Nat'l Ass'n of Mfrs. v. Sec. & Exch. Comm'n, No. 13–5252.

CourtUnited States Courts of Appeals. United States Court of Appeals (District of Columbia)
Writing for the CourtRANDOLPH, Senior Circuit Judge
Citation800 F.3d 518
PartiesNATIONAL ASSOCIATION OF MANUFACTURERS, et al., Appellants v. SECURITIES AND EXCHANGE COMMISSION, et al., Appellees.
Docket NumberNo. 13–5252.
Decision Date18 August 2015

800 F.3d 518

NATIONAL ASSOCIATION OF MANUFACTURERS, et al., Appellants
v.
SECURITIES AND EXCHANGE COMMISSION, et al., Appellees.

No. 13–5252.

United States Court of Appeals, District of Columbia Circuit.

Aug. 18, 2015.


800 F.3d 518

Peter D. Keisler, Jonathan F. Cohn, Erika L. Maley, Steven P. Lehotsky, Quentin Riegel, and Rachel L. Brand were on the briefs for appellants.

Michael A. Conley, Deputy General Counsel, Securities and Exchange Commission,

800 F.3d 519

Tracey A. Hardin, Senior Counsel, Benjamin L. Schiffrin, Senior Litigation Counsel, and Daniel Staroselsky, Senior Counsel were on the briefs for appellees.

Scott L. Nelson, Julie A. Murray, and Adina H. Rosenbaum were on the briefs for intervenors-appellees Amnesty International USA, et al.

Ronald A. Fein, David Hunter Smith, David N. Rosen, and Jodi Westbrook Flowers were on the brief for amici curiae Global Witness and Free Speech For People in support of appellees.

Before: SRINIVASAN, Circuit Judge, and SENTELLE and RANDOLPH, Senior Circuit Judges.

Opinion for the Court filed by Senior Circuit Judge RANDOLPH.

Dissenting opinion filed by Circuit Judge SRINIVASAN.

On Petitions For Panel Rehearing.

RANDOLPH, Senior Circuit Judge:

We assume familiarity with our opinion in National Association of Manufacturers v. SEC, 748 F.3d 359 (D.C.Cir.2014) (“NAM ”).1

The subject of this rehearing is the intervening decision in American Meat Institute v. U.S. Department of Agriculture, 760 F.3d 18 (D.C.Cir.2014) (en banc) (“AMI ”), and its treatment of Zauderer v. Office of Disciplinary Counsel of the Supreme Court of Ohio, 471 U.S. 626, 105 S.Ct. 2265, 85 L.Ed.2d 652 (1985).

Justice White, writing for the majority in Zauderer, expressed the Court's holding with his customary precision: we “hold,” he wrote, “that an advertiser's [First Amendment] rights are adequately protected as long as disclosure requirements are reasonably related to the State's interest in preventing deception of consumers.” Zauderer, 471 U.S. at 651, 105 S.Ct. 2265 (italics added). In several opinions, our court therefore treated Zauderer as limited to compelled speech designed to cure misleading advertising. Government regulations forcing persons to engage in commercial speech for other purposes were evaluated under Central Hudson Gas & Electric Corp. v. Public Service Commission, 447 U.S. 557, 564–66, 100 S.Ct. 2343, 65 L.Ed.2d 341 (1980), rather than Zauderer.2 See, e.g., R.J. Reynolds Tobacco Co. v. FDA, 696 F.3d 1205, 1213–17 (D.C.Cir.2012) ; Nat'l Ass'n of Mfrs. v. NLRB, 717 F.3d 947, 959 n. 18 (D.C.Cir.2013).3

800 F.3d 520

Our initial opinion in this case adhered to circuit precedent and declined to apply Zauderer on the ground that the “conflict minerals”4 disclosures, compelled by the Dodd–Frank law and the implementing regulations of the Securities and Exchange Commission, were unrelated to curing consumer deception. NAM, 748 F.3d at 370–71.

After our opinion in NAM issued, the en banc court in AMI decided that Zauderer covered more than a state's forcing disclosures in order to cure what would otherwise be misleading advertisements. AMI, 760 F.3d at 21–23. Some other governmental interests might suffice. Using Zauderer 's relaxed standard of review,5 AMI held that the federal government had not violated the First Amendment when it forced companies to list on the labels of their meat cuts the country in which the animal was born, raised, and slaughtered. Id. at 23, 27. It was of no moment that the governmental objective the AMI court identified as sufficient—enabling “consumers to choose American-made products,” id. at 23 —was one the government disavowed not only when the Department of Agriculture issued its regulations, but also when the Department of Justice defended them in our court, id. at 25 ; id. at 46–47 (Brown, J., dissenting).6 The AMI court therefore overruled the portion of our decisions in NAM, R.J. Reynolds , and National Association of Manufacturers v. NLRB holding that the analysis in Zauderer was confined to government compelled disclosures designed to prevent the deception of consumers.

