by Cydney Posner
The Chief Justice has granted another extension of time for the SEC to file a petition for cert in Natl Assoc. of Manufacturers v. SEC, the conflict minerals case. The SEC now has until April 7, 2016 to file its petition.
You might recall that, in November 2015, the D.C. Circuit issued a per curiam order denying the petitions of the SEC and Amnesty International for a rehearing en banc in the case. The order left standing the August 2015 decision of the three-judge panel (see this PubCo post) in which 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.
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 its brief “was unprecedented” — it would be surprising for the SEC to allow the panel decision to remain without a further challenge. (See this PubCo post and this PubCo post.) That holding, the SEC argued in its petition to the D.C. Circuit, “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,….”