Antitrust Law Daily Wrap Up, ACQUISITIONS & MERGERS—N.D. Cal.: Consumer antitrust challenge to Nippon—U.S. Steel merger again dismissed for lack of standing, (Mar 18, 2026)

By Kenneth H. Ryesky, M.B.A., J.D.

The judge's opinion parenthetically invites clarification, in an appropriate future case, on the issue of whether the Illinois Brick case bars indirect claims for equitable relief.

A federal district court judge in San Jose, California has dismissed a repleaded complaint to divest the merger of the Nippon Steel Corporation and the United States Steel Corporation. The court had previously dismissed the initial complaint to enjoin and/or divest the then-proposed acquisition transaction before the merger was completed, but had given leave to replead. The court found that the plaintiffs did plead Article III standing in "a close call," but the court dismissed the case for failure to plead antitrust injury. The dismissal was with prejudice because the amended complaint failed to cure the faults in the original complaint and any further amendment would be futile (Freeland v. Nippon Steel Corp., No. 5:25-cv-01240-EKL (N.D. Cal. Mar. 17, 2026)).

Background. Nippon Steel Corporation (Nippon), the world's fourth-largest steel producer, entered into an agreement to acquire the United States Steel Corporation (US Steel), the third-largest U.S.-based steel manufacturer (and formerly the world's largest corporation in its heyday). On February 5, 2025, a group of individuals filed a lawsuit under Section 7 of the Clayton Act [15 U.S.C. § 18] seeking to enjoin the completion of the acquisition; the injunction was denied and the merger was consummated on June 18, 2025. On June 20, 2025, the court, finding that the plaintiffs lacked both Article III standing and antitrust standing, granted the Nippon's dismissal motion and the case was dismissed, with leave to amend. On July 7, 2025, the plaintiffs filed an amended complaint. On March 17, 2026, the court ruled on the dismissal motion to the amended complaint.

Article III standing. The court found that the plaintiffs plausibly alleged Article III standing. Here, the plaintiffs alleged that they are purchasers and/or users of products manufactured from steel and/or containing steel components, and that the merger will result in a consolidated market and a likely increase the price of steel, which would cause the individual plaintiffs increased out-of-pocket expenses as economic injuries. Although arguably attenuated, the court found that this allegation sufficed as a plausible pleading at this stage, but cautioned that the plaintiffs "would likely face significant challenges in proving traceability at later stages in the case."

Antitrust standing. The judge found that the plaintiffs did not plausibly plead antitrust injury and therefore lacked antitrust standing. The relevant product market alleged by the plaintiffs was "manufacturing, distribution and sale of steel and steel products," with the United States being the relevant geographic market. But the court noted that none of the individual plaintiffs "buy steel directly from U.S. Steel or any other steelmaker, nor do they buy steel indirectly from customers of steelmakers, such as steel refineries," but are "indirect consumers of" items made with steel, and are not participants in the relevant market they defined. Moreover, the plaintiffs did not clearly allege that Nippon competed in the United States geographic market prior to the merger. The court also noted that more direct market participants, including other steelmakers in the United States, could have brought (and would have had incentive to bring) suit to enjoin the merger under the antitrust laws but apparently have not done so.

The Case is No. 5:25-cv-01240-EKL.

Judge: Lee, E.

Attorneys: Joseph M. Alioto (Alioto Law Firm) for Donald Freeland. David B. Hennes (Ropes & Gray LLP) for Nippon Steel Corp.

Companies: Nippon Steel Corp.

Cases: Antitrust AcquisitionsMergers CaliforniaNews