Justice Department Urges Judge To Order States To Post a Bond in Antitrust Lawsuit Against Paramount

The Justice Department is siding with Paramount in its request to force California and 11 other states to post a bond that will cover the damages caused by the delay from the lawsuit with Warner Bros. Discovery. Paramount’s $111 billion merger with Warner Bros. Discovery has been placed on hold as a lawsuit brought by a dozen Democrat-led states, spearheaded by California, plays out. The litigation alleges that the merger would violate federal antitrust laws.In July, a federal judge, Araceli Martínez-Olguín, a Biden appointee, put the merger on hold until the lawsuit is resolved. With the deal on hold, Paramount could be on the hook for $1.88 billion as it agreed to a “ticking” fee of $7 million a day for every day the deal is delayed beyond September 30. The studio has asked Judge Martínez-Olguín to order the plaintiffs to post a bond that would cover the damages caused by delay. However, it is unclear whether she will approve Paramount’s request as she declined to require a bond when she initially issued her order putting the merger on hold.On Tuesday, the Justice Department — which approved the deal earlier this year — submitted a statement of interest that argued that the states behind the Paramount lawsuit must post a “proper bond,” citing Section 16 of the Clayton Antitrust Act. “The bond requirement forces parties to have skin in the game,” the filing says.The Justice Department disagreed with California’s argument that it is only required to post a bond if a judge finds that the preliminary injunction blocking Paramount’s deal was “improper.”“That reading, if followed, would have the effect of both nullifying the plain text of the statute (leading to separation-of-power concerns) and disregarding Congress’s enforcement scheme by elevating States to a status akin to the federal government,” the filing says. “Congress provided for complementary antitrust enforcement by the federal government and private parties — but made clear that it was not a system of equals.”The Justice Department noted that it conducted an investigation of the Paramount-Warner Bros. merger that included a review of more than 2 million documents and determined that the deal would not hurt competition. The federal judge overseeing the $6.2 billion merger of two local TV station groups, Tegna and Nexstar, ordered a $10,000 bond as that deal is on hold while a lawsuit brought by DirecTV plays out. The bond was much lower than the $150 million requested by Nexstar. California’s attorney general, Rob Bonta, has scoffed at the idea that the plaintiffs in the Paramount lawsuit should be required to post a bond. In a post on X last month, he wrote, “Paramount went into this process with eyes wide open. They are lying in a bed of their own making, and once again, trying to blackmail us to get us to back down.”The Justice Department’s statement comes as Mr. Bonta is facing growing pressure to end his lawsuit. On September 3, the CEO of the African-American Chamber of Commerce of New Jersey, John Harmon, published an op-ed urging the states to end the lawsuit — which the Garden State joined — arguing the coalition is spending too much taxpayer money on the litigation.

Justice Department Urges Judge To Order States To Post a Bond in Antitrust Lawsuit Against Paramount

Justice Department Urges Judge To Order States To Post a Bond in Antitrust Lawsuit Against Paramount

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