2AMERICA, and NATIONAL FOREIGN TRADE COUNCIL, for their Complaint againstDefendant UNITED STATES SECURITIES AND EXCHANGE COMMISSION allege, by andthrough their attorneys, on knowledge as to Plaintiffs, and on information and belief as to allother matters, as follows:
This is a lawsuit under the First Amendment to the United States Constitution,and under the Administrative Procedure Act, 5 U.S.C. § 500
(“APA”), challenging a rulerecently promulgated by the U.S. Securities and Exchange Commission (“SEC” or “Commission”), and the statutory provision authorizing that rule.2.
By a 2-1 vote (with two recusals), the Commission approved a rule requiring public companies to disclose certain payments of more than $100,000 when made to foreigngovernments for “projects” relating to the commercial development of oil, natural gas, or minerals.
Disclosure of Payments by Resource Extraction Issuers, 77 Fed. Reg. 56,365(Sept. 12, 2012) (“Extractive Industries Rule” or “Rule”). Disclosures must also be maderegarding payments to the federal government.
By the Commission’s own reckoning, the Rule will cost U.S. public companies atleast $1 billion in initial compliance costs and $200 to $400 million in ongoing compliance costs,and “could add billions of dollars of [additional] costs” through the loss of trade secrets and business opportunities.
77 Fed. Reg. at 56,398, 56,412. The rulemaking record shows thatthe costs will actually be far greater, as U.S. oil and mining companies are forced to allowcompetitors access to sensitive commercial information, and to abandon projects to foreign state-owned companies in countries that forbid the disclosures or that simply refuse to do businesswith U.S. companies because they do not wish the disclosures to be made. Indeed, while theCommission did not quantify how many “billions of dollars” more its Rule might cost U.S.
Case 1:12-cv-01668-JDB Document 1 Filed 10/10/12 Page 2 of 39