The DC Circuit's decision in NAM v. SEC, which partially struck down the SEC's conflict mineral disclosure rule is doubtless an important decision. But let's not get carried away. If anyone thinks that the conflict minerals case presages constitutional invalidation of the mandatory disclosure, they would be reading way too much into the opinion.
First, it seems clear that the court is not foreclosing all conflict mineral disclosure rules, just this one. See footnote 14 of the majority opinion:
The requirement that an issuer use the particular descriptor “not been found to be ‘DRC conflict free’” may arise as a result of the Commission’s discretionary choices, and not as a result of the statute itself. We only hold that the statute violates the First Amendment to the extent that it imposes that description requirement. If the description is purely a result of the Commission’s rule, then our First Amendment holding leaves the statute itself unaffected.
Second, note the majority's discussion of SEC v. Wall Street Publishing Institute at page 20-21 of the opinion. It rather clearly suggests that SEC securities regulation that plausibly can be linked to preventing consumer deception will be reviewed under the commercial speech standards.
Third, note the concurrence/dissent's discussion of the pending American Meat Institute v. United States Department of Agriculture case. As Judge Srinivasan notes, the en banc panel in that case "will receive supplemental briefing on the question whether review of 'mandatory disclosure' obligations can 'properly proceed under Zaudere' even if they serve interests 'other than preventing deception.'" The panel decision here assumes that the answer to that question is no. But what if it is yes?
Finally, beyond the scope of the present decision, there are lots of precedents suggesting that the constitutonality of the basic mandatory disclosure regime is beyond peradventure. See, e.g., Ohralik v. Ohio State Bar Ass'n 436 U.S. 447, 456 (1978) (stating in dicta that: Numerous examples could be cited of communications that are regulated without offending the First Amendment, such as the exchange of information about securities . . . .”); Paris Adult Theatre I v. Slaton, 413 U.S. 49, 61-62 (1973) (noting that “both Congress and state legislatures have ... strictly regulated public expression by issuers of and dealers in securities ... commanding what they must and must not publish and announce”); Full Value Advisors, LLC v. SEC, 633 F.3d 1101 (D.C. Cir. 2011) (“Securities regulation involves a different balance of concerns and calls for different applications of First Amendment principles.” ); United States v. Bell, 414 F.3d 474, 484-85 (3d Cir. 2005) (holding that the government may regulate speech so as to prevent consumer deception and, accordingly, that “mandatory disclosure of factual, commercial information does not offend the First Amendment”); Blount v. SEC, 61 F.3d 938, 944-47 (D.C. Cir. 1995) (holding that the SEC's anti-pay to play Rule G-37 survived strict First Amendment scrutiny); SEC v. Wall St. Publ'g Inst., Inc., 851 F.2d 365, 374-76 (D.C. Cir. 1988), cert. denied, 489 U.S. 1066 (1989) (holding that an investment newsletter could be required to disclose whether it was being paid to run an article touting a stock article).
In sum, don't bet the house on a constitutional challenge to mandatory disclosure.
