McClatchy's (MNI - Get Report) sale of three California newspapers to MediaNews Group cleared an important hurdle Friday, when a federal judge declined to issue a temporary restraining order blocking it.

McClatchy announced the decision in a press release late Friday.

The $1 billion deal, which includes the sale of the Monterey County Herald, the San Jose Mercury News and Contra Costa Times, has encountered opposition from people worried that it would give MediaNews a monopoly in the Bay Area.

U.S. District Judge Susan Illston's decision was in response to an antitrust lawsuit filed by San Francisco real estate magnate Clint Reilly, an Associated Press report noted.

Illston ruled that newspapers face competition from other news sources, although she said she would listen to future arguments challenging that thesis, according to the report. Reilly's attorney said he would continue to proceed with the antitrust lawsuit, the report also said.

Other potential obstacles remain. Government regulators have yet to give the deal antitrust clearance.

McClatchy shares ended Friday up 35 cents at $41.98.