WASHINGTON (Legal Newsline) -- A federal judge earlier this week upheld a rule adopted by the U.S. Securities and Exchange Commission, and mandated by the Dodd-Frank Wall Street Reform and Consumer Protection Act, requiring companies to publicly disclose their use of so-called "conflict minerals."
The minerals, originating in the Democratic Republic of the Congo and adjoining countries, are mined in conditions of armed conflict and human rights abuses.
The SEC rule, adopted by the commission in August 2012, is designed to make sure the minerals and their profits don't benefit groups responsible for violence in the region.
The 2010 Dodd-Frank regulatory overhaul directed the SEC to issue rules requiring certain companies to disclose their use of conflict minerals that include tantalum, tin, gold or tungsten if those minerals are "necessary to the functionality or production of a product" manufactured by those companies.
Companies are required to provide this disclosure on a new form to be filed with the SEC called Form SD.
Under the rule, issuers are required to file for the same period -- a calendar year -- regardless of when their fiscal year ends.
According to the SEC, companies will file their first specialized disclosure report on May 31, 2014 for the 2013 calendar year and annually on May 31 every year thereafter.
In his 63-page memorandum opinion Tuesday, Judge Robert L. Wilkins -- who last month was nominated by President Barack Obama for a seat on the U.S. Court of Appeals for the District of Columbia Circuit -- said the rule "passes muster."
"Finding no problems with the SEC's rulemaking and disagreeing that the 'conflict minerals' disclosure scheme transgresses the First Amendment, the Court concludes that Plaintiffs' claims lack merit," wrote Wilkins, who currently sits on the U.S. District Court for the District of Columbia.
The plaintiffs in the case -- the National Association of Manufacturers, the U.S. Chamber of Commerce and the Business Roundtable -- challenged various aspects of the SEC rule as "arbitrary" and "capricious" under the federal Administrative Procedure Act.
They also claimed that the disclosures run afoul of the First Amendment.
The Chamber's Institute for Legal Reform owns Legal Newsline.
From Legal Newsline: Reach Jessica Karmasek by email at firstname.lastname@example.org.
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