by Cydney Posner

Hot off the press: The D.C. Circuit today issued a per curiam order denying the petitions of the SEC and Amnesty International for a rehearing en banc in Natl Assoc. of Manufacturers v. SEC, the conflict minerals case. No member of the court even requested a vote.   The order leaves standing the decision of the three-judge panel, decided in August of this year (see this PubCo post). In that case, the panel, by a vote of two-to-one, reaffirmed its earlier decision, concluding that the requirement in the conflict minerals rule to disclose whether companies’ products were “not found to be DRC conflict free” amounted to “compelled speech” in violation of companies’ First Amendment rights.

Will the SEC file a petition for cert? Given that the panel viewed the more lenient standard of  review for compelled commercial speech under the First Amendment (announced in Zauderer v. Office of Disciplinary Counsel) to be applicable only to disclosures in connection with voluntary advertising or product labeling —  a position the SEC asserted in it brief “was unprecedented” —  it would seem surprising  for the SEC to let the panel decision remain without a further challenge. (See this PubCo post  and this PubCo post.)   That holding, the SEC argued in its petition, “calls into question the application of Zauderer to many disclosures required under the securities laws, including those aimed at preventing investor deception,” a result that is “in tension with the Supreme Court’s statements that the ‘exchange of information about securities’ is ‘regulated without offending the First Amendment’ and that its commercial speech cases do not ‘cast doubt on the permissibility of these kinds of commercial regulation.’ Ohralik v. Ohio State Bar Ass’n,….”


Posted by Cydney Posner