On April 14, 2014, the US Court of Appeals for the District of Columbia Circuit ruled that, to the extent the SEC conflict mineral disclosure rule requires entities to disclose that any of their products have “not been determined to be DRC conflict free”, the rule violates the First Amendment to the US Constitution. The Court upheld the rule against all other challenges.

The US Securities and Exchange Commission (SEC) adopted the conflict minerals disclosure rulein August 2012 as required by section 1502 of the Dodd-Frank Wall Street Reform and Consumer Protection Act (the Dodd-Frank Act), passed by the US Congress in 2010. As adopted, the rule applies to all SEC reporting issuers, including any Canadian and other non-US companies that are reporting issuers in the United States under the SEC’s rules.

Following the adoption of the conflict minerals disclosure rule, the National Association of Manufacturers, the Chamber of Commerce of the United States of America, and the Business Roundtable filed a complaint in US federal court against the SEC challenging various aspects of the rule as arbitrary and capricious, and claiming that the disclosures required by the rule and by section 1502 of the Dodd-Frank Act violated the First Amendment to the US Constitution by improperly compelling burdensome and stigmatizing speech. The District Court disagreed and granted summary judgement to the SEC on all claims. That decision was appealed by the plaintiffs in the District Court case.

Source: Fasken Martineau - see full article