Judge rejects bid to block Paramount-Warner Bros merger

A federal judge on Thursday denied a request by consumer plaintiffs to block Paramount Skydance Corp.'s proposed merger with Warner Bros. Discovery Inc., handing the companies an early courtroom victory while leaving a motion to dismiss the lawsuit unresolved.

U.S. District Judge Araceli Martínez-Olguín ruled from the bench after a hearing in Oakland that the plaintiffs had failed to meet the high standard for preliminary injunctive relief.

"Plaintiffs have not offered any evidence and thus have not made a clear showing of a likelihood of success, nor do they make a clear showing of irreparable harm," Martínez-Olguín said.

The judge took Paramount Skydance's motion to dismiss the complaint under submission. Faust et al. v. Paramount Skydance Corp. et al., 26-cv-3790 (N.D. Cal., filed April 30, 2026).

The ruling removes one immediate obstacle to the proposed merger, but a more significant challenge looms Friday morning.

A coalition of 12 state attorneys general led by California Attorney General Rob Bonta will ask Martínez-Olguín to issue a temporary restraining order blocking the transaction. State of California et al. v. Paramount Skydance Corp. et al., 26-cv-07116 (N.D. Cal., filed July 13, 2026).

The states have asked the court to rule on their request by midnight July 21. According to court filings, Paramount Skydance has said it intends to close the merger on July 22 if it receives final approval from the European Union. The U.S. Department of Justice has already approved the acquisition.

Paramount Skydance is backed by the powerful Ellison family, which is allied with President Trump and his administration.

The outcome of Friday's hearing could determine whether the companies are able to complete the merger on their anticipated timeline.

The case is pending before Martínez-Olguín in the Northern District of California after she related three different Clayton Act complaints before her: Faust, State of California and a complaint filed Tuesday by the Writers Guild of America.

The latter two cases were originally assigned to U.S. District Judge P. Casey Pitts in San Jose but transferred to Martinez-Olguin, an appointee of President Joe Biden.

Jeffrey L. Kessler, a partner with Winston Taylor LLP who represents Paramount Skydance, filed a brief Thursday opposing the states' proposed temporary restraining order in advance on Friday's hearing, arguing they "cannot come close to establishing a likelihood of success on the merits of their Section 7 Clayton Act claim" because the merger will increase competition.

During Thursday's hearing, Joseph M. Alioto Sr. of the Alioto Law Firm, representing the five named plaintiffs, got a chilly reception from Martinez-Olguin, who denied his motion for early discovery at its outset, noting that it was filed two months after the complaint was filed and just less than two weeks after the motion for a preliminary injunction.

"This does not demonstrate diligence and it doesn't support good cause," the judge said. "Plaintiffs should not expect the court to save them from their own failure to provide evidentiary support for their own motion by granting early discovery."

Alioto complained that Paramount Skydance has cooperated with the states while his clients have received no documents. He argued that plaintiffs only need to show a "lessening of competition," which they can do because two of the largest movie studios are planning to join forces.

"It is more likely that prices will be raised, that people will be fired, that output will be lessened," he told the judge, adding that Skydance raised streaming prices for Paramount+ after that acquisition went through last year.

Kessler said the plaintiffs lacked factual support for their antitrust claims and that any price increase could be remedied by money damages, not an injunction blocking the acquisition.

"The balance of equities does not favor this injunction," he told Martinez-Olguin.