District Court Judge Assigned in Conflict Minerals Rule Case

Oct 13, 2016 | Emily Burke, Julia Chen, and Michael Littenberg
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This month, the litigation relating to the U.S. SEC’s Conflict Minerals Rule enters its fourth year. The litigation has been quiet for the better part of the last year, after the SEC’s petition seeking rehearing en banc by the D.C. Circuit Court of Appeals was denied and the SEC declined to seek Supreme Court review of the appellate court’s decision.

In April 2014, the Court of Appeals for the D.C. Circuit held that the requirement under the Conflict Minerals Rule that companies indicate that their products have “not been found to be DRC conflict free” violates the First Amendment. Following the April 2014 decision, the case was remanded to the D.C. District Court to take action consistent with the appellate court’s decision. In furtherance of the appellate court’s decision, late last week, the case was randomly assigned to Judge Ketanji Brown Jackson. 

The $64,000 question is, of course, what does this mean for the audit requirement under the Conflict Minerals Rule? In April 2014, in response to the appellate court’s decision, the SEC issued a Statement in which it indicated that an independent private sector audit will not be required unless a company voluntarily elects to describe a product as “DRC conflict free” in its Conflict Minerals Report.