In light of the AMI decision, we granted the petitions of the Securities and Exchange Commission and intervenor Amnesty International for rehearing to consider what effect, if any, AMI had on our judgment that the conflict minerals disclosure requirement in 15 U.S.C. § 78m(p)(1)(A)(ii) & (E), and the Commission's final rule, 77 Fed.Reg. 56,274, 56,362 –65, violated the First Amendment to

800 F.3d 521

the Constitution. See Order of November 18, 2014. For the reasons that follow we reaffirm our initial judgment.

Before we offer our legal analysis, a pervasive theme of the dissent deserves a brief response. To support the conflict minerals disclosure rule, the dissent argues that the rule is valid because the United States is thick with laws forcing “[i]ssuers of securities” to “make all sorts of disclosures about their products,” Dissent at 531. Charles Dickens had a few words about this form of argumentation: “ ‘Whatever is is right’; an aphorism that would be as final as it is lazy, did it not include the troublesome consequence, that nothing that ever was, was wrong.” Charles Dickens, A Tale of Two Cities 65 (Signet Classics) (1859). Besides, the conflict minerals disclosure regime is not like other disclosure rules the SEC administers. This particular rule, the SEC determined, is “quite different from the economic or investor protection benefits that our rules ordinarily strive to achieve.” Conflict Minerals, 77 Fed.Reg. 56,274, 56,350 (Sept. 12, 2012) (codified at 17 C.F.R. §§ 240.13p–1, 249b.400 ).7

As to the First Amendment, we agree with the SEC that “after AMI , whether Zauderer applies in this case is an open question.” Appellee Supp. Br. 10–11. NAM, in its initial briefing and in its supplemental brief on rehearing, argued that Zauderer did not apply to this case, not only because the compelled disclosures here were unrelated to curing consumer deception, but also because this government-compelled speech was not within the Supreme Court's category of “commercial speech.” Appellants Supp. Br. 18–19; Appellants Br. 53. NAM therefore argued that the commercial speech test of Central Hudson, 447 U.S. at 564–66, 100 S.Ct. 2343, also did not govern the First Amendment analysis in this case.

In our initial decision we did not decide whether the compelled speech here was commercial speech;8 we assumed arguendo

800 F.3d 522

that it was. NAM v. SEC, 748 F.3d at 372. Now on rehearing the question looms again. But before we may confront that broad issue, we address a narrower subsidiary question: whether Zauderer, as now interpreted in AMI , reaches compelled disclosures that are unconnected to advertising or product labeling at the point of sale.

To put the matter differently, even if the conflict minerals disclosures are categorized as “commercial speech,” it may not follow that Zauderer 's loose standard of review9 rather than the more demanding standard of Central Hudson determines whether the law violates the First Amendment rights of those who are subject to the government's edicts.

Conflict minerals disclosures are to be made on each reporting company's website and in its reports to the SEC. In the rulemaking, the SEC acknowledged that the statute—and its regulations—were “directed at achieving overall social benefits,” that the law was not “intended to generate measurable, direct economic benefits to investors or issuers,” and that the regulatory requirements were “quite different from the economic or investor protection benefits that our rules ordinarily strive to achieve.” 77 Fed.Reg. at 56,350.10

The SEC thus recognized that this case does not deal with advertising or with point of sale disclosures. Yet the Supreme Court's opinion in Zauderer is confined to advertising, emphatically and, one may infer, intentionally. In a lengthy opinion, the Court devoted only four pages to the issue of compelled disclosures. Zauderer, 471 U.S. at 650–53, 105 S.Ct. 2265. Yet in those few pages the Court explicitly identified advertising as the reach of its holding no less than thirteen times.11 Quotations in the preceding footnote prove that the Court was not holding that any time a government forces a commercial entity to state a message of the government's devising, that entity's First Amendment interest is minimal. Instead, the Zauderer Court—in a passage AMI quoted, 760 F.3d at 22 —held that the advertiser's “constitutionally protected interest in not providing any particular factual information in his advertising is minimal.” Zauderer, 471 U.S. at 651, 105 S.Ct. 2265 (last italics added).

800 F.3d 523

For these reasons the Supreme Court has refused to apply Zauderer when the case before it did not involve voluntary commercial advertising.12 In Hurley v. Irish–American Gay, Lesbian and Bisexual Group of Boston, 515 U.S. 557, 115 S.Ct. 2338, 132 L.Ed.2d 487 (1995), a unanimous Supreme Court treated Zauderer as a decision...

