reporting obligations, both near-term and long-term? Continue reading this entry