Friday, November 22, 2013

WLR Foods, Inc. v. Tyson Foods, Inc. case brief

WLR Foods, Inc. v. Tyson Foods, Inc. case brief summary
65 F.3d 1172 (1995)

Defendants appealed a final order of the United States District Court for the Western District of Virginia, which denied relief to defendants, in plaintiff's action seeking declaratory relief regarding the constitutionality of Va. Code Ann. §§ 13.1-728.1 to -728.9, 13.1-725 to -727.1, 13.1-646, and 13.1-690.

Defendants, a poultry producer and its acquisition company, sought to acquire plaintiff, a chicken and turkey producer. Plaintiff adopted various defensive measures to protect itself from the takeover pursuant to the Control Share Acquisitions Act, Va. Code Ann. §§ 13.1-728.1 to -728.9; the Affiliated Transactions Act, Va. Code Ann. §§ 13.1-725 to -727.1; the Poison Pill Statute, Va. Code Ann. § 13.1-646; and the Business Judgment Statute, Va. Code Ann. § 13.1-690. Plaintiff sought declaratory judgment regarding the statutes' constitutionality. Defendants claimed the statutes were preempted by the Williams Act, 15 U.S.C.S. §§ 78m(d)-(e) and 78n(d)-(f). The district court denied defendants relief.


  • On appeal, the court affirmed because Virginia's decision to allow management access to a set of defensive mechanisms in the takeover situation did not frustrate the Williams Act's goal of investor protection and the statutes at issue did not violate the Commerce Clause, U.S. Constitutional art. I, § 8, cl. 3.

The order denying relief to defendants was affirmed because the lower court 's factual findings that the applicable statutes did not impermissibly restrict defendants' ability to take over plaintiff were proper, as statutes did not violate the Commerce Clause and there was no abuse of discretion in denying discovery of irrelevant evidence.

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