The Justice Department approved Paramount's proposed $81 billion deal for rival Warner Bros. Discovery, seeing benefits for Hollywood and consumers. But a dozen Democratic-led states, anchored by California, saw a different script and sued to block the merger Monday in Northern California federal court.

The states' challenge is unprecedented—states rarely pursue merger trials independently, typically deferring to federal enforcement. The case tests whether states can successfully oppose a deal the federal government has already blessed. The merger still awaits U.K. and European Union approval.

Paramount Chairman and CEO David Ellison, backed by his billionaire father Larry Ellison, aims to create an entertainment behemoth to compete with Disney, Netflix, and Amazon. Paramount and Warner Bros. have been direct competitors for over a century.

California Attorney General Rob Bonta and other plaintiffs argue the fusion would lead to fewer movies in theaters, higher prices for film and television bundles, and harm tens of thousands of entertainment workers.