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44 practice notes
  • Loan Syndications v. Sec. & Exch. Comm'n, Civil Action No. 16–652 (RBW)
    • United States
    • United States District Courts. United States District Court (Columbia)
    • December 22, 2016
    ...v. SEC , 748 F.3d 359, 369 (D.C. Cir. 2014) (internal quotations and citations omitted), adhered to on reh'g Nat'l Ass'n of Mfrs. v. SEC , 800 F.3d 518 (D.C. Cir. 2015), overruled in part on other grounds by Am. Meat Inst. v. U.S. Dep't of Agric. , 760 F.3d 18 (D.C. Cir. 2014) ; see also S.......
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    • United States
    • United States District Courts. United States District Court (Columbia)
    • September 28, 2020
    ...petitions. See id. The D.C. Circuit has observed that a "sense of Congress" preamble may be non-binding, Nat'l Ass'n of Mfrs. v. SEC , 800 F.3d 518, 528 at n. 26 (D.C. Cir. 2015), citing Emergency Coal. to Def. Educ. Travel v. U.S. Dep't of the Treasury , 545 F.3d 4, 14 n. 6 (D.C. Cir. 2008......
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    • United States
    • United States District Courts. 8th Circuit. United States District Court of Minnesota
    • January 23, 2017
    ...is not the sort of self-demeaning statement that might otherwise violate the First Amendment. See Nat'l Ass'n of Manufacturers v. S.E.C. , 800 F.3d 518, 530 (D.C. Cir. 2015) (holding that a company was not required to "publicly condemn itself" by stating that it was unable to certify minera......
  • Am. Hosp. Ass'n v. Azar, Civil Action No. 1:19-cv-03619 (CJN)
    • United States
    • United States District Courts. United States District Court (Columbia)
    • June 23, 2020
    ...22 (D.C. Cir. 2014) (en banc).Plaintiffs argue that AMI should be read in light of National Association of Manufacturers v. SEC ("NAM "), 800 F.3d 518, 523 (D.C. Cir. 2015), which refused to apply Zauderer to "compelled disclosures that are unconnected to advertising or product labeling at ......
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37 cases
  • Loan Syndications v. Sec. & Exch. Comm'n, Civil Action No. 16–652 (RBW)
    • United States
    • United States District Courts. United States District Court (Columbia)
    • December 22, 2016
    ...v. SEC , 748 F.3d 359, 369 (D.C. Cir. 2014) (internal quotations and citations omitted), adhered to on reh'g Nat'l Ass'n of Mfrs. v. SEC , 800 F.3d 518 (D.C. Cir. 2015), overruled in part on other grounds by Am. Meat Inst. v. U.S. Dep't of Agric. , 760 F.3d 18 (D.C. Cir. 2014) ; see also S.......
  • Uranga v. U.S. Citizenship & Immigration Servs., Civil Action No. 20-0521 (ABJ)
    • United States
    • United States District Courts. United States District Court (Columbia)
    • September 28, 2020
    ...petitions. See id. The D.C. Circuit has observed that a "sense of Congress" preamble may be non-binding, Nat'l Ass'n of Mfrs. v. SEC , 800 F.3d 518, 528 at n. 26 (D.C. Cir. 2015), citing Emergency Coal. to Def. Educ. Travel v. U.S. Dep't of the Treasury , 545 F.3d 4, 14 n. 6 (D.C. Cir. 2008......
  • Safelite Grp., Inc. v. Rothman, Case No. 15–cv–1878 (SRN/KMM)
    • United States
    • United States District Courts. 8th Circuit. United States District Court of Minnesota
    • January 23, 2017
    ...is not the sort of self-demeaning statement that might otherwise violate the First Amendment. See Nat'l Ass'n of Manufacturers v. S.E.C. , 800 F.3d 518, 530 (D.C. Cir. 2015) (holding that a company was not required to "publicly condemn itself" by stating that it was unable to certify minera......
  • Am. Hosp. Ass'n v. Azar, Civil Action No. 1:19-cv-03619 (CJN)
    • United States
    • United States District Courts. United States District Court (Columbia)
    • June 23, 2020
    ...22 (D.C. Cir. 2014) (en banc).Plaintiffs argue that AMI should be read in light of National Association of Manufacturers v. SEC ("NAM "), 800 F.3d 518, 523 (D.C. Cir. 2015), which refused to apply Zauderer to "compelled disclosures that are unconnected to advertising or product labeling at ......
