A small number of Paramount+ subscribers failed to win an order blocking the merger with Warner Bros. Discovery on Thursday, but a coalition of states plans to try again on Friday.
Plaintiffs filed suit in April, saying they faced higher prices and risked losing viewing options as a result of the deal. At a hearing Thursday, Judge Araceli Martinez-Holguin denied the motion for a preliminary injunction.
“This is an unusual preliminary relief, and the plaintiffs did not offer any evidence to support their claims,” the judge said. “Furthermore, I have serious doubts about the plaintiffs’ standing in pursuing these antitrust claims.”
Paramount will face a tougher test Friday as a coalition of 12 attorneys general seeks a temporary restraining order to halt the merger. The states filed suit Monday, claiming the $111 billion merger would hurt competition in the theatrical and basic cable markets.
Paramount filed a challenge early Thursday, arguing that the states were unlikely to succeed in the lawsuit and should not be granted the restraining order.
Paramount’s chief lawyer, Jeffrey Kessler, appeared in court in Oakland, California, on Thursday afternoon to argue against the subscribers’ lawsuit. He argued that the subscribers’ attorney, Joseph Alioto, had recently filed five similar lawsuits seeking to block the mega-merger, four of which involved some of the same plaintiffs, and all lost.
“It’s very clear in this circuit court and elsewhere that in order to obtain a preliminary injunction, you have to be clear with the evidence,” Kessler argued. “And without evidence, you can’t get a preliminary injunction.”
Paramount filed a motion to dismiss the lawsuit, which Martinez-Holguin accepted. She asked Alioto how he would amend the case if given the option. Alioto said he will seek to obtain evidence that has been turned over to attorneys general in California and other states.
“We are a private group,” he said. “We’re not the government. We don’t have the tools of the government.”
Alioto previously sued on behalf of private parties seeking to block the merger of Microsoft and Activision, Capitol One and Discover, Nippon Steel and U.S. Steel, Kroger and Albertsons, United Airlines and Continental, and T-Mobile and Sprint.
In response to Kessler’s claims about previous lawsuits, Alioto said, “That’s right. It’s true that the plaintiffs have filed other lawsuits, and we’re proud of them for doing so.”
“These materials were sent to me by Sen. Harry Reid because the Department of Justice does not object to these mergers,” he said.
The state attorney general and Paramount previously agreed to combine the private parties’ lawsuits with the state’s, meaning Martinez-Holguin would also handle state matters.
The Writers Guild of America also filed a federal antitrust lawsuit against the merger on Tuesday, while the Freedom of the Press Foundation and the Public Integrity Project filed a shareholder derivative suit in Delaware Chancery Court seeking to block the merger.
