Photo illustration: Brendan Lynch/Axios. Photo: Mario Tama/Getty ImagesState attorneys general from a dozen states including California, New York and Washington filed a lawsuit to block Paramount Skydance's $110 billion takeover of Warner Bros. Discovery.Why it matters: The lawsuit could derail or delay the closing of the deal, which could cost Paramount hundreds of millions of dollars. Zoom in: The states argue the deal is anticompetitive on three grounds:Wide release theatrical distribution: They argue after the merger, "only three distributors will control 75% of these films and only four distributors (Defendants, Disney, Universal, and Sony) will control 86% of them."Top-grossing theatrical distribution: They say after the deal "Defendants will control more than 30% of these films, and four distributors (Defendants, Disney, Universal, and Sony) will control more than 90% of them."Cable reach: "Warner Bros. is the second largest and Paramount is the third largest in this market, and they would combine for a 27% share," the states attorneys general note.What they're saying: "The unlawful merger of these two entertainment behemoths would lead to higher prices, lower quality, and less content for film and television, harming movie theaters, basic cable distributors, and ultimately, audiences on every sofa and movie theater seat in the U.S.," California Attorney General Rob Bonta said in a statement.The coalition of states said they asked the two companies to not close their merger until after the judicial process concludes, adding it will file a temporary restraining order.The coalition is comprised of California, Arizona, Colorado, Connecticut, Massachusetts, Minnesota, Nevada, New Jersey, New Mexico, New York, Oregon and Washington.Catch up quick: The Justice Department in June approved Paramount's takeover of WBD.While that approval was expected, regulators abroad and in U.S. states continued to probe the deal. The U.K. Competition and Markets Authority said last month it will formally launch an investigation into the deal. European Union regulators seem more open to approving the deal with remedies. Bloomberg reported that Paramount is open to selling some of its children's TV network assets to help win EU approval. The big picture: State attorneys general are moving aggressively to sue corporate giants in an attempt to fill a void they argue is being left by federal antitrust regulators.Earlier this year, more than two dozen bipartisan state attorneys general continued an antitrust lawsuit to break up Live Nation and Ticketmaster after the Justice Department's surprise settlement with the combined company. A jury ultimately ruled in their favor. A coalition of states sued to block Nexstar and Tegna from merging on antitrust grounds, even though the Justice Department and FCC approved the deal. A federal judge blocked the deal until the lawsuit is sorted out. Go deeper: State AGs play antitrust copsThis is a breaking news story. Please check back for updates.