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5 firm's commentaries
  • SEC's Climate Risk Disclosure Proposal Likely To Face Legal Challenges
    • United States
    • Mondaq United States
    • May 12, 2022
    ...23 Central Hudson Gas & Elec. Corp. v. Pub. Serv. Comm'n of New York, 447 U.S. 557, 564-66 (1980); see also Nat'l Ass'n of Mfrs. v. SEC, 800 F.3d 518, 521 (D.C. Cir. 2015) (NAM II) (applying Central Hudson's intermediate scrutiny to speech compelled by the SEC's prior conflict mineral discl......
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    • United States
    • LexBlog United States
    • March 22, 2022
    ...than “voluntary commercial advertising” or “point of sale disclosures” is a matter of debate. See, e.g., Nat’l Ass’n of Mfrs. v. SEC, 800 F.3d 518, 522-24 (D.C. Cir. 2015). [39] Proposing Release at 27. [40] Some of these asset managers already try to gather the information the...
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    • United States
    • Mondaq United States
    • August 26, 2021
    ...Mfrs. v. Securities & Exchange Comm'n ("NAM I") 748 F.3d 359 (2014), National Assoc. of Mfrs. v. Securities & Exchange Comm'n ("NAM II"), 800 F.3d 518 15 NAM II, 800 F.3d at 530. 16 Id. at 531. 17 NAM I, 748 F.3d at 368. 18 15 U.S.C. §78m(a). 19 17 C.F.R. §230.405. 20 TSC Indus., Inc. v. No......
  • Evaluating Challenges To SEC's ESG Disclosure Proposal
    • United States
    • Mondaq United States
    • August 26, 2021
    ...Mfrs. v. Securities & Exchange Comm'n ("NAM I") 748 F.3d 359 (2014), National Assoc. of Mfrs. v. Securities & Exchange Comm'n ("NAM II"), 800 F.3d 518 15 NAM II, 800 F.3d at 530. 16 Id. at 531. 17 NAM I, 748 F.3d at 368. 18 15 U.S.C. §78m(a). 19 17 C.F.R. §230.405. 20 TSC Indus., Inc. v. No......
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4 books & journal articles
  • Can Climate Change Labels Be 'Purely Factual and Uncontroversial'?
    • United States
    • Environmental Law Reporter Nbr. 51-5, May 2021
    • May 1, 2021
    ...Agric., 760 F.3d 18, 27, 44 ELR 20173 (D.C. Cir. 2014) ( AMI ) (emphasis added). 8. National Ass’n of Mfrs. v. Securities & Exch. Comm’n, 800 F.3d 518, 528, 529 n.28, 45 ELR 20155 (D.C. Cir. 2015) ( NAM II ) (emphasis added) (rejecting the argument that “purely factual and uncontroversial” ......
  • The First Amendment Implications of a Mandatory Environmental, Social, and Governance Disclosure Regime
    • United States
    • Environmental Law Reporter Nbr. 48-11, November 2018
    • November 1, 2018
    ...760 F.3d 18, 22, 44 ELR 20173 (D.C. Cir. 2014). 83. See id . 84. See National Ass’n of Mfrs. v. Securities & Exch. Comm’n (NAM III), 800 F.3d 518, 522-24 (D.C. Cir. 2015). 85. See id . at 535 (Srinivasan, C.J., dissenting) (internal citations omitted). Copyright © 2018 Environmental Law Ins......
  • The SEC and Climate Risk.
    • United States
    • UCLA Journal of Environmental Law & Policy Vol. 40 Nbr. 1, June 2022
    • June 22, 2022
    ...Law: The Impact of Stakeholder Rhetoric on Corporate Norms, 31 J. Corp. L. 675 (2006). (55.) Nat'l Ass'n of Mfrs. v. S.EC. (NAM III), 800 F.3d 518 (D.C. Cir. (56.) Free Enter. Fund v. Pub. Co. Accounting Oversight Bd., 561 U.S. 477 (2010); Seila Law, LLC v. Consumer Fin. Protection Bureau, ......
  • Beyond 'Market Transparency': Investor Disclosure and Corporate Governance.
    • United States
    • Stanford Law Review Vol. 74 Nbr. 6, June 2022
    • June 1, 2022
    ...S-K, at 4 (Aug. 4,2016), https://perma.cc/WZ2B-C7PM. (423.) NAM Comment, supra note 208, at 2. (424.) Nat'l Ass'n of Mfrs. v. SEC, 800 F.3d 518,522,524 (D.C. Cir. (425.) CalPERS Comment, supra note 226, at 4. (426.) Marcie Frost, CalPERS, Comment Letter on Amendments to Exemptions from the ......

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