Cleveland-Cliffs and its CEO Lourenco Goncalves, along with United Steelworkers union president David McCall, have filed a motion to dismiss a lawsuit filed by Nippon Steel and U.S. Steel, calling the legal action retaliatory and infringing on their First Amendment rights.

In a court filing on Tuesday, the defendants argued that the plaintiffs' claims of antitrust violations and tortious interference were without merit. The lawsuit was initially brought in January 2023 after Cleveland-Cliffs and its executives publicly criticized Nippon Steel’s $14.9 billion acquisition of U.S. Steel, which was ultimately blocked by President Joe Biden. The lawsuit claims that the defendants engaged in a campaign to sabotage the merger and undermine U.S. Steel's competitive edge.

A Bold Rejection of Lawsuit Claims

The motion to dismiss argued that the criticisms leveled by Cleveland-Cliffs and its executives were protected by the First Amendment. The defendants contended that their public remarks about the proposed deal, including statements calling it "dead" before official reviews, were lawful expressions of concern about national security and economic stability.

“Despite the inflammatory nature of the plaintiffs’ accusations, their claims are rooted in their displeasure with defendants’ speech, not unlawful actions,” the brief stated. “The First Amendment gives the defendants the right to speak freely about matters of public concern, especially when it involves matters of national security.”

The Government’s Role in the Blocked Deal

The proposed sale was blocked after the Committee on Foreign Investment in the United States (CFIUS) raised alarms over potential risks to U.S. national security and the domestic steel industry. Biden’s decision was based on concerns that the merger could lead to a decrease in steel production in the U.S., which would negatively affect national supply chains.

According to the lawsuit, Cleveland-Cliffs and Goncalves used "false" statements and "anticompetitive tactics" to derail the merger, claiming that Cleveland-Cliffs was trying to monopolize the steel industry by weakening U.S. Steel’s position.

The Steelworkers Union Defends Its Campaign

The United Steelworkers union also came to the defense of Cleveland-Cliffs, saying its public campaign was solely intended to highlight national security risks tied to the proposed deal. In a statement, the union emphasized that its actions were a lawful exercise of its First Amendment rights to influence government policy.

“We were doing our duty to warn elected officials and the American public about the risks of this deal, which could have hurt our workers and U.S. national security,” McCall said. "This lawsuit is nothing but a frivolous attempt to silence us."

The Legal Battle Continues

Despite the motion to dismiss, the lawsuit remains unresolved, and a court date is set for March 12 for oral arguments on the matter. U.S. Steel has expressed confidence in its legal position and vowed to continue pursuing the case.

“We will not back down in our pursuit to expose illegal conduct by Cleveland-Cliffs, which we believe is attempting to monopolize the North American steel industry," a U.S. Steel spokesperson said. “We’re confident the facts are on our side.”

Meanwhile, Cleveland-Cliffs and Nippon Steel have yet to respond to further requests for comment.

A Push for Reversal

In addition to the lawsuit, Nippon and U.S. Steel are seeking to reverse Biden’s decision to block the deal. The companies argue that political interference tainted the review process, and they are requesting a new examination of the merger by the U.S. government.