In a federal lawsuit filed earlier this week, Nippon Steel and U.S. Steel allege Cleveland-Cliffs, its CEO and the president of the United Steelworkers International engaged in an anticompetitive conspiracy to prompt U.S. Steel to either merge with Cleveland-Cliffs “or be murdered.”

Separate lawsuits filed Jan. 6 in the U.S. Court of Appeals for the District of Columbia and the U.S. District Court for the Western District of Pennsylvania, come as a challenge to President Joe Biden’s decision to block Japan-based Nippon Steel’s acquisition of the Pittsburgh-based U.S. Steel, alleging the head of the United Steelworkers union and the CEO of fellow steel producer Cleveland-Cliffs spearheaded a movement to have the deal thrown out.

“Cliffs knows that the pending merger with NSC (Nippon Steel Corporation) will present it with a formidable competitor and that U.S. Steel must pursue other strategic alternatives to remain as competitive if the merger fails,” the suit states.

The suit claims leadership at Cliffs, which has a plant in Butler Township, and the United Steelworkers spearheaded an “unlawful campaign to monopolize critical steel markets,” destroy the plaintiffs ability to compete and cause them billions of dollars in damages.

The same “thuggish tactics” would be used against any bidder that would have attempted to purchase U.S. Steel, according to the suit.

“Cliff’s threat to U.S. Steel is plain: merge with Cliffs or be murdered,” said the suit, which names Cleveland-Cliffs, its CEO Lourenco Goncalves and David McCall, the president of the United Steelworkers International as defendants.

U. S. Steel, Nippon Steel and Nippon Steel North America are the plaintiffs.

“As of this morning, Nippon Steel and U.S. Steel continue to play the blame game in a desperate attempt to distract from their own failures,” Goncalves said in a statement on Jan. 6. “Today’s lawsuits against the U.S. Government, the USW, and Cleveland-Cliffs represent a shameless effort to scapegoat others for U.S. Steel’s and Nippon Steel’s self-inflicted disaster. U.S. Steel’s executives did not get their personal payouts.

“Now that it is clear that they have miserably failed the very shareholders they always say they work for, they are lashing out with petulance as a result. Once again, bad course of action.”

Goncalves had not responded to request for comment by the Butler Eagle as of press time.

In the suit, Nippon and U.S. Steel allege that a Cleveland-Cliffs deal with U.S. Steel would deepen Cliffs’ already established stranglehold on the United States steel industry.

The plaintiff’s argument points to Cleveland-Cliffs’ $2.8 billion purchase of Canadian steel maker Stelco in July 2024.

With the purchase of Stelco, Cleveland-Cliffs effectively controls as much as 79% of U.S. iron ore reserves and 70% of North American reserves.

The plaintiffs argue that the Stelco deal supplies Cleveland-Cliffs with “a platform to interfere with U.S. Steel’s efforts to develop its direct reduced iron capabilities at its Minntac mine,” located in Minnesota.

The suit claims Cleveland-Cliffs admitted that its Stelco acquisition was designed to protect and strengthen its market power, with Cliffs’ senior vice president of finance Paul Finan saying during a meeting with investors Sept. 5 that “this industry needs consolidation.”

Cleveland-Cliffs already has a tight grip on various sectors within the United States steel industry, controlling almost half North America’s blast furnace steel making capacity and half the production of exposed automotive steel, according to the suit.

The company also controls 100% of North American commercial production of electrical steel, the suit said.

The Cleveland-Cliffs Butler Works facility is the nation’s leading producer of grain-oriented electrical steel (GOES), which is an essential component in transformers critical to the U.S. electrical grid.

U.S. Steel says it is an “emerging competitor” in the grain-oriented electrical steel market, and expansion into that market would be the “next logical step” for the company, because it is involved in GOES supply chain through its European operations in Slovakia where it produces coil products for its production, according to the suit.

