Logourl black

CTS Corporation v. Dynamics Corporation of America

United States Supreme Court
481 U.S. 69 (1987)


Facts

Indiana passed a law (Indiana Act) requiring a majority vote of all disinterested shareholders in a corporation to give voting rights to an entity that acquires “control shares” in the corporation—an amount of shares that would bring the entity’s amount of shares above 20, 33 1/3, or 50 percent. This gave the minority shareholders a chance to consider the fairness of the tender offer collectively to make a well-informed decision in their best interests. Under the Indiana Act, the shareholders must vote on whether to grant the voting rights to the acquirer within 50 days of the acquisition. Dynamics Corporation of America (Dynamics) (plaintiff) owned 9.6 percent of the stock of CTS Corporation (CTS) (defendant) when it announced a tender offer for another million shares of CTS, an amount that would have brought Dynamics’s ownership interest above the 20 percent threshold under the Indiana Act. Dynamics brought suit alleging that the Indiana Act was preempted by the federal Williams Act, and that the Indiana Act violated the Commerce Clause. The Williams Act was passed to regulate hostile tender offers and protect minority shareholders by putting them “on an equal footing with the takeover bidder.” The Williams Act required (1) the offeror to disclose certain information about the offer and the offeror’s business, and (2) certain procedural rules, including a requirement that the offer remain open for at least 20 business days. Dynamics argued, among other things, that the 50-day allowance under the Indiana Act conflicted with this 20-day period. The district court ruled that the Williams Act preempted the Indiana Act and that the Indiana Act violated the Commerce Clause. The court of appeals affirmed. CTS appealed.

Rule of Law

The rule of law is the black letter law upon which the court rested its decision. To access this section, start your 7-day free trial of Quimbee for Law Students.

Issue

The issue section includes the dispositive legal issue in the case phrased as a question. To access this section, start your 7-day free trial of Quimbee for Law Students.

Holding and Reasoning (Powell, J.)

The holding and reasoning section includes:

  • A “yes” or “no” answer to the question framed in the issue section;
  • A summary of the majority or plurality opinion, using the CREAC method; and
  • The procedural disposition (e.g. reversed and remanded, affirmed, etc.).

To access this section, start your 7-day free trial of Quimbee for Law Students.

Concurrence (Scalia, J.)

The concurrence section is for members only and includes a summary of the concurring judge or justice’s opinion. To access this section, start your 7-day free trial of Quimbee for Law Students.

Dissent (White, J.)

The dissent section is for members only and includes a summary of the dissenting judge or justice’s opinion. To access this section, start your 7-day free trial of Quimbee for Law Students.

Here's why 94,000 law students rely on our case briefs:

  • Reliable - written by law professors and practitioners not other law students.
  • The right length and amount of information - includes the facts, issue, rule of law, holding and reasoning, and any concurrences and dissents.
  • Access in your class - works on your mobile and tablet.
  • 12,592 briefs - keyed to 169 casebooks.
  • Uniform format for every case brief.
  • Written in plain English - not in legalese and not just repeating the court's language.
  • Massive library of related video lessons - and practice questions.
  • Ability to tag case briefs in an outlining tool.
  • Top-notch customer support.
Start Your Free Trial Now