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National Ass’n of Manufacturers v. Securities & Exchange Commission

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 sued the SEC to challenge the Conflict Minerals Rule and Section 1502. Represented by Public Citizen, Amnesty International USA and Amnesty International Limited intervened as respondents in support of the Conflict Minerals Rule and Section 1502. 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.

The industry plaintiffs appealed, and a panel of the D.C. Circuit upheld the Rule in large part, including the 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 violated 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. We 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. The appellate court then remanded the case to the district court, where the case was closed, leaving the majority of the Rule intact.