JSW Steel (USA) Inc. and JSW USA Steel Ohio, Inc. today announced the filing of a federal court lawsuit in the Southern District of Texas against three of the largest domestic steel companies, Nucor Corp., United States Steel Corp., and Cleveland-Cliffs, Inc., including its recent acquisition, AK Steel Holding Corp.
The lawsuit alleges that the defendant companies conspired to boycott and refused to supply plaintiffs with a critical feedstock (domestic semi-finished steel slab) beginning in 2018 and continuing until today. The plaintiffs allege that defendants' cartel cost them hundreds of millions of dollars in lost profits, increased their expenses and caused them other damages, and also led to higher prices and significant harm to US steel buyers and significantly fewer jobs for U.S. steelworkers.
Parth Jindal, JSW Steel (USA) Board member, said that the defendants have long been the dominant US steel companies and used and continue to use anticompetitive tactics against smaller producers like JSW to succeed at all costs. He said, “We bought into the US market a few years ago and made significant progress in improving our facilities and performance. In 2018, we announced our intention to make substantial investments to further expand and upgrade our facilities. These companies derailed those plans, and so we file this suit today to respond assertively. As we allege, they stated repeatedly that they could make semi-finished steel slab in the quantities and quality to meet our needs and that they were willing to sell it to us, but when we tried to get them to move forward, they dragged things out and made excuses. We are now convinced that it was all for show and that, in reality, they never intended to make or sell steel slab to us.”
Board member John Hritz added, “We would have had a state-of-the art facility in Baytown, Texas up and running by now that would have literally set the standard for green steel production in this country and the world. The project would have resulted in hundreds of good, secure jobs for the next few decades. It would have resulted in billions of dollars in economic benefit in the state of Texas alone. Our costs of production would have plummeted and our production would have increased dramatically, meaning US customers would have had more environmentally sound steel products at much better prices.”
However, Hritz said the defendants, who account for more than two-thirds of all US steel production, “would have faced stiffer competition. That's what they were afraid of, apparently, and we are convinced that is why they took the steps alleged in the Complaint.”
Group boycotts are illegal, Mr. Hritz explained, because they erode competition, raise consumer prices, and disadvantage law-abiding businesses like JSW that seek to compete on a level playing field. “JSW, US steel buyers, and steelworkers all bore the brunt of the defendants' actions,” said Hritz. “And who benefited? Defendants. They repeatedly announced record profits over the last few years. We will not sit by and let their conduct stand.”
The plaintiffs' complaint is based upon the federal antitrust laws and Texas state laws as well. It seeks treble damages, which are automatic under the federal antitrust laws, compensatory and exemplary damages, and attorneys' fees and costs. The plaintiffs are represented in the case by the law firm of Baker Botts LLP.