On Aug. 23 we noted that the alt-weekly Bay Guardian was complaining that most of the Bay Area’s newspapers had misled the public into thinking that Clint Reilly’s (pictured) lawsuit against the MediaNews-Hearst deal was over. This morning (Sept. 1), the MediaNews-owned ANG newspapers carried a report by staff writer Josh Richman that said the case was still alive and that a Feb. 26 trial date has been set. While federal judge Susan Illston refused in July to grant Reilly’s request for a temporary restraining order that halted MediaNews from acquiring the San Jose Mercury News and Contra Costa Times, she made it clear that the issues Reilly has raised can be argued at trial — and if he wins, the $1 billion transaction could be reversed. Reilly, a San Francisco real estate developer and political consultant, is also challenging an aspect of the deal in which Hearst Corp., owner of the Chronicle, will acquire a 30 percent stake in MediaNews — which would make the Bay Area’s two major newspaper publishers partners. Reilly is arguing that further consolidation of newspapers will drive up advertising rates, reduce news coverage and result in layoffs. MediaNews and Hearst have denied Reilly’s claims. Both Hearst and MediaNews say they will continue to compete with each other in the Bay Area.