David McCall, President of the United Steelworkers (USW) union, has filed a motion to dismiss the lawsuit brought against him by U.S. Steel and Nippon Steel. The lawsuit was initiated following the blocking of a $14.9 billion bid for U.S. Steel by Nippon Steel, which was halted by then-President Joe Biden earlier this year.
Key Highlights:
Background of the Lawsuit:
The lawsuit, filed in January, accuses McCall, rival bidder Cleveland-Cliffs, and its CEO Lourenco Goncalves of “illegal and coordinated actions” designed to thwart Nippon Steel’s acquisition of U.S. Steel.
The companies claim this was aimed at allowing Cleveland-Cliffs to monopolize key steel markets.
Union’s Response:
The USW has characterized the lawsuit as a “frivolous and unsubstantiated attack” on the union, asserting that it is their First Amendment right to oppose mergers that could negatively impact union members and national security.
The union emphasized its responsibility to speak out against such deals, framing it as both a right and duty.
Statements from the Companies:
Nippon Steel has declined to comment on the matter.
U.S. Steel, in its statement, indicated it would respond to the motion to dismiss and remains committed to pursuing its claims, asserting that there are “no valid legal defenses to that illegal conduct.”
Political Context:
Biden’s decision to block the merger was made on national security grounds, with enforcement delayed pending a separate legal challenge from the companies.
The proposed merger became a focal point in the political landscape leading up to the November U.S. presidential election, with both Biden and former President Donald Trump expressing intentions to terminate the deal.
Union’s Position:
The USW opposed the merger due to concerns over transparency and job security, despite efforts from Nippon Steel to address these issues.
The union has shown support for Cleveland-Cliffs, which is reportedly collaborating with Nucor to prepare a potential all-cash bid for U.S. Steel.
Legal Developments:
Cleveland-Cliffs also filed a motion on Tuesday to dismiss the lawsuit against itself and Goncalves.
McCall’s motion was filed in the Western District of Pennsylvania.