Help solve Exhaust/Suspension Interference

That's not on original OE arm. WHAT is moving vertically?..the entire assembly between the mounting ears, or the outer casting moving on the inner portion? If the entire unit, IE the inner portion moves between the ears then shim if necessary if tightening the bolt up won't cure it. If the inner is staying tight/still and the outer is rocking... it's worn out and needs replacing.