Attorneys for U.S. Steel argued in federal court in Pittsburgh on Wednesday that statements by rival Cleveland-Cliffs and the head of the United Steelworkers union amounted to an illegal conspiracy intended to sabotage their merger with Nippon Steel.

But the defendants’ attorneys argued what their clients said about the potential merger is protected speech and does not rise to the level of any antitrust violation or interference.

U.S. District Judge Marilyn Horan said she will take their arguments under advisement and issue a decision as soon as possible.

U.S. Steel and Nippon Steel sued Cleveland-Cliffs, its CEO and the union president in January, alleging they were attempting to monopolize the steel market, undermine U.S. Steel’s vitality and acquire the company.

Cleveland-Cliffs offered to buy U.S. Steel in 2023 for $7 billion, but the offer was rejected. U.S. Steel then accepted Nippon’s all-cash offer for nearly $15 billion.

However, on Jan. 3, then-President Joe Biden blocked the sale, finding it was possible the sale to Japanese steelmaker Nippon could imperil national security.

U.S. Steel and Nippon have sued the federal government in Washington, D.C., as well, arguing Biden blocked the merger to serve his political agenda.

In that case, the plaintiffs have asked the court to set aside Biden’s order, as well as the decision by the Committee on Foreign Investment in the United States, and require a review of the deal consistent with the law.

In the suit filed in Pittsburgh on the same day, U.S. Steel and Nippon are seeking a preliminary injunction that would enjoin Cleveland-Cliffs and the steelworkers union president from participating in what they call their unlawful agreement to sabotage the merger — and any future deals.

Cleveland-Cliffs and the steelworkers’ head, at the same time, have asked the court to dismiss the complaint for failure to state a viable claim.

In the Pittsburgh suit, attorney Andrew Rossman, who represents Cleveland-Cliffs and CEO Lourenco Goncalves, told the judge that, to sustain their antitrust claims, U.S. Steel and Nippon have to show “conduct” on the defendants’ behalf that harmed their ability to make the deal with Nippon.

They can’t, Rossman said.

The only actions taken by Cleveland-Cliffs and the union, he continued, were protected speech — both in commenting on the merger and in petitioning the government to reject it.

“This is a war of words on both sides,” Rossman said. “Words do not violate antitrust laws.”

Attorney Joshua Shiffrin, representing union President David McCall, said his client lobbying against the merger in public statements is protected activity under labor law.

“The plaintiffs want you to police what the union can and cannot say in a labor dispute,” Shiffrin said.

There’s no conspiracy, Rossman told the court.

“There’s an alignment of interests,” he said.

Both men argued the harm suffered by U.S. Steel and Nippon comes from the government’s rejection of the merger — not from anything Cleveland-Cliffs and the union president did.

“The order is the sole source of their injuries,” Rossman said. “They can’t identify any harm that came from any of these statements.”

But attorney Jonathan Moses, representing U.S. Steel, told the court, if Cleveland-Cliffs and the union president are not stopped, they will continue to risk “irreparable and massive injury” to the plaintiffs — not only in deriding the Nippon-U.S. Steel merger but in scaring away other prospective bidders in the future.

Moses said the lawsuit in Pittsburgh has nothing to do with the government’s rejection of the merger deal.

In their complaint, U.S. Steel and Nippon accused the defendants of using “thuggish tactics” to “kill” the merger so Cleveland-Cliffs can, ultimately, take over U.S. Steel and maintain a monopoly in the steel market.

“We should not be forced to operate our business under the yoke of the defendants’ agreement,” Moses said.

He countered the argument Cleveland-Cliffs and the union president took no actions to further their agreement, citing a letter from Aug. 3 in which the union said it would endorse a deal with Cleveland-Cliffs and no one else.

“This is corporate action,” Moses said. “A union and a competitor preparing a hostile takeover bid is a smoking gun.”

He summarized the letter like this: “‘To whom it may concern, all non-Cliffs bidders, go away.’”

However the court in Washington, D.C., rules on the government’s rejection of the merger, U.S. Steel will either continue to work with Nippon Steel or seek another partner for a capital infusion, Moses said.

If Cleveland-Cliffs and the union aren’t stopped, he continued, they will continue to hobble U.S. Steel’s ability to be competitive.

“That is threatened harm to competition and markets, plain and simple,” Moses said. “No company in their right mind will sign up for what Nippon just went through.”

Attorney David Hennes, representing Nippon, said his client has also been harmed by the actions of Cleveland-Cliffs and the union president.

He cited phone calls, emails and letters as steps the defendants have taken in their effort to stop the merger.

“They’ve admitted this publicly … that their goal is to destroy this transaction,” Hennes said. “Absent an injunction, their campaign will continue.”

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