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Ropes & Gray attorneys provide timely analysis on legal developments, court decisions and changes in legislation and regulations.
I. Welcome—Why We Are Together
Introduction
Mark Popofsky: Imagine that your company announces a major acquisition and spends eight months under federal antitrust review. The Department of Justice or the FTC closes its investigation without challenging the deal. You prepare for closing—and then a coalition of state attorneys general (AG) files suit to block the transaction and obtains a temporary restraining order.
That is precisely what just happened in Paramount’s proposed acquisition of Warner Bros. Discovery. And it captures the subject of today’s discussion: why federal antitrust clearance may not be the end of the story for deals or joint ventures.
Hello, and thank you for joining us on this Ropes & Gray podcast. I’m Mark Popofsky, a partner in our Washington, D.C. antitrust practice and an Adjunct Professor of Antitrust at Harvard, Georgetown, GW, NYU, and Penn law schools. I’m joined by my partner Samer Musallam, who’s also based in Washington, D.C. Both Samer and I served in the U.S. Department of Justice’s Antitrust Division.
Let’s jump in.
We are seeing today two related developments: state attorneys general are taking a more active role in merger enforcement, and private merger challenges are becoming more prominent. Together, they are a reminder that the U.S. antitrust enforcement system does not begin and end with the federal antitrust agencies.
II. U.S. Antitrust Enforcement: More Than the Federal Agencies
A. Federal Agencies Are Not the Only Enforcer in U.S. M&A
Samer Musallam: That’s right, Mark. DOJ and the FTC have primacy in merger review. They have tools that can prevent a reportable transaction from closing while they conduct their review, and they have broad investigative powers. But they aren’t the only parties that can challenge a deal. In fact, you can think of antitrust enforcement as having three branches—just as we have three branches of government. And in some sense, they act as “checks” on one another: When one recedes, others can seek to fill the gap.
The second branch is state attorneys general. States have independent authority to enforce the antitrust laws and challenge transactions.
In California v. American Stores, the Supreme Court confirmed that states may seek injunctive relief under Section 16 of the Clayton Act, including divestiture of a completed merger. In that case, the states in fact secured broader relief than federal enforcers.
Mark Popofsky: That case was 1990. A more recent example is the state AG challenge to the T-Mobile/Sprint merger in 2020.
DOJ cleared that transaction subject to a consent decree, but 13 states and the District of Columbia brought their own challenge. They lost at trial, but the case showed that states were willing to pursue independent enforcement paths, even when the federal government stays its hand.
Samer Musallam: The third branch of U.S. antitrust enforcement is private plaintiffs.
Well over 90% of U.S. antitrust litigation is brought by private parties. That includes challenges to mergers and joint ventures. Private plaintiffs that establish antitrust injury and standing may seek to block or unwind a merger, pursue treble damages, and bring class actions.
B. Why Focus on Them Now?
Mark Popofsky: These other two branches of the U.S. antitrust enforcement system—state attorneys general and private parties—have long existed alongside federal enforcement. So, that raises a question: Why, today, are we focusing on them? The big picture answer: Those other branches of enforcement are becoming significant risk factors in transactions.
B.1. State AGs Taking the Lead
Let’s start with the state attorneys general.
Historically, the state AGs were often viewed as supplementing antitrust enforcement rather than leading it. For example, in the Microsoft case that I tried, they litigated alongside the Department of Justice. But today, we are seeing this shift. In several high-profile matters, states have acted when the federal government has declined to proceed or accepted relief the states considered inadequate.
Samer, can you tell us about that?
Samer Musallam: Sure, Mark.
I think a striking example is the recent monopolization case against Live Nation.
DOJ settled shortly after trial began without requiring the divestiture of Ticketmaster. Thirty-three states plus the District of Columbia declined to join the settlement, continued the trial, and obtained a verdict on all claims submitted to the jury. The lesson is that a federal settlement may not provide complete peace when states want broader relief.
In Nexstar/Tegna, a deal between two broadcast television groups, DOJ and the Federal Communication Commission declined to act, but state AGs and DirecTV sued the day after closing. The court entered a preliminary injunction halting further integration and requiring Tegna to remain independently managed. Trial has been set for the middle of 2027, a substantial delay for the parties. The lesson is that closing does not eliminate the risk of a state or private challenge.
And then we have Paramount and Warner Bros.—the high-profile deal we mentioned at the outset.
After an eight-month investigation, DOJ closed its review without challenging the transaction.
But on July 13, 2026, California led a coalition of 12 state AGs in filing suit in federal court to block Paramount’s proposed acquisition of Warner Bros. Discovery. The states allege that the transaction would reduce competition in the distribution of wide-release and blockbuster theatrical films. Unlike Tegna, the states sued before closing.
