SiriusXM’s pricing practices are facing fresh scrutiny after a federal judge refused to throw out a class action accusing the satellite broadcaster of hiding a 21.4% “US Music Royalty Fee” from subscribers, keeping the company in court for alleged deceptive pricing.
In a 17-page opinion filed October 14, US District Judge Michael H. Simon ruled that the four plaintiffs may proceed with claims that SiriusXM violated Oregon’s Unlawful Trade Practices Act and breached its duty of good faith and fair dealing.
The plaintiffs, all Oregon residents, claim that SiriusXM promoted music plans at rates excluding the additional “US Music Royalty Fee.” They say the company only disclosed this fee in small print or at the very end of the subscription process, if at all. The suit further alleges that SiriusXM customer service representatives mischaracterized the fee as “government-mandated” or “required by law,” even though the company retained the revenue beyond what was paid in royalties.
Judge Simon rejected SiriusXM’s argument that the lawsuit was filed too late, ruling that the timing of when subscribers should have discovered the alleged deception was a factual question for a jury. He also declined to dismiss the case on its merits, finding that plaintiffs had plausibly alleged deceptive conduct under Oregon law.
The decision also allows the plaintiffs’ claim for breach of good faith and fair dealing to continue. Judge Simon wrote that SiriusXM’s handling of the fee may have exceeded what customers could reasonably expect under their subscription contracts. “A defendant’s voluntary cessation of a challenged practice does not deprive a federal court of its power to determine the legality of the practice,” Simon wrote, rejecting SiriusXM’s claim that recent advertising changes made the case moot.
The court’s order means discovery will move forward in the proposed class action, with potential implications for the company’s pricing and marketing policies nationwide. The lawsuit seeks restitution, punitive damages, and injunctive relief to prevent future deceptive practices.
