The House Financial Services Committee approved by a 30-26 vote Sept. 13 a wide-ranging bill that among other things would eliminate the requirement for companies to disclose whether their products contain conflict minerals and overturn a Supreme Court ruling allowing courts to defer to regulatory agencies’ interpretations of ambiguous federal laws.
Conflict Minerals. Under the 2010 Dodd-Frank Act, companies that file reports with the Securities and Exchange Commission under the Securities and Exchange Act of 1934, whether foreign or domestic, must file a specialized disclosure report disclosing their use of tantalum, tin, gold, or tungsten originating in the Democratic Republic of the Congo or an adjoining country if those minerals are necessary to the functionality or production of a product they manufacture or contract to manufacture. The minerals at issue are used to make a variety of goods such as cell phones, computers and video game systems, medical equipment, high-speed tools, machine parts, glass and lamps.
A committee summary of the bill (H.R. 5983, the Financial CHOICE Act) states that this law imposes “enormous compliance costs” on public companies but “has not illuminated companies’ sourcing of conflict minerals to any meaningful degree.” In fact, the summary asserts, the law has harmed the citizens of Central Africa, “the very region it purports to help,” by leading to a de facto embargo on the region’s minerals. Further, the summary states, aspects of the law have been found unconstitutional by a federal court. As a result, H.R. 5983 would repeal the conflict minerals disclosure requirements.
Judicial Deference. In Chevron U.S.A., Inc. v. Natural Resources Defense Council the Supreme Court held that if a law passed by Congress is silent or ambiguous with respect to a particular issue, the courts should defer to a reasonable interpretation (i.e., one that is not arbitrary, capricious, or manifestly contrary to the statute) by the agency responsible for enforcement. This principle has been extensively utilized since that time, including in customs and trade litigation.
The bill summary asserts that this decision sparked a trend in which “federal courts have refused to fulfill their constitutional responsibility to interpret and apply the laws as Congress has written them,” resulting in a situation in which “agencies now have virtually unfettered power to expand the scope of their own authority by regulatory fiat.” According to the summary, H.R. 5983 would end the practice of judicial deference to agency interpretations. The House approved a similar stand-alone bill (H.R. 4768) in July.
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