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U.S. Steel and Nippon Steel laid out their case Monday that then-President Joe Biden hamstrung a national security review to justify blocking the companies’ merger.
An opening brief filed in the U.S. Court of Appeals for the District of Columbia claimed the companies had their due process rights violated when Biden pledged in March to block the Japanese steelmaker’s proposed $14.9 billion takeover of U.S. Steel. His announcement came before the Committee on Foreign Investment in the United States even started its probe into any potential national security risks.
Biden’s influence, the companies allege, led the committee to barely engage with them to mitigate concerns and, in December, issue a vague report that allowed him to nix the deal the following month.
A green light from the committee would have bypassed Biden and permitted the deal.
The lawsuit also calls Biden’s decision into question as driven by election-year politics, not national security — in particular his effort to gain a critical labor union’s support for his reelection campaign in the battleground state of Pennsylvania.
Leadership from the United Steelworkers union — representing about 75% of employees at the Pittsburgh-based manufacturer — immediately ripped the deal as “greedy” and “short-sighted” when it was announced in December 2023.
The companies are asking the court to throw out Biden’s decision and initiate a second national security review — a tall, but not unprecedented ask.
A 2014 ruling by the same D.C. court found then-President Barack Obama deprived the Chinese-owned Ralls Corp. of its due process rights by blocking its acquisition of several wind farms on national security grounds.
Ralls and the U.S. government settled out of court about a year later.
Court briefs on U.S. Steel and Nippon’s case against the Committee on Foreign Investment in the United States will be completed by March 17, according to a press release from the companies.
Litigation will take an expedited track, they said, suggesting the court will reach a decision before the June 18 deadline given by the Biden administration to unwind the deal.
The companies have filed an accompanying lawsuit in Pittsburgh against Cleveland-Cliffs and that steel manufacturer’s CEO, Lourenco Goncalves, as well as United Steelworkers International President David McCall, alleging attempts to undermine the merger and boost Cleveland-Cliffs’ odds of acquiring U.S. Steel.
They’re seeking an injunction to prevent further intervention from Goncalves and McCall.
Goncalves said in a freewheeling press conference last month his company, which made a past bid for for U.S. Steel, remains interested in an acquisition. A potential offer would reportedly come in around $10 billion and involve Nucor, another major domestic steelmaker.
Jack Troy is a TribLive reporter covering the Freeport Area and Kiski Area school districts and their communities. He also reports on Penn Hills municipal affairs. A Pittsburgh native, he joined the Trib in January 2024 after graduating from the University of Pittsburgh. He can be reached at jtroy@triblive.com.
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