The State of California v. Paramount Skydance CorporationThe State of California v. Paramount Skydance Corporation
This is an antitrust case. Plaintiffs, the State of California, State of Arizona, State of Colorado, State of Connecticut, Commonwealth of Massachusetts, State of Minnesota, State of Nevada, State of New Jersey, State of New Mexico, State of New York, State of Oregon, and State of Washington (collectively, the “Plaintiff States“), bring this lawsuit under the
Due to the expedited nature of the motion for TRO and the parties’ desire for speedy resolution of the motion, the Court only summarizes the facts relevant to disposition of the motion.1
Paramount is a global media conglomerate registered in Delaware and headquartered in New York. Paramount‘s portfolio includes Paramount Pictures (one of the “big five” Hollywood film studios); the CBS broadcast network; basic cable channels (including Nickelodeon, Comedy Central, MTV, and BET); the Showtime premium cable channel; and the Paramount+ streaming service. Compl. ¶¶ 32, 35. Warner Bros. is a global media conglomerate also registered in Delaware and headquartered in New York. Warner Bros.‘s portfolio includes Warner Bros. Pictures studio (another of the “big five” Hollywood film studios); basic cable channels; the HBO premium cable channel; and the HBO Max and Discovery+ streaming services. Compl. ¶¶ 33, 35. Both Paramount and Warner Bros. maintain studio lots and production facilities in California, where they also employ thousands of California residents. Compl. ¶ 17.
On February 27, 2026, Paramount and Warner Bros. agreed that Paramount would acquire all Warner Bros.‘s outstanding shares for $31 per share for a total transaction value of approximately $110 billion. Compl. ¶ 34. The combined entity would control two of the “big five” film studios (Paramount Pictures and Warner Bros. Pictures), more than fifty basic cable channels spanning every major programming genre, leading premium cable television channels (HBO and Showtime), the most-watched broadcast network (CBS), three subscription streaming services (Paramount+, HBO Max, and Discovery+), and three of the most prolific television production studios (Paramount Television Studios, CBS Studios, and Warner Bros. Television Studios). Compl. ¶ 35; Lee Decl. ¶¶ 9, 42-43, 127-128, fig. 17.
The Plaintiff States filed this lawsuit, as well as the instant motion seeking a TRO, on July 13, 2026. Dkt. Nos. 1, 27. The Plaintiff States move to enjoin Paramount and Warner Bros
II. DISCUSSION
To obtain preliminary injunctive relief, the moving party must show: (1) a likelihood of success on the merits, (2) a likelihood of irreparable harm to the moving party in the absence of preliminary relief, (3) the balance of equities tips in the favor of the moving party, and (4) an injunction is in the public interest. Winter v. Natural Res. Def. Council, Inc., 555 U.S. 7, 20 (2008). Where the government is a party, courts merge the analysis of the final two Winter factors, the balance of equities and the public interest. Drakes Bay Oyster Co. v. Jewell, 747 F.3d 1073, 1092 (9th Cir. 2014) (citing Nken v. Holder, 556 U.S. 418, 435 (2009)). Courts “explore the relative harms to applicant and respondent, as well as the interests of the public at large.” Barnes v. E-Sys., Inc. Grp. Hosp. Med. & Surgical Ins. Plan, 501 U.S. 1301, 1305 (1991) (internal quotation marks and citation omitted). The Winter factors may be evaluated on a sliding scale, such that preliminary relief may be issued when the moving party demonstrates “that serious questions going to the merits were raised and the balance of hardships tips sharply in the plaintiff‘s favor.” All. for the Wild Rockies v. Cottrell, 632 F.3d 1127, 1134-35 (9th Cir. 2011) (citation omitted).
