• Mandate may signal states’ disposition towards potential suit
• Follows similar playbook in other state AG prosecutions

State attorneys general (AG) are closing in on hiring outside counsel to lead a potential lawsuit seeking to block Paramount Skydance’s acquisition of Warner Bros. Discovery, according to a person familiar with the US Department of Justice’s (DOJ) thinking.

While the DOJ officially cleared the matter on 12 June, state AGs – likely led by California AG Rob Bonta – have reportedly continued to investigate the matter and, according to the person familiar, will decide soon whether to bring on outside counsel.

The act of formally hiring outside counsel would likely be interpreted as a signal that the states are minded to bring a suit.

Although states face an uphill struggle successfully challenging the matter in court, “when antitrust gets politicized, trust in the federal agencies is eroded and the state AGs feel they have to act,” the person argued.

Indeed, even as federal enforcers in the Trump administration have demurred on bringing cases over a number of high-profile mergers, coalitions of state AGs have stepped in, such as in TEGNA/Nexstar, Juniper Networks/HPE, and Anywhere/Compass.

State action in these cases has involved bringing on outside counsel for some of their efforts.

Law firm Simonsen Sussman, a recently founded antitrust boutique firm made up of former federal antitrust enforcers, was hired to represent California in the TEGNA/Nexstar challenge, according to court documents.

Jeffrey Kessler of law firm Winston Taylor helped the states in their litigation of the Ticketmaster/Live Nation matter, as reported by Puck. Now, he will be crossing the aisle to defend the Paramount deal if it goes to court.

California governor Gavin Newsom in May added USD 14.3m to the state’s budget, specifically earmarked for antitrust litigation. “The lack of federal oversight in this area leaves California individuals and businesses vulnerable to predatory business practices that threaten affordability and consumer rights,” the budget document said.

Bonta’s office has already interviewed trial lawyer Robert Van Nest to take a role in California’s effort challenging the USD 110bn media megadeal, according to The Hollywood Reporter.

Today’s reporting suggests that effort may be coming to a head, sooner rather than later.

The companies are reportedly attempting to secure all regulatory clearances by mid-July.

An initial decision at the European Commission (EC) is slated to arrive by 7 July for the competition review and 14 July for the Foreign Subsidies Regulation assessment. As things stand, those dates represent the clearest timing milestones, meaning state AGs may need to act before then.

“The Paramount acquisition of Warner Bros. remains under active investigation by California DOJ. We are unable to comment on potential staffing or future approaches to the matter,” a spokesperson for the California Department of Justice said.