Thursday, November 7, 2013

CTS Corporation v. Dynamics Corporation of America case brief

CTS Corporation v. Dynamics Corporation of America case brief summary
481 U.S. 69 (1987)

Appellant, an Indiana corporation, challenged a decision of the United States Court of Appeals for the Seventh Circuit that affirmed a decision in favor of appellee national corporation finding that the Williams Act, 15 U.S.C.S. §§ 78M(d)-(e), 78n(d)-(f), pre-empted the Control Share Acquisitions Chapter of the Indiana Business Corporation Law, Ind. Code Ann. § 23-1-42-1 et seq.

CASE FACTS
Appellee announced that it would purchase one million shares of common stock, which would increase its ownership in appellant. Appellant's board of directors elected to be governed by the Control Share Acquisitions Chapter of the Indiana Business Corporation Law (Act), Ind. Code Ann. § 23-1-42-1 et seq. (Supp. 1986). Appellee filed an action against appellant, alleging that the Act was pre-empted by the Williams Act, 15 U.S.C.S. §§ 78m(d)-(e),78n(d)-(f) (1982 ed. and Supp. III). The trial court found in favor of appellee and the appellate court affirmed.

DISCUSSION

  • The Supreme Court found probable jurisdiction and reversed the appellate court's decision. 
  • The Court found that the Act evenhandedly determined the voting rights of shares of corporations and that the Act did not conflict with the provisions or purposes of the Williams Act. 
  • Therefore, the Court found that the Act was not pre-empted by the Williams Act.

CONCLUSION

The Supreme Court reversed the appellate court's decision when the Court found that the Control Share Acquisitions Chapter of the Indiana Business Corporation Law (Act) was not pre-empted by the Williams Act because the Act did not conflict with the provisions of the Williams Act.

Suggested Study Aids For Securities Regulation Law
Securities Regulation in a Nutshell, 10th (Nutshell Series)
Securities Regulation: Examples & Explanations, 5th Edition
Securities Regulations: The Essentials

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