1. CTS Corp. v. Dynamics Corp. of Am., (1987)
2. Facts: Indiana passed a corporate takeover law which stated that should any party acquire a controlling interest in the number of shares he held, he could only acquire voting rights on those shares to the extent approved by a majority vote of the prior disinterested stockholders.
3. Procedural Posture: The lower court held that the law was unconsitutional as being a hindrance to tender offers, and thus an interstate commerce burden.
4. Issue: Whether the Indiana law is unconstitutional as being in conflict with the dormant Commerce Clause.
5. Holding: No.
6. ∆ Argument: Tender offers should generally be favored because they represent a shifting of property rights to their highest value use. Also, the state of Indiana has no interest in protecting non-resident shareholders.
7. Majority Reasoning: A state has the fundamental right ot pass laws concerning the regulation of corporations it establishes. They are only unconsitutional if they discriminate against interstate commerce. Since this law has the same effect on interstate commerce as well as intrastate commerce, meaning that all shareholders and tender offers are treated the same regardless of locality, then it does not discriminate. The state regulation of corporations necessarily has some effect on interstate commerce, since the shares are traded internationally. However, there is stability in knowing that the corporation is subject to one set of regulations - that of its home state.
8. Concurrence Reasoning: [Scalia] stated that there was no consitutional basis for any balancing test when determining whether a local interest outweighs a federal interest. Whether the burden on commerce imposed by a statute is excessive in relation to its benefit is a question for the legislature, not the judiciary.
