Oregon‘s attorney general is asking a judge to delay Paramount‘s closing of its proposed acquisition of Warner Bros. Discovery by 60 days, and to order the company to turn over documents related to the merger.
A hearing is scheduled for Monday in Multnomah County Circuit Court.
The latest legal wrinkle comes as Paramount seeks approval from European regulators. The company has said that it won’t close the deal before July 22, which is the deadline for an EU decision. In the UK, UK Culture Secretary Lisa Nandy has said she is “minded to intervene,” but has not announced a formal decision. The U.S. Justice Department’s Antitrust Division gave the greenlight to the transaction last month.
Meanwhile, California Attorney General Rob Bonta and other state attorneys general are said to be considering a legal challenge to the transaction.
Oregon Attorney General Dan Rayfield said that he has been asking for Paramount records of lobbying of federal officials, as well as its role in a statement that the DOJ released in support of the transaction. The attorney general also is seeking documents “related to the formulation and execution of lobbying strategies aimed at obtaining regulatory approval of the proposed merger, which Respond as internally named ‘Project Warrior.’”
Rayfield said in a statement, “Oregonians have a real stake in this deal – in our film industry, in our economy, in the choices they’ll have as consumers. Paramount had every opportunity to hand over records and answer a few basic questions. Instead, it is trying to run out the clock and evade scrutiny. We’re asking the court to make sure Oregonians get the answers they’re owed before this deal closes, not after.”
The attorney general indicated in his motion that he was seeking information as to whether Paramount had a role in “composing or editing” the U.S. DOJ’s statement on the merger. The statement was seen as a bit unusual in that the DOJ typically releases statements when it is challenging a transaction rather than explaining why it did not. The Oregon AG wrote that “if an approval were the product of a corrupt bargain, that too would inform the state’s interpretation of its own investigative materials” that it received from Paramount, WBD and the DOJ.
In a court filing, Paramount has objected to the document requests, arguing, among other things, that they impose “burdens and demands which are disproportionate” to the Oregon investigation and are “of such marginal relevance that the value of any materials sought is outweighed by the burden imposed on Paramount in having to provide such information.” It also objects on other grounds, including attorney-client privilege and that infringes on its First Amendment rights and freedom of association.
“Lobbying activities and related communications are wholly irrelevant to whether the proposed acquisition ‘violates Oregon’s antitrust laws,’” the company’s legal team wrote.
