Edgar v. MITE Corp.

Supreme Court of the United States · 1982 · Corporations

457 U.S. 624 (1982)

Updated August 1, 2026

Corporationsstate takeover statutesWilliams Acttender offersstate takeover statutepreemptionSupremacy ClauseCommerce Clause

Facts

Illinois required takeover offers for certain target companies to be registered with the Secretary of State, imposed a 20-business-day precommencement period during which the offeror could not communicate the offer to shareholders, authorized administrative hearings that could delay the offer, and allowed the Secretary to deny registration if the offer was inequitable. MITE, a Delaware corporation with principal offices in Connecticut, began a cash tender offer for all shares of Chicago Rivet, a publicly held Illinois corporation, and filed the required federal Schedule 14D-1 but did not comply with the Illinois Act. After the Illinois Secretary of State moved to enforce the Act, the District Court enjoined enforcement, and MITE published a nationwide tender offer to all Chicago Rivet shareholders. The Secretary indicated he intended to enforce the Act against MITE, exposing MITE to possible civil and criminal liability if the federal judgment were reversed.

Issue

Whether the Illinois Business Take-Over Act is unconstitutional because it is pre-empted by the Williams Act and because it violates the Commerce Clause. A threshold issue was whether the case was moot after MITE withdrew its tender offer.

Rule

A state takeover statute is pre-empted when, though compliance with both state and federal law is possible, the state law stands as an obstacle to the full purposes and objectives of Congress embodied in the Williams Act, including investor protection through neutrality between management and bidder and avoidance of undue delay. Under the Commerce Clause, a State may not directly regulate or interdict interstate commerce or project its law extraterritorially, and even indirect regulation is invalid if the burden on interstate commerce is clearly excessive in relation to the putative local benefits under Pike.

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One of 10 multiple-choice questions for this case. Pick an answer to see why.

Cascade Peak Capital, a Nevada corporation based in Denver, plans a nationwide cash tender offer for all shares of Harbor Forge, a publicly held Oregon corporation with shareholders in many states. Oregon law requires an offeror to file the offer with a state commissioner and give Harbor Forge 15 business days' advance notice before the offer may be communicated to shareholders, but management may contact shareholders during that period.

If Cascade Peak challenges the Oregon statute, which is the strongest argument that the advance-notice provision is invalid?

Explanation. The majority treated precommencement notice as obstacle preemption, not impossibility preemption. A state law conflicts with the Williams Act when it stands as an obstacle to Congress's objectives, including neutrality between management and bidder and avoidance of undue delay. Requiring advance notice to the target while barring communication to shareholders gives management a powerful tactical advantage that Congress deliberately declined to create.