Appeals Court Finds Parts of SEC Conflict Minerals Law Unconstitutional

The U.S. Court of Appeals for the D.C. Circuit on April 14 struck down as unconstitutional parts of the Security and Exchange Commission’s new regulations on reporting of conflict minerals. A 2012 final rule requires companies to publicly disclose their use of conflict minerals that originated in the Democratic Republic of the Congo or an adjoining country (see 12082308). The first reports are due May 31, 2014. Under the regulations, if a company used tantalum, tin, gold or tungsten the SEC considers a conflict mineral in their products, then the company would have to report that the product is not conflict minerals-free. Although it upheld other aspects of the new regulations, the D.C. Circuit ruled that the requirement to say if a product is “not DRC conflict free” in company reports and on company websites illegally compels speech in violation of the First Amendment.