The suit goes on to say a deal between U.S. Steel and Cleveland-Cliffs would further its stranglehold on the GOES sector, which would create higher prices for buyers.

In July 2023, the lawsuit claims Goncalves and Cleveland-Cliffs engaged U.S. Steel with an unsolicited bid for the company, at a valuation of $35 per share, half in cash and half in Cleveland-Cliffs stock, which would have given U.S. Steel a $10 billion valuation at the time.

Then, in August 2023, the plaintiffs allege USW leadership wrote a letter to U.S. Steel saying the union would “unequivocally endorse” Cleveland-Cliffs’ bid and “not endorse anyone other than Cliffs,” in a bid for U.S. Steel.

In the months that followed, the plaintiffs allege Cleveland-Cliffs and the USW used various intimidation tactics to force U.S. Steel into the deal, claiming the USW would veto any other company’s deal with the U.S. Steel.

Nippon Steel was also interested in buying U.S. Steel and offered a deal at $55 per share, all in cash, with the goal to acquire the company through its American subsidiary, Nippon Steel North America, the suit details.

On Dec. 17, 2023, the U.S. Steel board unanimously approved the deal, and it was announced the following day, thus starting the alleged “campaign of lies” by the defendants, according to the suit.

The day the deal was announced, Goncalves appeared on CNBC to “bad mouth the deal,” and criticize potential foreign ownership, the suit said.

The suit says as part of a misinformation campaign by the defendants, Cleveland-Cliffs and the USW stated that Nippon Steel will not invest enough money into U.S. Steel facilities.

Nippon Steel however has said a deal with U.S. Steel would bring an investment of $2.7 billion in the company’s aging blast furnace operations in Gary, Ind., and Pennsylvania’s Mon Valley, and said it is best positioned to help the U.S. compete in an industry dominated by the Chinese.

U.S. Steel has warned that, without Nippon Steel’s cash, it will shift production away from the blast furnaces to cheaper nonunion electric arc furnaces and move its headquarters out of Pittsburgh.

However, the suit claims Nippon’s deal with U.S. Steel would keep the company’s headquarters in Pittsburgh, with an additional plan to bring Nippon Steel North America’s headquarters to the city.

A deal would also result in “no layoffs and no idling or closures of any existing U.S. Steel facilities under operation at the time of closing except in extraordinary circumstances,” the suit said.

President Biden’s decision to block the U.S. Steel and Nippon deal came via executive order Jan. 3, with a number of voices on both ends of the political spectrum advising his decision.

While administration officials have said the decision was unrelated to Japan's relationship with the U.S. — this is the first time a U.S. president has blocked a merger between U.S. and Japanese firms.

Biden stopped the takeover after federal regulators were deadlocked on whether to approve it — because “a strong domestically owned and operated steel industry represents an essential national security priority. … Without domestic steel production and domestic steel workers, our nation is less strong and less secure,” he said in a statement.

With Biden leaving office in less than two weeks, Nippon will also face an incoming administration that has also vowed to block the acquisition.

President-elect Donald Trump in December 2024 relayed his intention to block the deal, and pledged to use tax incentives and tariffs to strengthen the American steelmaker.

Shortly after the lawsuits were filed, Trump reiterated that stance on his Truth Social platform.

“Why would they want to sell U.S. Steel now when tariffs will make it a much more profitable and valuable company?” the post said. “Wouldn’t it be nice to have U.S. Steel, once the greatest company in the world, lead the charge toward greatness again? It can all happen very quickly!”

In an recent interview with Jim Cramer on CNBC’s “Mad Money,” Goncalves did allude to U.S. Steel remaining on its own after all is said and done.

“At this point, tariffs are coming,” Goncalves said. “President Trump will change the backdrop of the entire industry. I’m not so sure if the best outcome is the combination of Cliffs and U.S. Steel. Maybe the best outcome is Cliffs stands alone, and U.S. Steel stands alone and continue to compete like we have always been doing.”

The Associated Press contributed to this report.