Yesterday, the United States Court of Appeals for the District of Columbia issued its opinion on the conflict minerals legal challenge. (See our earlier blogs regarding the conflict minerals rules and the legal challenge thereto). The ruling rejected a number of the petitioner’s arguments, but agreed with the petitioner’s first amendment challenge. Specifically, the court held that the conflict minerals rules “violate the First Amendment to the extent the statute and rule 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.’” Accordingly, the three-judge panel affirmed the district court’s judgment in part and reversed in part and remanded the case back to the district court for further proceedings.
It is not crystal clear what practical effect the Court of Appeal’s decision will have on the conflict minerals rules or what actions the SEC may take in response to such decision. Despite yesterday’s ruling, companies should “keep the course” and continue preparing their initial Form SD which, as of now, is still due on June 2, 2014.