When Commissioners Daniel M. Gallagher and Michael S. Piwowar released this Joint Statement on the Conflict Minerals Decision on April 28, 2014, I wondered where it would go. The answer is it went in this motion for a stay of the conflicts minerals rules filed by the National Association of Manufacturers, or NAM, and the other petitioners, with the SEC on April 29, 2014.
The part of the motion I like best is:
“Indeed, the entire purpose of the rule and statute was to try to effect social change by publicly shaming companies through forcing them to label certain products as not “DRC conflict free.” Now that the shaming mechanism has been struck down on First Amendment grounds, the remainder of the rule has questionable benefits. The Commission must therefore re-assess whether the rule complies with the requirements of 15 U.S.C. § 78w(a)(2), which bars “any rule,.. which would impose a burden on competition not necessary or appropriate,” and 15 U.S.C. §78c(f), which requires the Commission to “consider, in addition to the protection of investors, whether the action will promote efficiency, competition and capital formation.” At a minimum, the Commission should preserve the status quo while it reconsiders whether to require billions of dollars in expenditures for a purported benefit that no longer exists.”
I put it in the “Hail Mary” category because SEC Chair Mary Jo White, per TheCorporateCounsel.net, told a Congressional committee that the SEC will continue to implement the bulk of its conflict minerals rule despite the recent ruling by the US Court of Appeals for the DC Circuit, and Keith Higgins of Corporation Finance has issued his edict to issuers to file.
But a Hail Mary is sometimes successful, as it was when the Business Roundtable, also a petitioner in the conflicts minerals case, petitioned the SEC for a stay of the proxy access rules.
And a Hail Mary isn’t necessarily a waste of time. The NAM petition asks for action on the motion by May 1, 2014 (which I am assuming didn’t happen because of the lack of public announcement) so that the petitioners may promptly proceed to court to seek appropriate relief if a stay is not granted. About all the petitioners have to do is change the caption on the motion and reformat it a little bit to file as threatened.
So far no indication in the dockets (as near as I can tell) of NAM proceeding or the SEC filing for an en banc hearing.