On November 18, 2014, the U.S. Court of Appeals for the D.C. Circuit granted the SEC’s motion to rehear the court’s decision in NAM v. SEC. As covered in previous blog posts, the court’s NAM decision held that portions of the SEC’s conflict minerals reporting requirements run afoul of the First Amendment. The D.C. Circuit’s ruling in a subsequent case, American Meat Institute v. U.S. Department of Agriculture, questioned the standard of review that the court applied in the NAM case.
The American Meat case considered whether the scope of the standard of review for claims of government compelled speech established by the Supreme Court in the Zauderer v. Office of Disciplinary Counsel (1985) case. The Zauderer standard is more relaxed than it was in Central Hudson Gas & Electric v. PSC of New York (1980). Under Zauderer, if a government disclosure requirement is “purely factual” and “non-controversial” there must be a “reasonable fit” or “reasonable proportion” between the means and the ends. The conflict minerals court declined to apply the Zauderer standard of review outside of consumer deception, whereas the American Meat court held that Zauderer does in fact “reach beyond problems of deception.”
On rehearing, the court will, at a minimum, consider three questions: (i) what effect, if any, the American Meat ruling has on the First Amendment issue at hand in the conflict minerals case regarding the disclosure requirement; (ii) what is the meaning of purely factual and uncontroversial information as used in Zauderer; and (iii) is the determination of what comprises “uncontroversial information” a question of fact? If the court determines that the Zaurderer standard applies to the conflict minerals rules, the court will then have to determine whether the rules constitute unconstitutional compelled speech under the Zauderer standard.