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Conflict Minerals Rule Update: D.C. Circuit Court Denies Request for Stay

As most readers are likely aware, on April 14, 2014, the U.S. Court of Appeals for the District of Columbia Circuit (D.C. Circuit) dismissed a variety of challenges to the SEC’s conflict minerals rule, but found unconstitutional the rule’s requirement that issuers report, in a conflict minerals report to be filed with the SEC and posted on the issuer’s publicly available website, that any of their products have “not been found to be ‘DRC conflict free.’” Following the SEC’s partial stay of the aspects of the conflict minerals rule the court found to be unconstitutional,1 the appellants in the litigation as to the rule’s validity petitioned the D.C. Circuit for an emergency stay of the entire rule. On May 14, 2014, the D.C. Circuit denied the emergency motion without explanation.2

As a result of this development, issuers subject to reporting obligations under the rule should be working on finalizing their Form SDs and any necessary conflict minerals reports. Issuers must file these forms and reports with the SEC by the June 2, 2014 filing deadline. Issuers should prepare their reports in accordance with the guidance provided in the recent statement (Statement) of the Director of the SEC’s Division of Corporation Finance (CorpFin)3 that indicated that the CorpFin staff expects that filed Form SDs and conflict minerals reports will comply with and address those portions of the rule that the D.C. Circuit upheld and that provided guidance on the disclosure to be provided in Form SDs and conflict minerals reports in light of the D.C. Circuit’s April decision.

As the D.C. Circuit’s April decision created many interpretive questions that the Statement did not fully answer, issuers should stay tuned to see if CorpFin issues further disclosure guidance as the filing deadline nears.


1. See SEC, Order Issuing Stay In the Matter of Exchange Act Rule 13p-1 and Form SD, Rel. No. 34-72079 (May 2, 2014), available at http:// www .sec.gov/rules/other/2014/34-72079.pdf. Only the requirement that issuers report in a conflict minerals report to be filed with the SEC and posted on the issuer’s publicly available website that any of their products have “not been found to be ‘DRC conflict free’” is stayed. Please see our client alert dated May 2, 2014, SEC Issues Partial Stay of Conflict Minerals Rule.

2. nchorOrder, Nat’l Assoc. of Mfrs. v. SEC, No. 13-5252 (D.C. Cir. May 14, 2014).

3. nchorSee Keith F. Higgins, Director, SEC Div. of Corp. Fin., Statement on the Effect of the Recent Court of Appeals Decision on the Conflict Minerals Rule (Apr. 29, 2014), available at www.sec.gov/News/PublicStmt/Detail/PublicStmt/1370541681994. Please see our client alert dated May 2, 2014, The Conflict Minerals Rule: Important Recent Developments, for a discussion of the guidance provided in the Statement.

Copyright © 2022, Hunton Andrews Kurth LLP. All Rights Reserved.National Law Review, Volume IV, Number 136
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About this Author

Dudley W. Murrey, Corporate, Securities, Attorney, Andrews Kurth, Law firm
Partner

Dudley Murrey practices in numerous areas of corporate and securities law. He represents multinational companies and others in domestic, cross-border and international corporate finance transactions, including public and private securities offerings, structured finance transactions, commercial lending arrangements, and facility and equipment financings. Dudley regularly advises clients on securities law compliance, corporate governance matters and the implications of the Dodd-Frank Wall Street Reform and Consumer Protection Act for their businesses. In addition, he represents clients in...

214-659-4530
G. Michael O'Leary, Corporate Securities Attorney, Andrews Kurth, Law firm
Partner

Mike is a member of the Policy Committee and co-chair of the Corporate/Securities practice.

Mike has an extensive corporate securities and mergers and acquisitions practice with particular emphasis on representation of issuers and underwriters in public and private offerings of equity and debt securities; representation of buyers, sellers and special committees in mergers and acquisitions (domestic and foreign) and of private equity firms investments in energy and energy infrastructure; redemptions and exchanges of corporate debt; negotiating complex partnerships and joint ventures...

713-220-4360
Eric R. Markus, Corporate, Securities Attorney, Andrews Kurth, Law firm
Partner

Eric R. Markus is a partner in the firm's Corporate/Securities practice. Eric has a broad practice that encompasses complex corporate transactions, mergers and acquisitions, securities law compliance and debtor and creditor representations in bankruptcy proceedings.

The matters on which he has counseled clients include:

  • Private and public M&A transactions, including domestic and international targets
  • Complex securities regulatory matters concerning Sections 13 and 16 of the Securities Exchange Act of 1934
  • Negotiation and documentation of joint...
202-662-4009
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