In its suit against the US government, Nippon Steel asked
the court to set aside Biden's order on Friday blocking the buyout,
and to instruct the Committee on Foreign Investment in the United States
(CFIUS) to conduct a new review of the US$14.9 billion deal for Nippon Steel to
purchase US Steel.
There has never been a case where a prominent Japanese company
has sued the US president.
A statement on the lawsuit released Monday by Nippon Steel
and US Steel claimed the month-long review by CFIUS, an interagency panel that
reviews potential economic security concerns regarding foreign companies'
investment, violated the constitutional guarantee of due process.
Nippon Steel, together with its wholly owned subsidiary
Nippon Steel North America and US Steel, filed the petition with the US Court
of Appeals for the District of Columbia Circuit against CFIUS as well as Biden,
CFIUS Chairperson and Treasury Secretary Janet Yellen, and Attorney General
Merrick Garland.
According to the statement, Biden, whose Democratic Party
draws strong support from labor unions, "ignored the rule of law" to
try to achieve his own political objective of winning the US presidential
election in 2024 with support from the USW.
The companies said they were "disappointed" to see
"a clear and improper exploitation of the country's national security
apparatus in an effort to help win an election and repay political
favors."
Nippon Steel also plans to argue that certain processes were
unreasonable -- namely that CFIUS demanded the company's response in a shorter
period than is standard and did not engage in substantive discussions that
offered any counterproposals or written comment to its proposals to address
security concerns.
Nippon Steel and two other companies have filed a separate
civil suit in the US District Court for the Western District of Pennsylvania
against Cleveland-Cliffs, its CEO Lourenco Goncalves, and USW President David
McCall, alleging they were "engaging in a coordinated series of
anticompetitive and racketeering activities" to block the acquisition as a
part of "an illegal campaign to monopolize critical domestic steel
markets."
Cleveland-Cliffs is the second-largest steel company in the
US. It announced its intention to acquire US Steel, but it was outbid by Nippon
Steel.
"The illegal agreement is part of a 'merge or murder'
strategy by which Cliffs has sought to force an anticompetitive merger with US
Steel or severely weaken it as a competitor," Nippon Steel said.
Nippon Steel argues that Cleveland-Cliffs, Goncalves and
McCall's "anticompetitive and unlawful actions were brazen and obvious --
consisting of public lies, pressure tactics, and an illegal antitrust
conspiracy."
The company is seeking injunctions of such activities and
substantial damages.
Nippon Steel believes evidence of these actions can be
presented as grounds for the administrative litigation against Biden and
others. Using an unusual multiple-suit approach, the company intends to gather
evidence through the civil lawsuit for the administrative lawsuit.
The Japanese company also believes there is evidence that
Cleveland-Cliffs and the USW, which wanted to prevent the acquisition, had
multiple exchanges of correspondence with Biden, including ones that indicate
the existence of a deal for the USW to announce its support for Biden, and
later for Vice President Kamala Harris, in the presidential election if the
acquisition by Nippon Steel was blocked.
Nippon Steel said it would hold a news conference in Tokyo
on Tuesday.
Biden's order to block the deal has roused criticism from
the Japanese government. Japanese Prime Minister Shigeru Ishiba said in a news
conference on Monday that the incident has prompted the nation's industrial
sector to "voice concerns about future investments between the US and
Japan."
"This is something we must take very seriously,"
Ishiba said. "It would be inappropriate for the Japanese government to
comment on the management of individual companies that have been under review
under U.S. domestic law, but we would like to urge the U.S. government to take
action to eliminate these concerns."
Minister of Economy, Trade and Industry Yoji Muto told
reporters on Monday that Biden's decision was "extremely regrettable and
difficult to understand." The minister said he "personally lobbied
the Biden administration" to address the strong concerns of the Japanese
business community about investment in the U.S., adding that "strong
economic ties form the foundation of bilateral relations."
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