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Judge won't block antitrust case on MediaNews deal

(Adds details, quote from judge)

SAN FRANCISCO, April 10 (Reuters) - A U.S. federal judge ruled on Tuesday that she would not dismiss a real estate developer’s effort to sue over a MediaNews Group Inc. deal to buy newspapers in the San Francisco Bay area.

Last year privately held MediaNews bought a string of Bay Area newspapers from McClatchy Co. MNI.N in a series of complex deals, one of which included financing from Hearst, owner of the San Francisco Chronicle, the region's biggest newspaper.

Real estate developer Clint Reilly, saying he was a reader of those publications, sued to block the sale on antitrust grounds. He has argued he had standing to bring the suit because he faced a likely increase in prices and less media diversity.

Reilly contends Hearst and MediaNews are seeking to create a newspaper monopoly in the region and presented in his lawsuit correspondence between the two companies regarding advertising and distribution.

In arguments before the court last Friday, MediaNews and Hearst asked U.S. District Court Judge Susan Illston to dismiss the case, saying Reilly had no standing to sue, but she declined to do so in the Tuesday ruling.

“Plaintiff has raised a genuine issue as to whether he has valid antitrust injury in this case,” Illston said in her order denying the motion to dismiss the lawsuit. “Even under the traditional antitrust analysis, independent of the newspaper context, plaintiff has standing as a consumer.”

A trial in the case is set for April 30.