<p>Iowa and Montana are planning to request the Supreme Court to intervene in the legal dispute regarding Paramount Skydance’s $111 billion acquisition of Warner Bros. Discovery. The states argue that California and 11 other states should not be permitted to block a transaction that has nationwide implications.</p>
<p>The Republican-led states have asked the justices for permission to sue California, Arizona, Colorado, Connecticut, Massachusetts, Minnesota, Nevada, New Jersey, New Mexico, New York, Oregon, and Washington. These states filed a lawsuit against Paramount in July, resulting in a temporary restraining order that prevents the companies from completing the merger until next year.</p>
<p>Iowa and Montana have also requested that the Supreme Court expedite the case, requiring the plaintiff states to respond by September 15, and to consider the matter during its conference on October 9, according to filings obtained by the Washington Examiner.</p>
<p>“Twelve states have effectively vetoed a transaction that the other thirty-eight, and the United States, declined to challenge,” the two states stated in their proposed complaint.</p>
<p>Iowa Attorney General Brenna Bird and Montana Attorney General Austin Knudsen, both Republicans, are seeking a declaration from the high court that the merger does not violate federal antitrust law and to prohibit the 12 states from continuing their case in the Northern District of California.</p>
<p>Their argument is based on the assertion that federal law grants the Supreme Court exclusive authority over disputes between states. Iowa and Montana contend that the California-led case affects their residents and economies, transforming the merger litigation into an interstate issue that a federal district court cannot resolve.</p>
<p>California and its allies argue that the merger of Paramount and Warner Bros. would diminish competition in theatrical film distribution and television programming. Their lawsuit claims that the merged entity would control approximately 27% of the markets for distributing widely released theatrical films and licensing basic cable channels.</p>
<p>The Department of Justice concluded its investigation in June without challenging the transaction, stating it was likely to enhance competition. Regulatory bodies in the European Union, the United Kingdom, China, Canada, Mexico, and other jurisdictions have also approved the deal.</p>
<p>Bird defended the merger in a Tuesday op-ed for the Daily Wire, asserting that the combination of Paramount+ and HBO Max would create a stronger competitor to Netflix, Disney, and Amazon.</p>
<p>“California is once again trying to be the country’s regulator,” Bird wrote. “And once again California is defying common sense to raise costs around the country. That makes this a dispute between states, and the Constitution says those can only be heard in the U.S. Supreme Court.”</p>
<p>Bird concluded that the merger “helps our economy and our citizens” while referencing the DOJ’s assessment that the combined entity will increase competition in the theatrical market rather than diminish it. She denied any existence of a “monopoly problem.”</p>
<p>However, Bird did not mention potential job losses that may result from the $111 billion merger if it proceeds. These concerns were highlighted in a recent economic report from the Los Angeles County government.</p>
<p>Iowa and Montana argue that the delay is causing costs that cannot be recovered later. Starting in October, Paramount is contractually obligated to pay Warner Bros. shareholders approximately $7 million for each day the transaction remains incomplete. A trial in California is set for March 2027.</p>
<p>“Mergers do not freeze well,” the states stated in their motion to expedite. “The corporate officers, employees, suppliers, and contractors at Paramount and Warner Bros. are mired in uncertainty.”</p>
<p>California Attorney General Rob Bonta, a Democrat running for reelection this fall, is leading the antitrust lawsuit against the Paramount-Warner Bros. merger.</p>
<p>The Washington Examiner reached out to Bonta’s office for comment regarding Iowa and Montana's request for Supreme Court intervention.</p>
<p>Bonta canceled a planned settlement meeting with Paramount representatives, accusing the company of leaking details about a private meeting to the press. He stated that the alleged leak indicated a “lack of good faith” on Paramount’s part.</p>
<p>The entertainment company denied leaking any information about settlement discussions and asserted its commitment to acting in good faith as Bonta’s lawsuit proceeds in court. No follow-up settlement meeting has been scheduled yet, according to Bonta.</p>
<p>The Supreme Court action adds to the pressure on officials in states challenging the merger. As reported last week, Arizona state Senate President Warren Petersen, a Republican, has called for a public hearing on the potential taxpayer exposure if a judge grants Paramount’s request for the plaintiff states to post a $1.88 billion bond.</p>
<p>Petersen, who is running to replace Democratic Arizona Attorney General Kris Mayes, has requested clarification on whether state funds could be at risk and whether legislative approval would be necessary.</p>