National Association of Manufacturers v. Securities and Exchange Commission

In 2010, Congress required the Securities and Exchange Commission (SEC) (defendant) to issue a rule requiring companies that use certain so-called conflict minerals to investigate and disclose where such minerals originated. Congress did so in response to the strife and humanitarian abuses in the Democratic Republic of the Congo (DRC), which was being financed directly or indirectly by the sales of conflict minerals. In 2012, the SEC issued its conflict-minerals rule (rule). Per the rule, a company that knew or had reason to believe that the conflict minerals it used originated in the DRC or another covered country had to exercise due diligence regarding the source and chain of custody of its conflict minerals. A company that believed, after conducting due diligence, that its conflict minerals may have originated in a covered country had to file a conflict-minerals report with the SEC describing the company’s due-diligence efforts, identifying any products that were not DRC conflict free and providing detailed information about the source of minerals used in such products. Companies also had to post their conflict-minerals report, including the description of their products as not DRC conflict free, on their websites. The National Association of Manufacturers (association) (plaintiff) sued the SEC, alleging, among other things, that the requirement that companies describe certain products as not DRC conflict free was government-compelled speech that violated the First Amendment to the United States Constitution. Per the association, the SEC could achieve its goal of providing the public with information about conflict minerals in other ways, such as by allowing companies to use their own language to describe their own products or via an SEC-generated list of products that the SEC believed—based on due-diligence information submitted by the relevant companies under the rule—contained conflict minerals. The SEC responded that the association’s proposals would be less effective than the rule. The district court granted summary judgment to the SEC. The association appealed.