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National Association of Manufacturers et al. v. U.S. Securities and Exchange Commission

Topic(s): First Amendment
Scope of Statutory Rights and Remedies
Court: Select Court

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For nearly two decades, the Democratic Republic of Congo (DRC) has been in the grip of armed conflict that has caused the suffering of millions of men, women, and children. An important source of funding for armed groups in the DRC is the minerals trade, which supplies tin, tantalum, tungsten, and gold that end up in popular consumer products. In 2010, Congress acted to lessen the use of conflict minerals fueling violence in the DRC by passing Section 1502 of the Dodd-Frank Wall Street Reform and Consumer Protection Act. Section 1502 amended U.S. securities law to require certain companies that file reports with the U.S. Securities and Exchange Commission (SEC) to investigate and disclose publicly whether their products rely on conflict minerals from the DRC or adjoining countries and whether the trade in those minerals helps finance armed groups contributing to the conflict. The SEC adopted a final rule, commonly known as the Conflict Minerals Rule, to implement Section 1502.

In October 2012, the National Association of Manufacturers, the U.S. Chamber of Commerce, and the Business Roundtable petitioned the U.S. Court of Appeals for the District of Columbia Circuit for review of the Conflict Minerals Rule and Section 1502. Amnesty International USA and Amnesty International Limited intervened as respondents in support of the Conflict Minerals Rule and Section 1502. The case was subsequently transferred to the U.S. District Court for the District of Columbia because the D.C. Circuit lacked jurisdiction over the petition. In July 2013, the district court upheld the Conflict Minerals Rule in full and rejected the industry groups’ argument that Section 1502 violates companies’ First Amendment rights. A panel of the D.C. Circuit upheld the Rule against most challenges by the industry groups, including a challenge to the SEC’s analysis of the Rule’s costs and benefits. However, in a portion of the decision joined by only two judges, the court of appeals invalidated the requirement that companies use specific language when reporting that their products have “not been found to be DRC-conflict free.” Applying Central Hudson Gas & Electric v. Public Service Commission, 447 U.S. 557 (1980), the court of appeals held that requiring this specific descriptor violates regulated entities’ First Amendment right against compelled commercial speech.

After the panel issued its decision, the industry groups moved the D.C. Circuit for a stay of the entire Conflict Minerals Rule, which the Court denied. Amnesty International then petitioned for rehearing and rehearing en banc of the panel’s First Amendment decision. On rehearing, the panel again held that requiring companies to state that their products have “not been found to be DRC-conflict free” violates the First Amendment. Amnesty has filed a second petition for rehearing en banc, which remains pending.

Public Citizen Litigation Group represents Amnesty International USA and Amnesty International Limited in the proceedings.