A. Likelihood of Success
The Plaintiff States bring a single claim for violation of Section 7 of the Clayton Act,
At the first step, a merger that would result in “a significant increase in the concentration of firms in that market” establishes a presumption that the merger “is so inherently likely to lessen competition substantially that it must be enjoined in the absence of evidence clearly showing that the merger is not likely to have such anticompetitive effects.” United States v. Philadelphia Nat‘l Bank, 374 U.S. 321, 363 (1963). Demonstrating that a merger would result in “a significant increase in the concentration of firms in that market” establishes a presumption that the merger will substantially lessen competition. Philadelphia Nat‘l Bank, 374 U.S. at 363; Baker Hughes, 908 F.2d at 982. Courts rely on two metrics to assess market concentration – the proposed
Here, Plaintiffs present compelling evidence that the combined firm resulting from the transaction will possess substantial market share in the wide-release theatrical distribution market. See Lee Decl ¶¶ 83, 88, 89 (anticipating 27% market share for wide-release theatrical distribution market). On this combined firm market share alone, the Court is persuaded that it can presume the proposed merger is likely to violate antitrust laws. See Boardman v. Pacific Seafood Grp., 822 F.3d 1011, 1021 (9th Cir. 2016) (a “prima facie case can be established simply by showing” that such “a high market share would result from the proposed merger“); see also United States v. H&R Block, Inc., 833 F. Supp. 2d 36, 72 (D.D.C. 2011) (concluding plaintiffs established a presumption of anticompetitive effects where the combined firm would hold a 28.4 percent market
Defendants focus their opposition to Plaintiff States’ motion on the second stage of the burden-shifting analysis. Defendants present the expert opinion of a competing economic expert for the premise that Plaintiff States’ showing falls short regarding both theatrical film-focused markets due to fundamental misunderstandings and incorrect assumptions regarding the economics of theatrical film distribution in the United States. See Dkt. No. 114 at 18-24 (citing Murphy Decl.). Defendants further argue that the absence of significant entry barriers in the theatrical market undermines the Plaintiff States’ showings regarding market concentration. Id. Moreover, Defendants rely on the expert for the premise the Plaintiff States’ showing similarly fails because it rests on false assumptions regarding activity in the market for licensing basic cable channels to distributors. Id. Defendants’ proof, contrary to the matter of United States v. General Dynamics Corp., 415 U.S. 486 (1974), on which they rely so heavily, Dkt. No. 114 at 19, does not establish that the merger would not substantially lessen competition. At best, Defendants’ proof regarding these robust, dynamic markets creates disputes regarding the facts and legality of the Transaction‘s market effects. At this stage, crediting Defendants’ evidence and stopping short of
Plaintiff States’ showing at least demonstrates that serious questions going to the merits remain, weighing in favor of preliminary injunctive relief.
B. Irreparable Harm
Under Ninth Circuit law, “[a] lessening of competition constitutes an irreparable injury.” Boardman, 822 F.3d at 1023. Because the Plaintiff States make a strong showing that the Transaction will substantially lessen competition in the wide-release theatrical distribution market, they demonstrate irreparable harm would result if a TRO does not issue. The Transaction would also be difficult, if not impossible, to unwind if permitted to proceed given the anticipated consolidation of operations, sharing of business-sensitive information, and potential termination or reassignment of employees. See United States v. Trib. Publ‘g Co., No. 16-cv-1822-AB, 2016 WL 2989488, at *5 (C.D. Cal. Mar. 18, 2016); Penn State Hershey, 838 F.3d at 352-53 (“since it is extraordinarily difficult to ‘unscramble the egg,’ ‘it will be too late to preserve competition if no preliminary injunction has issued.’ ” (citations and footnote omitted)). The Plaintiff States have sufficiently established that irreparable harm would result in the absence of a TRO.
