Judge refuses to end lawsuit by U.S. Steel, Nippon against Cleveland-Cliffs

Despite the successful $14.9 billion merger of U.S. Steel and Nippon Steel, attorneys for both companies said Wednesday they plan to proceed with a lawsuit against steelmaker Cleveland-Cliffs and the head of the United Steelworkers union for allegedly conspiring against them to try to block the deal.

Cleveland-Cliffs had been a suitor for U.S. Steel but was ultimately refused in favor of the deal with Nippon.

During a status conference Wednesday in federal court in Pittsburgh, U.S. District Judge Marilyn Horan said some of the issues laid out in the original complaint filed in March are likely moot because of the merger.

However, she did not preclude U.S. Steel and Nippon from potentially filing an amended complaint seeking damages from Cleveland-Cliffs and the leadership of the steelworkers union.

Horan gave the plaintiffs 45 days to file a motion to amend.

“I think you need a cleaned-up complaint that deals with the issues on the table,” Horan told the parties, urging them to work together to find common ground. “Look at the lay of the land right now — what really is the benefit of continuing to litigate on these issues?

“Moving forward in a constructive way is often more beneficial than the litigation process.”

U.S. Steel and Nippon filed a federal lawsuit in March alleging Cleveland-Cliffs, its president, Lourenco Goncalves, and United Steelworkers President David McCall, were conspiring to monopolize the steel market and sabotage the potential merger.

In 2023, Cleveland-Cliffs offered $7 billion to buy U.S. Steel, but the company rejected the bid. It later accepted Nippon’s all-cash offer — although the Biden administration blocked the sale in January.

However, in May, President Donald Trump gave his blessing to the merger subject to a number of provisions, including that the federal government can block Nippon from reducing pledged capital investment, transferring jobs from the country, acquiring competing businesses or closing existing facilities.

During the status conference, Jonathan Moses, a lawyer for U.S. Steel, said the companies still plan to pursue their civil claims because their clients were harmed economically by the defendants.

“These damages are real, and they exist because of this illegal agreement,” Moses said, referring to the alleged conspiracy. “That illegal agreement caused harm — even if it didn’t succeed in prohibiting the merger. I don’t think it’s mooted those damages claims.”

Andrew Rossman, who represents Cleveland-Cliffs, said the initial lawsuit was “preposterous,” should never have been filed and should not be permitted to be amended.

“It has gone from a case that should not have been brought to a case that is no longer a live controversy,” Rossman said. “Their claims are all moot.”

Rossman argued that since the merger has been completed, there’s nothing left to be litigated in the civil case.

“From our perspective, this case is dead and buried. It should be dismissed.”