U.S. Steel, Nippon allege Biden violated constitution in lawsuit over blocked deal

U.S. President Joe Biden violated the Constitution by blocking Nippon Steel's $14.9 billion bid for U.S. Steel through a sham national security review, the companies alleged in a lawsuit they said was filed on Monday.

The companies want the federal court to scrap Biden's decision to scuttle the deal so they can secure another shot at approval through a fresh national security review unfettered by political influence.

The lawsuit alleges Biden prejudiced the decision of the Committee on Foreign Investment in the U.S. (CFIUS), which scrutinizes foreign investments for national security risks, and violated the companies' right to a fair review.

The merger had become highly-politicized ahead of the November U.S. presidential election, with both Democrat Biden and Republican President-elect Donald Trump pledging to kill it as they wooed voters in the swing state of Pennsylvania where U.S. Steel is headquartered. United Steelworkers (USW) union President David McCall opposed the tie-up.

Trump and Biden both asserted the company should remain American-owned even after the Japanese firm offered to move its U.S. headquarters to Pittsburgh, where the U.S. steelmaker is based, and promised to honor all agreements in place between U.S. Steel and the USW.

Biden sought to kill the deal to "curry favor with the USW leadership in Pennsylvania in his bid for reelection," the companies allege.

"As a result of President Biden's undue influence to advance his political agenda, the Committee on Foreign Investment in the United States failed to conduct a good faith, national security-focused regulatory review process," the companies said in a statement announcing the litigation.

The White House did not immediately respond to a request for comment.

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