Cleveland-Cliffs Inc.

Cleveland-Cliffs, the Ohio-based operator of iron ore mines, announced Friday that its shareholders have voted decisively against a proposal by hedge fund Harbinger Capital -- a proposal that might have allowed Harbinger to block Cleveland-Cliffs' planned acquisitionof Alpha Natural Resources.

Harbinger requested approval from the other shareholders to increase its stake in the company from 15.57% to 33%. Ohio law requires such approval when one party passes the 20% threshold.

In a statement Friday, Cliffs' chairman Joseph Carrabba said that he was pleased that the non-Harbinger shareholders "voted to retain their right to provide meaningful input on the future strategic decisions of the Company."

The management victory is a time to reflect on a point sometimes neglected in popularizing accounts of the US based M&A world. It isn't all Delaware. Delaware obviously is of great importance, but there are major corporations that have chosen to charter themselves in other states, due in large part to the differences in the pertinent laws.

Ohio's statute in particular -- aimed overtly at protecting Ohio-based companies from unfriendly takeover -- made news back in 2003, when Northrop Grumman managed to overcome such obstacles and acquire the local company TRW. Ohio's response? -- to raise to bar again, by adding an anti-arb provision.

I would imagine that Ohio's statutes have been challenged in federal court at some point on the theory that they burden interstate commerce, thereby violating the "dormant" exercise of Congress' constitutional power in that area.

Commerce in the sense of the "dormant commerce clause doctrine" has generally meant something more tangible -- the act of moving objects into one state from another for sale there. But what about the handicapping of out-of-state investors in the way Ohio seems to have in mind? My suspicion (unconfirmed by any actual research into the question) is that challenges have been launched on this point, and they have failed.

If any of my alert readers know of litigation on this constitutional point, I'd be happy to hear of it. Thanks.