A federal judge has refused to throw out a class action lawsuit against SiriusXM. The suit, which accuses the satellite broadcaster of hiding a 21.4% “U.S. Music Royalty Fee” from subscribers, was originally raised by four Oregon residents in June 2024.
The plaintiffs in the case allege that SiriusXM engaged in a deceptive pricing scheme in which it falsely advertised its music plans at lower prices than it in fact charged. They assert that the broadcaster violated Oregon’s Unlawful Trade Practices Act (UTPA), and breached its duty of good faith and fair dealing.
SiriusXM filed a motion to dismiss the lawsuit in April 2025, arguing that 1) the lawsuit was filed too late, and 2) it should be denied as moot because SiriusXM has since changed its advertising practices with respect to the royalty fee, now including “all-in pricing” on all advertisements to conform with a new California law. The company said no reasonable consumer “would care to (or is entitled to) know anything more” than the “all-in” price of its products, and so that was all it needed to provide to avoid misleading the plaintiffs.
However, U.S. District Judge Michael H. Simon, in an 18-page opinion and order document, wrote that “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.”
Background
SiriusXM provides branded satellite radio and internet-only streaming plans to about 33.9 million consumers nationwide, including about 431,000 Oregonians.
Most SiriusXM subscribers use SiriusXM’s services in their automobiles. The opinion and order document reports that approximately 160 million vehicles operate with SiriusXM radios. These radios are installed in 84% of the new automobiles sold in the United States every year. These new vehicles come with free trials for SiriusXM, and SiriusXM then uses marketing efforts — such as mail, email and telemarketing calls — to convert free trial users into paying subscribers.
“In these advertisements, SiriusXM advertises the price of its music plans without disclosing or including the royalty fee,” wrote Judge Simon in the court order. “In other words, its advertisements did not state the ‘true’ price of the music plan after adding the cost of the royalty fee — nor do they even mention a royalty fee. Rather, promotional materials state in fine print, without further detail, that ‘fees and taxes apply’ to the cost of a monthly subscription.”
After a subscriber is enrolled, that subscriber’s music plan is automatically renewed until the subscriber affirmatively cancels. Beginning in 2009, Sirius XM added an additional flat monthly charge — the U.S. Music Royalty Fee — to the price of its monthly music plan charge. In 2009, the rate was 13.9%. The rate is now 21.4%.
According to court findings, “In 2023, SiriusXM collected $1.36 billion in royalty fee charges, an amount greater than what Sirius XM actually paid in music royalties.”
Moving Forward
Ruling that SiriusXM’s arguments lacked merit and, in some cases, were intentionally false and misleading, Judge Simon denied SiriusXM’s petition to dismiss the class action. 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 — a court order used to prevent future harm — to prevent future deceptive practices.
Read more about the judge’s decision here.
