Edgar v. MITE Corp

In Edgar v. MITE Corp., 457 U.S. 624, 640, 102 S. Ct. 2629, 73 L. Ed. 2d 269 (1982) the Court implicitly stated that a state engages in prohibited "direct regulation" if its act constitutes more than mere incidental regulation of interstate commerce. The Court provided more helpful guidance in discerning the difference between a direct and indirect regulation by likening the dormant Commerce Clause's limitation on a state's power to enact substantive law to the limits on state courts' jurisdiction: "Any attempt 'directly' to assert extraterritorial jurisdiction over persons or property would offend sister States and exceed the inherent limits of the State's power." Id. at 643. Relying on this principle, the Edgar Court invalidated an Illinois statute that gave the state power to review and block a takeover offer for non-Illinois corporations with a specified Illinois connection. Id. at 643. The Court reasoned that tender offers involving nonresident shareholders constituted interstate commerce, which Illinois purported to directly regulate although it had no legitimate interest in protecting such shareholders. Id. at 642-43.