SiriusXM class action claims co. falsely advertises music plans at lower prices than it charges

SiriusXM music class action overview: 

• Who: Four Oregon residents have filed a class action lawsuit against Sirius XM Radio Inc.
• Why: The plaintiffs allege the company runs a deceptive pricing scheme, advertising its music plans at lower prices than it actually charges. 
• Where: The SiriusXM music class action lawsuit was filed in an Oregon federal court.

A new class action lawsuit alleges that Sirius XM Radio illegally deceives its Oregon-based subscribers by advertising its music plans at lower prices than it actually charges.

Plaintiffs Kara Kirkpatrick, Gillian Maxfield, Anna DeMarco, and Cody Michael filed the complaint against Sirius XM Radio Inc. on June 14 in an Oregon federal court, alleging violations of the Oregon Unlawful Trade Practices Act.

The four Oregon residents say Sirius XM fails to include in its advertised prices the “U.S. Music Royalty Fee” it charges, which allegedly increases the plan price by 21.4%. They also say the fee is simply “invented” by the company to increase its bottom line. 

The plaintiffs are looking to represent all current and former Sirius XM subscribers residing in Oregon who paid a “U.S. Music Royalty Fee.” 

Royalty fee not disclosed to subscribers, lawsuit claims 

Sirius XM purposely does not disclose the fee to its Oregon subscribers, the lawsuit alleges. The plaintiffs say that the “U.S. Music Royalty Fee” is mentioned nowhere in the company’s advertising. The only indication that the price could be higher than advertised is in a disclaimer stating “fees and taxes apply.” 

However, there are no fees or taxes that are applied apart from the “U.S. Music Royalty Fee,” the plaintiffs allege. 

“Once consumers have been lured to sign up, Sirius XM prevents them from learning about its scheme by never thereafter sending them monthly or ongoing billing notices or invoices,” the lawsuit says. “All the while, Sirius XM silently and automatically renews their subscriptions month after month and year after year.” 

The consumers say, in comparison, none of Sirius XM’s competitors charge any separate royalty fee over and above their advertised music plan prices. 

Fee name is deceptive, subscribers say

The subscribers allege that the name of the U.S. Music Royalty Fee is also deceptive. 

Sirius XM calls it a “U.S.” fee to falsely indicate to consumers that it is a government-related fee, they allege. They say that if a subscriber notices the U.S. Music Royalty Fee has been charged and then contacts Sirius XM to inquire about it, the company has a policy of “outright falsely telling the subscriber that it is ‘government mandated’ or is a government pass-through fee.” 

At the same time, the fee has become a significant source of income for Sirius XM, the lawsuit alleges. 

In 2023, Sirius XM collected $1.36 billion in U.S. Music Royalty Fee charges, while the entire company had net profits of $1.26 billion, the plaintiffs allege. 

“In other words, in 2023, U.S. Music Royalty Fee revenues were equal to 108% of the net profits for the entire company,” they say. 

“Since Sirius XM invented and introduced the fee in 2009, plaintiffs estimate that Sirius XM has unlawfully extracted over $130 million from Oregon consumers in U.S. Music Royalty Fee charges.”

The plaintiffs are asking a court to force the company to properly disclose the fee. They are also seeking certification of the class action, statutory damages of at least $200 to each class member, plus punitive damages, fees, costs and a jury trial.

Last year, Sirius XM was hit with a separate lawsuit from New York Attorney General Letitia James claiming the company violated state law by making its subscriptions extremely difficult to cancel.

What do you think of the allegations against Sirius XM? Let us know in the comments! 

The plaintiffs are represented by Che Corrington and Daniel M. Hattis of Hattis & Lukacs and Stephen P. DeNittis of DeNittis Osefchen Prince P.C. 

The Sirius XM Radio Class Action Lawsuit is Kara Kirkpatrick et al., v Sirius XM Radio Inc., Case No. 3:24-cv-00955-SB in the U.S. District Court District of Oregon. 

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