On August 18, the US Court of Appeals for the District of Columbia Circuit issued its opinion on the rehearing of the lawsuit challenging the Securities and Exchange Commission’s conflict minerals rule. The ruling upheld the court of appeals’ previous ruling that, to the extent that the conflict minerals rule requires an issuer to disclose that any of its products “have not been found to be ‘DRC conflict free,’” the rule violates the First Amendment’s prohibition against compelled speech.
As noted in the Corporate & Financial Weekly Digest edition of May 2, 2014, following the court of appeals’ initial ruling regarding the First Amendment challenges to the conflict minerals rule, Keith Higgins the director of the SEC’s Division of Corporation Finance, issued a public statement advising issuers that they are expected to file any reports required by the conflict mineral rule on or before the scheduled due date and comply with those portions of the rule that were upheld by the court. Accordingly, the ruling by the court of appeals to reaffirm its earlier decision is not expected to have a practical impact on issuers already complying with the conflict minerals rule, although it is possible that the SEC’s Division of Corporation Finance may issue interpretative guidance on the conflict minerals rule now that the court of appeals has issued its opinion.
A copy of the court’s full opinion is available here.