After a year spent tussling with its closest domestic rival, U.S. Steel may finally have the chance to publicly detail its frustrations with Cleveland-Cliffs, even as the Ohio steelmaker rejects allegations that it did anything inappropriate.

A lawsuit filed by the Pittsburgh steelmaker Monday in the U.S. District Court for the Western District of Pennsylvania alleges that Cliffs used public statements and backchannel negotiations to derail U.S. Steel’s proposed merger with Japan’s largest steelmaker, Nippon Steel.

Documents filed in the case accuse Cliffs’ Chief Financial Officer Celso Goncalves of falsely telling bankers that Nippon Steel planned to shut down U.S. Steel’s unionized mills and shift work to non-union mills. In addition, the filings allege, he boasted about having the complete support of the United Steelworkers union in opposing the $14.9 billion deal, influencing President Joe Biden’s decision last week to block the merger.

Biden called United Steelworkers International President David McCall on Nov. 7, two days after the election, asking if the union chief still wanted the deal blocked, according to an account by Cliffs’ CEO Lourenco Goncalves during a call with investors the next day that was cited in the complaint; McCall affirmed.

As far back as February — when the Ohio steelmaker was still angling for a portion of U.S. Steel’s assets that it first bid on in July 2023 — the lawsuit claims that Cleveland-Cliffs officials and their associates taunted Nippon Steel with claims that they had inside information that the U.S. government would block the purchase.

“Cleveland-Cliffs’ efforts to thwart the transaction extend far beyond the kind of ordinary lobbying activity” that is legally protected, lawyers for U.S. Steel and Nippon argued in the Monday filing.

Goncalves called the litigation baseless and, in a written response Monday, said he looked forward to “exposing the facts in court."

The lawsuit is one of two filed this week following Biden’s move to block the merger. In Washington, D.C., U.S. Steel and Nippon jointly filed suit, arguing that the president’s move violates the constitution and was the result of “unlawful political influence.”

The president acted after the Committee on Foreign Investment in the United States — a federal panel created to screen deals for national security risks — was unable to agree on a recommendation.

Monday’s court filing in Pittsburgh included extensive documentation of U.S. Steel’s argument that Cleveland-Cliffs officials’ actions were anticompetitive and unlawful.

In December, the Post-Gazette reported that Cliffs had worked closely with its union to try to derail the merger, including through conversations with senior government officials who were vetting the deal for national security risks.

Lawyers for U.S. Steel and Nippon had previously called on the Department of Justice to investigate what it called “exclusionary practices” by Cliffs that would potentially create an illegal monopoly in violation of Section 2 of the Sherman Act.

After a failed meeting between Nippon’s vice chairman and McCall in July, the Japanese steelmaker brought on former U.S. Rep. Dick Gephardt to try to improve negotiations. The former U.S. Steel board member was unable to sway McCall. Nor was Gov. Josh Shapiro, who brokered a meeting in November.

The union chief’s intransigence came despite sweetened offers from Nippon Steel to protect jobs and invest in U.S. Steel facilities — promises that slowly won over skeptical union members.

If the legal fight by U.S. Steel and Nippon does not save the merger, the Pittsburgh steelmaker’s engagements with the government point to potential next steps. “Without this transaction, Mon Valley Works will continue to shrink and eventually shutter,” the company told federal regulators vetting the deal for national security risks.

The loss of Nippon’s investments would leave a “severely battered” company that would be forced to shift operations from Pennsylvania’s outdated blast furnaces to newer electric arc furnace-based facilities in Arkansas, U.S. Steel said.

The company indicated it would quickly idle a blast furnace at Gary Works in Indiana and could move its headquarters out of Pennsylvania.

U.S. Steel said management and its board have been considering such moves since 2019.

Before the Nippon deal was announced, other bids had been made for U.S. Steel’s operations.

McCall, who had supported a merger with Cleveland-Cliffs, said after the Nippon deal was blocked that he looked forward to reviewing future bids for U.S. Steel.

The U.S. Steel board rejected Cliffs’ initial bid in 2023 in part because of concern that such a merger would create a monopoly that would be blocked by regulators.

During the bidding process, Cliffs told investors it believed Biden would instruct his antitrust chief Jonathan Kanter to waive those concerns, according to the complaint by U.S. Steel and Nippon.

Now analysts say they expect Cliffs to make a new offer for U.S. Steel but say the timing of a bid is uncertain. U.S. Steel said in its complaint that it is also monitoring the risk of activist shareholders taking over the company and breaking it apart if the deal fails.

Goncalves, the Cliffs CEO, told Fox Business on Tuesday that he wasn’t interested in making a higher bid. “(The) situation has changed. The backdrop of the market changed,” he said, adding that he didn’t expect President-elect Donald Trump to reverse Biden’s decision.

The incoming president has said that tariffs, not a foreign purchase, will make U.S. Steel great again.

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