Judge Denies Preliminary Injunction In Consumer Lawsuit Seeking To Block Paramount-Warner Bros. Discovery Merger

A federal judge has denied a group of consumers a preliminary injunction to at least temporarily block Paramount‘s proposed merger with Warner Bros. Discovery.

The judge, Araceli Martínez-Olguín, said that she is taking Paramount’s motion to dismiss the lawsuit under advisement.

The lawsuit was filed in April, one of the early legal challenges to the merger.

This week, attorneys general from California and 11 other states filed their own antitrust lawsuit, and Martínez-Olguín will take up their motion for a temporary restraining order at hearing on Friday.

In her remarks, the judge said that the consumers had failed to meet the threshold to order an immediate halt to the $110 merger.

“A preliminary injunction is an extraordinary remedy that may only be awarded upon a clear showing the plaintiff is entitled to such relief,” the judge said at the hearing. “Here, plaintiffs fail to meet that standard. Plaintiffs have not offered any evidence and this have not made a clear showing of a likelihood of success, nor to they make a clear showing of irreparable harm.”

In April, five pay-TV and streaming services subscribers filed a lawsuit challenging the merger, claiming, among other things, that the acquisition would increase prices and diminish the diversity of viewpoints. The lawsuit also seeks the divestiture of Skydance’s acquisition of Paramount Global last year.

In its filing seeking dismissal of the case, Paramount’s legal team argued that the plaintiffs — Pamela Faust, Len Marazzo, Lisa McCarthy, Deborah Rubinsohn and Gary Talewsky — do not have standing. They also argued that they failed to state a plausible claim of competitive harm from the merger.

Joseph Alioto, the lead attorney for the plaintiffs, argued that all that they had to show was “a threat to injury.” He cited the price hike for Paramount+ subscriptions after Skydance acquired the studio last year.

He argued that with the debt load that Paramount will take on with the acquisition, “there is no way they can get that unless, among other things, they raise the price.”

Paramount’s lead attorney, Jeffrey Kessler, said that “price increase cannot be attributed to merger seeking to enjoin because that merger has not been completed yet.” He told the judge that there was “no injury identified for these plaintiffs” in the lawsuit.

The judge also rejected plaintiffs’ request for expedited discovery. Alioto said that private plaintiffs “don’t get special privileges,” or access to merger materials, unlike the state of California or other government entities.