SiriusXM to Seek Arbitration in Class Action Over 'Invented' Music Royalty Fee

August 22, 2023 |Fraud

Defendant SiriusXM will move the court on Sept. 18, or soon thereafter, to compel arbitration and stay a fraud class action involving its pricing policies, it said in a Friday notice (docket 3:23-cv-02680) of motion to compel arbitration in U.S. District Court for New Jersey in Trenton. In the May class action, plaintiffs Robyn Posternock, Muriel Salters and Philip Munning alleged SiriusXM falsely advertises its music plans at lower prices than it actually charges. The music service fails to include in its advertised and promised prices the amount of its “invented ‘U.S. Music Royalty Fee,'" which "increases the true plan price" by 21.4% above the advertised and promised price for each plan, said the complaint. SiriusXM “intentionally does not disclose the royalty fee in any of its advertising or fine print," it said. SiriusXM’s advertising says “fees and taxes apply,” but doesn’t state that the music royalty fee and state taxes are the only components of fees and taxes, it said. SiriusXM prevents consumers from learning about the “scheme” by “never thereafter sending its customers periodic bills or payment receipts,” it said. As the price of music plans increases – when a promotional rate expires – the U.S. music royalty fee, a flat 21.4% charge, “also increases,” alleges the complaint. None of SiriusXM’s competitors charges a separate royalty fee over and above their advertised music plan prices, it said. In its Friday motion, SiriusXM said plaintiffs “should be held to their promises” they agreed to in their customer agreements. The defendant cited a 2022 case, Parrella v. Sirius XM, in which a New Jersey court found that mutual assent to the customer agreement can be implied from plaintiffs’ payment, usage of the service and “extended relationship history,” with the music service. Plaintiffs' counsel, DeNittis Osefchen, represents plaintiffs Christopher Carovillano and Steven Brandt in a similar case in U.S. District Court for Southern New York (see 2306060004).