Judge Refuses to Toss SoundExchange vs. SiriusXM Lawsuit

A judge has denied SiriusXM’s request to toss SoundExchange’s $150 million unpaid royalties lawsuit, but agrees on a change of venue to NYC.

After SoundExchange sued SiriusXM last year for more than $150 million in unpaid royalties, the satellite radio giant moved to dismiss the case for “lack of personal jurisdiction,” or at least requested that the case should be transferred to a different venue. Now, the court has denied SiriusXM’s request for dismissal, but has agreed to move the trial to the Southern District of New York.

“Although this court […] has specific personal jurisdiction over [SiriusXM], the court finds that the interests of justice and convenience of the parties and potential witnesses warrants transferring this case to the Southern District Court of New York,” writes US District Judge Patricia Tolliver Giles in the decision, dated July 15.

The initial lawsuit was filed in a Virginia federal court in August 2023 by SoundExchange, which collects royalties for the use of recordings on non-digital platforms. The filing alleges that SiriusXM artificially inflated the revenue attributed to webcasting in its satellite and online radio packages, amounting to $150 million in withheld royalties. SoundExchange alleges that SiriusXM’s exclusion goes far beyond “avoiding double payment of paying multiple royalties on the same revenue,” instead asserting that “its webcasting service produces minimal marginal revenue at best.”

“We were surprised to see the press release from SoundExchange that it had filed a suit against SiriusXM in the United States District Court of the Eastern District of Virginia,” SiriusXM told Digital Music News at the time. “SiriusXM has always respected the rights of creators and artists, and over the past ten years has paid SoundExchange royalties of over $5 billion. Today, royalty payments from SiriusXM represent over 80% of the statutory royalties that SoundExchange distributes to record labels and performers.”

The following month, September 2023, SiriusXM filed a formal motion to dismiss the case, citing that New York City was a more suitable jurisdictional venue than Virginia, where the case was originally filed. In support of the move to transfer venues, SiriusXM’s SVP of corporate finance, Catherine Booker, emphasized that her company is headquartered in New York City, and SiriusXM “employs only five Virginia-based employees,” who manage network operations unrelated to finance or royalty calculations.