Federal court remands conflict minerals case to SEC
Apr 11, 2017
The U.S. District Court for the District of Columbia has issued a final judgment in the litigation related to the SEC’s conflict minerals rule and has remanded the case to the Commission.
Editor’s Note: In April 2014, the U.S. Court of Appeals for the District of Columbia Circuit (the “Appellate Court”) held that parts of the SEC’s final rule on conflict minerals and of Section 1502 of the Dodd-Frank Act Wall Street Reform and Consumer Protection Act violate the First Amendment of the U.S. Constitution to the extent that they require “regulated entities to report to the Commission and to state on their website that any of their products have ‘not been found to be “DRC conflict free.” ’ ” In August 2015, the Appellate Court upheld the ruling.
After the April 3, 2017, ruling by the district court, the SEC announced that it is suspending enforcement of some requirements in the conflict minerals rule. According to the press release:
The court’s remand has now presented significant issues for the Commission to address. At the direction of the Acting Chairman, we have considered those issues. In light of the uncertainty regarding how the Commission will resolve those issues and related issues raised by commenters, the Division of Corporation Finance has determined that it will not recommend enforcement action to the Commission if companies, including those that are subject to paragraph (c) of Item 1.01 of Form SD, only file disclosure under the provisions of paragraphs (a) and (b) of Item 1.01 of Form SD. This statement is subject to any further action that may be taken by the Commission, expresses the Division’s position on enforcement action only, and does not express any legal conclusion on the rule. [Emphasis added]