C. Balance of Equities & Public Interest
The public interest and the balance of hardships inquiries are interrelated and both weigh in favor of an injunction. The Ninth Circuit recognizes that appropriate enforcement of the antitrust laws for the protection of competition is “vital to the public interest.” Boardman, 822 F.3d at 1024 (quoting Knevelbaard Dairies v. Kraft Foods, Inc., 232 F.3d 979, 988 (9th Cir. 2000)). Indeed, “[i]n a Government case the proof of the violation of law may itself establish sufficient public injury to warrant relief.” California v. Am. Stores Co., 495 U.S. 271, 295 (1990). Further, the public interest includes ensuring the practical availability of “effective relief” remains
Defendants did not offer a countershowing of private equities in opposition to the Plaintiff States’ motion. Defendants will suffer no apparent harm in the near term if enjoined from consummating the Transaction – they concede that they will not begin to incur carrying costs for a delayed merger until the end of September 2026. See, e.g., Dkt. No. 64 (proposing August hearing schedule); Dkt. No. 65-2. Even if Defendants argued that they would suffer economic harm as a result of delaying the merger, the equities do not weigh in their favor when contrasted with the potential public harms that would result from consummation of the Transaction, including the loss of competition. See FTC v. Warner Commc‘ns Inc., 742 F.2d 1156, 1165 (9th Cir. 1984) (“Although private equities may be considered, public equities receive far greater weight.“) (citing FTC v. Weyerhaeuser Co., 665 F.2d 1072, 1083 (D.C. Cir. 1981)). Paramount and Warner Bros. will continue to operate as separate, viable companies competing in the marketplace while they wait for the Court to adjudicate this case. The balance of equities, combined with the public‘s vital interest in antitrust enforcement, therefore tips sharply in favor of the requested injunctive relief.
III. CONCLUSION
For the foregoing reasons, the Court GRANTS the Plaintiff States’ motion for a temporary restraining order. Because the Plaintiff States raise serious questions on the merits of their Clayton Act claim and because the balance of equities and public interest tip sharply in favor of
The Court ORDERS as follows:
- Defendants are temporarily enjoined and restrained from closing or consummating the Transaction or taking any steps, directly or indirectly, to integrate or consolidate their operations pursuant to the Transaction. This Order extends to Defendants’ agents, officers, servants, employees, attorneys, and other persons who are in active concert or participation with Defendants.
- The Court waives the security requirement under
Federal Rule of Civil Procedure 65(c) and Local Civil Rule 65-1 because Plaintiffs have demonstrated that Plaintiff States bring suit to enforce important public interests. See Diaz v. Brewer, 656 F.3d 1008, 1015 (9th Cir. 2011) (noting a “district court retains discretion as to the amount of security required, if any” (emphasis in original) (internal quotation marks and citation omitted)). - This Order shall remain in effect for 14 days. Under
Federal Rule of Civil Procedure 65(b)(2) , a TRO must expire no later than 14 days after the time it is issued unless the Court extends it for good cause. Therefore, the Court SETS the following schedule:- Plaintiffs’ motion for preliminary injunction due by July 23, 2026;
- Defendants’ opposition brief due by July 27, 2026;
- Plaintiffs’ reply due by July 30, 2026;
- Parties’ joint proposed omnibus sealing motion (see below) due by July 31, 2026;
- Hearing on Plaintiffs’ preliminary injunction motion at 3:00 p.m. on Monday, August 3, 2026, in Oakland.
- The parties may stipulate to an extended briefing schedule and later hearing date, provided that the parties also stipulate that the temporary restraining order will continue in effect until that hearing date.
- The Court ORDERS the parties to prepare a single proposed order that brings together in one chart all the documents or portions of documents sought to be sealed through the
pending administrative motions to seal. The chart should be organized in the following format: Document or Portion of Document Sought to be Sealed Evidence offered in Support of Sealing Objections Ruling
The Parties’ joint proposed omnibus sealing motion shall be filed on the docket and submitted as a Word version to amopo@cand.uscourts.gov.
IT IS SO ORDERED.
Dated: July 20, 2026
ARACELI MARTÍNEZ-OLGUÍN
United States District Judge