State Attorneys General Expand Their Role as Independent Antitrust Enforcers

Twelve Democratic state attorneys general filed suit in the Northern District of California seeking to block Paramount Skydance Corp.’s proposed $110 billion acquisition of Warner Bros. Discovery (WBD), despite the US Department of Justice having already declined to challenge the transaction. The lawsuit illustrates a broader development in merger enforcement: for some deals, federal antitrust review is increasingly only one aspect of the regulatory process.

State attorneys general (AGs) are playing an increasing role in enforcement involving business conduct in general and antitrust law in particular. State AGs are conducting independent reviews, pursuing their own investigations, and, where they believe appropriate, moving to block transactions even after the Federal Trade Commission and US Department of Justice Antitrust Division have concluded their review.

PARAMOUNT-WBD CHALLENGE IN PERSPECTIVE

The state lawsuit challenging the proposed Paramount-WBD merger alleges the merger would violate Section 7 of the Clayton Act, the primary federal antitrust law restricting anticompetitive mergers, based on alleged harm to markets for the distribution of wide-release theatrical films, the distribution of anticipated top-grossing films, and the licensing of basic cable channels.

Beyond the specific markets alleged to be harmed, the case also highlights concerns that the proposed merger would combine significant film, television, and streaming assets under common ownership.

Paramount released a statement in response to the filing of the suit stating that it would defend the transaction and contending that “The lawsuit filed by the state attorneys general, in the most generous light, reflects a fundamentally flawed application of the antitrust laws and is wrong on both the facts and the law.”

Regardless of the ultimate merits of the states’ allegations, the lawsuit reflects states’ willingness to advance independent competitive theories and litigate significant transactions without federal participation.

These state AGs’ challenge to this proposed merger is significant for reasons beyond the media industry or the specific facts of this merger. It further illustrates that state AGs are analyzing transactions independently of federal enforcers and, where they conclude competitive concerns exist, pursue litigation even absent federal government support. The expanding role of state AGs as independent competition enforcers makes state engagement, coalition dynamics, and litigation planning an increasingly important part of transaction strategy.

This recent lawsuit is the second merger enforcement action that state AGs have filed independently of the federal government this year. In March 2026, a different coalition of state AGs brought a suit to stop the merger of Nextstar Media Group Inc. and Tegna Inc. On April 17, 2026, Judge Troy Nunley, the chief judge of the US District Court for the Eastern District of California, granted “a preliminary injunction to preserve the status quo and prohibit Nexstar and TEGNA from further integration pending adjudication on the merits.” That challenge, which remains pending, is bipartisan, suggesting state enforcers from both parties are closely scrutinizing dealmaking unchallenged by federal enforcers.

Together, the Paramount-WBD and Nexstar-Tegna cases suggest that independent state merger litigation may become a more regular feature of significant transactions, particularly where states conclude that federal enforcement priorities diverge from their own.

These enforcement actions also align with broader trends of increased state AG activity across a range of enforcement areas relevant to businesses and with a growing number of states passing their own pre-merger notification laws, which we discussed in a prior LawFlash regarding California’s new notification law, which will become effective on January 1, 2027.

IMPLICATIONS FOR BUSINESSES AND M&A TRANSACTIONS

Businesses contemplating mergers and acquisitions should consider any relevant state AG enforcement potential as they evaluate deals and negotiate transaction provisions. For example, obtaining expiration of the waiting period under the federal premerger review law—the Hart-Scott-Rodino (HSR) Act—is often made a condition to closing a transaction in deal agreements where HSR reporting is required.

By contrast, the resolution of a state AG’s antitrust investigation often is not. As a result, deal parties may be contractually required to close a transaction after receiving HSR expiration even if one or more AGs general continue to investigate the transaction. State AGs sometimes obtain a temporary restraining order or preliminary injunction to prevent a transaction from closing while their investigation continues, but not always.

Transaction parties should consider whether their agreements appropriately allocate any risk of potential state enforcement among the parties. For example, buyers may wish to consider a closing condition that permits delay of closing until pending state AG antitrust investigations have been resolved, although such provisions would be a matter for negotiation between the parties based on the unique circumstances of each deal.

While any state AG may get involved in merger enforcement, businesses considering mergers and acquisitions should pay particular attention to states that have a significant nexus to the transaction and to those states’ enforcement priorities. Relevant jurisdictions may include the parties’ home states, states in which key competitors operate, and states where consumers, workers, or other constituencies may be uniquely affected by the transaction.

Companies also should recognize that state AG investigations rarely involve only a single jurisdiction. Multi-state coalitions often include states with differing priorities, investigative approaches, litigation objectives, and appetites for settlement. Understanding coalition dynamics—including which offices are leading an investigation, how authority is allocated among participating states, and how negotiations may develop across multiple jurisdictions—can become an important component of transaction planning and regulatory strategy.

If a transaction becomes the subject of a state AG investigation or enforcement action, businesses should recognize that state and federal antitrust processes share important similarities but also differ in significant ways. For example, both federal and state enforcers may bring suit under Section 7 of the Clayton Act. The procedural framework, however, is not identical. Under the federal Hart-Scott-Rodino (HSR) Act, parties to a reportable transaction generally may not close until the applicable waiting period has expired or has been terminated by the federal antitrust agencies. Federal antitrust agencies can terminate the HSR waiting period at their discretion.

By contrast, although recently enacted, industry-agnostic state merger prenotification laws generally require only that parties provide the relevant state with copies of federal HSR filing materials, they do not necessarily impose separate waiting periods.[1] Therefore, while the expiration of the HSR waiting period does not necessarily eliminate the possibility of continued state investigation or subsequent state litigation, it may still have an impact on timing.

Depending on the circumstances and the applicable laws, states will evaluate the timing of their pre-complaint investigations and when they need to file suit in relation to the merging parties’ potential ability to close.

In the Paramount-WBD case, the HSR waiting period expired several months before the states filed suit, but the transaction had not closed, given ongoing reviews in jurisdictions outside the United States. In the Nexstar-Tegna case, shortly after the states filed suit, the merging parties received HSR expiration from the federal government and decided to close their transaction. The district court, in awarding preliminary relief to the challenging states, however, enjoined integration of those two businesses despite the closing having occurred, a decision which the merging parties are currently appealing.

These examples highlight just a few of the complex dynamics at issue in state merger enforcement actions. Recent cases demonstrate that state AGs have become an increasingly significant component of the merger review landscape. Companies pursuing significant transactions should consider state enforcement risk alongside federal review from the earliest stages of transaction planning, including diligence, regulatory strategy, transaction documentation, and litigation preparedness.

Our antitrust and state AGs team is continuing to closely monitor developments related to standalone state AG investigations and litigation, joint state and federal antitrust investigations and litigation, and M&A deal provisions.