A US District Court may not be dismissing a $150 million SoundExchange lawsuit against SiriusXM alleging unpaid royalties for lack of jurisdiction, but a judge is granting the satellite broadcaster’s change of venue request – moving the case from Virginia to New York.
In August, SoundExchange filed a lawsuit against SiriusXM in the US District Court for the Eastern District of Virginia, claiming the satellite broadcaster has failed to pay more than $150 million in royalties. The lawsuit accuses SiriusXM of manipulating revenue calculations for royalty payments by overvaluing the webcasting portion of their service bundles.
SoundExchange CEO Michael Huppe expressed disappointment over the necessity of litigation, citing unsuccessful attempts to resolve the issue out of court. In response, SiriusXM expressed surprise at the lawsuit, maintaining that it has paid over $5 billion in royalties over the past decade and remains committed to fair compensation for artists.
SiriusXM had sought to dismiss the case or transfer it to New York, arguing the case ties to their corporate activities in New York rather than Virginia, where the lawsuit was filed. They suggest that the royalty calculations and related business activities central to the complaint occur at their New York headquarters.
The court denied Sirius XM’s motion to dismiss for lack of jurisdiction, noting the company’s significant business interactions in Virginia. However, the court agreed to transfer the case to the Southern District of New York.
US District Judge Patricia Tolliver Giles concluded that the transfer suits the convenience of both parties and witnesses, saying, “The Court finds that consideration of the convenience of the parties and potential witnesses weigh in favor of transferring this case…The Court is doubtful that this forum is more convenient for either party when neither are domiciled in [Virginia] and, as explained above, most of the events and disputed actions underlying the Complaint occurred elsewhere, primarily in New York.”
This isn’t the only case SiriusXM will have to fight in the Southern District of New York. New York Attorney General Letitia James’ suit alleging the company complicates the cancellation process to discourage subscribers from discontinuing service, initially filed in the New York State Supreme Court, was moved to the same court in January.
