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Federal Court Issues Decision in Conflict Minerals Case

April 14, 2014

Federal Court Issues Decision in Conflict Minerals Case

WASHINGTON, D.C. – The U.S. Court of Appeals for the District of Columbia Circuit today issued a decision in a case brought by industry groups challenging a rule requiring certain companies that file reports with the Securities and Exchange Commission (SEC) to publicly disclose whether their products rely on minerals from the Democratic Republic of the Congo (DRC).

“The court upheld the bulk of the rule, and the SEC still has ample authority to require companies to investigate and file reports regarding their use of conflict minerals,” said Julie Murray, an attorney at Public Citizen and counsel for Amnesty International, an intervenor in the case in support of the SEC. “The industry challenges in this case are transparent attempts to win through the judicial process what industry could not win from Congress, and today’s decision largely lays to rest these baseless challenges.”

Importantly, however, in a portion of the opinion joined by two of three judges, the D.C. Circuit invalidated a section of the conflict minerals rule that requires companies to use specific language when reporting that their products have “not been found to be DRC-conflict free.” The court held that this specific descriptor violates regulated entities’ First Amendment right against compelled commercial speech. The court made clear, though, that its holding does not call into question any other part of the SEC’s rule regarding a conflict minerals report or disclosure requirements.