Paramount disputes those market definitions and argues that the transaction would create a stronger competitor to companies such as Netflix and Amazon. The state AGs sought a temporary restraining order (TRO) to block the deal, pending a preliminary injunction here. On July 20, a mere week after the suit was filed, Judge Martinez-Olguin granted the TRO after hearing argument and set the case on a fast track for a preliminary injunction hearing a mere 14 days later, on August 3. The parties have a drop-dead date for the deal in late September.
Whatever the outcome of the forthcoming preliminary injunction trial, the Paramount case illustrates our central point: federal clearance doesn’t bind the states or prevent them from bringing their own challenge.
Mark Popofsky: So, even after eight months of federal review and an unconditional clearance from the DOJ and other enforcers around the globe, the parties still face litigation to stop the deal, Samer?
Samer Musallam: That’s exactly right. And states are asserting their independence in another way as well: objecting to federal antitrust settlements.
In the HPE/Juniper matter, state AGs led by Colorado, intervened under the Tunney Act to oppose DOJ’s proposed consent decree and obtained limited discovery. As of this recording, the court has not ruled.
Mark Popofsky: These are notable developments. While state attorneys general are resource-constrained, they are nonetheless allocating significant resources to antitrust enforcement.
In addition to their resource disadvantage, they have others. They cannot stop a transaction from closing while they investigate like the DOJ or the FTC can, and they may face certain defenses that the federal government does not face. But they can supplement whatever resource deficiency they have, for example, by hiring outside counsel—which they have done, for example, in the Paramount case.
B.2. Private Challenges to Mergers and Joint Ventures
Samer Musallam: At the same time, we’re also seeing renewed private challenges to transactions—some of them successful.
Private plaintiffs face significant standing and antitrust-injury requirements. Courts are wary of allowing competitors to use the antitrust laws simply to impede stronger rivals, and not every customer or consumer is considered an appropriate plaintiff.
Mark Popofsky: But some private plaintiffs are proper plaintiffs and have achieved meaningful results.
Take Fubo, the sports-streaming service.
Fubo obtained a preliminary injunction blocking the launch of Venu Sports, a joint venture among Disney, Fox, and Warner Bros. Discovery provocatively code-named “Raptor.” Fubo sued both as a customer and a competitor. It was an unusual example of a private plaintiff creating immediate and successful, in its case, transaction risk by preventing the launch of a major new product.
Private plaintiffs are also suing with the state attorneys general. Tegna/Nexstar, which Samer mentioned, is an example, where DISH has taken a significant role.
Samer Musallam: There’s another recent example: Steves & Sons. v. JELD-WEN, where a customer successfully challenged a completed acquisition and obtained divestiture. The Fourth Circuit upheld the remedy—the first appellate decision affirming divestiture in a private challenge to a consummated merger.
Mark Popofsky: The broader point is that customers, competitors, suppliers, and consumers may sometimes create meaningful transaction risk even when the federal agencies refuse to act. And even when structural changes to a deal are not a risk after closing, private class actions continue to create the potential for significant monetary exposure. For example, class actions challenging the Sprint/TMO transaction we mentioned earlier continue to this day.
III. What Is the Take-Away?
Samer Musallam: So, what’s the take-away for clients?
First, FTC or DOJ clearance may not be the whole antitrust ballgame. State AGs may act when they believe the federal government has declined to proceed or accepted inadequate relief, and private suits remain a real risk before and after closing.
Mark Popofsky: Second, companies should consider those risks from the earliest stages of diligence and deal structuring, all through the HSR review process, closing, and integration. As Nexstar illustrates, closing does not necessarily eliminate the risk a court could halt integration.
Samer Musallam: Third, federal clearance and overall litigation risk are related but distinct questions. That broader risk should inform the transaction agreement, closing conditions, cooperation obligations, termination rights, communications strategy, and integration planning.
Mark Popofsky: Finally, companies should remain disciplined about ordinary-course documents and public statements. Materials reviewed by federal agencies may be examined by state enforcers or private plaintiffs. Indeed, several states have statutes requiring parties to file with them the materials they provide to the DOJ or the FTC.
Samer Musallam: The bottom line is straightforward: federal clearance remains a major milestone, but it doesn’t automatically mean complete antitrust peace.
Closing
Mark Popofsky: Thank you, Samer for helping us break this down. And thank you everyone for listening.
For more information on this topic, please do not hesitate to contact any member of the Ropes & Gray antitrust team or visit our website. You can also subscribe and listen to other Ropes & Gray podcasts wherever you regularly listen to your podcasts, including Apple Podcasts and Spotify. Thank you again for listening.