Sirius XM Radio Class Action Lawsuit Gets Green Light

A federal judge has cleared the way for a $1 billion class action lawsuit to proceed against Sirius XM Radio (SIRI) that accuses the satellite radio company – the largest in the country – of antitrust violations for illegally raising prices through a monopoly. At the same time, however, U.S. District Judge Harold Baer dismissed claims filed under 20 state consumer protection laws, ordering that the case may go forward on behalf of a nationwide class of Sirius XM subscribers.

A 2009 class action lawsuit filed by Sirius XM subscribers claimed that New-York based Sirius XM, the product of a 2008 merger between Sirius Satellite Radio, Inc. and XM Satellite Holdings, Inc., abused its monopoly power by illegally raising subscription prices by almost 30 percent. The class action also targets so-called music royalty fees charged by Sirius.

The subscribers claim in the Sirius XM antitrust class action lawsuit that Sirius XM violated promises made to U.S. regulators before the merger.

“They promised lower prices and more choice, and once the deal was done, they immediately implemented the opposite of what they had promised” said a lawyer representing the plaintiffs.

In his ruling this week, Baer certified a class of Sirius XM customers who since July 29, 2008 paid the music royalty fee, an increased monthly charge to activate more than one radio, or an internet access fee. The class of Sirius XM subscribers who meet these conditions is expected to number about 20 million.

The Sirius XM class action lawsuit is seeking about $1 billion and a court order preventing Sirius XM from violating antitrust laws, which may require a freeze on future rate increases or the breakup of the company. A trial is set for May 2.

The case is Blessing v Sirius XM Radio Inc., 09-cv-10035, U.S. District Court, Southern District of New York (Manhattan).