A federal judge has granted a 45-day pause in the $150 million lawsuit filed by SoundExchange against SiriusXM, providing both parties with time to explore a potential settlement outside of court. The decision was approved by US District Judge Naomi Reice Buchwald on May 23 in the Southern District of New York, following a joint request indicating that negotiations were “active and ongoing.”
The lawsuit, which was originally filed in the Eastern District of Virginia, centers on allegations that SiriusXM underpaid royalties by manipulating the reported value of its webcasting services bundled with other subscription offerings. SoundExchange, which oversees the collection and distribution of digital performance royalties to recording artists and rights holders, claims that SiriusXM owes more than $150 million in unpaid royalties.
SoundExchange CEO Michael Huppe has previously said that attempts to settle the matter privately failed, prompting the organization to take legal action. SiriusXM has denied the allegations and pointed out that it has paid over $5 billion in royalties during the past decade. The company also successfully requested that the case be transferred to New York, arguing that its royalty operations are based at its Manhattan headquarters. However, the court refused to dismiss the case entirely.
In response to the lawsuit, SiriusXM has filed counterclaims asserting it actually overpaid royalties during the disputed periods. It also accused SoundExchange’s auditor, Adeptus Partners, of misconduct and bias. The satellite broadcaster is asking the court to disqualify the audit, label the auditor as non-independent, and award damages and legal costs.
The judge’s order pauses litigation but establishes next steps depending on how negotiations progress. If a settlement is finalized during the 45-day window, the parties are expected to jointly request a dismissal. If talks continue without resolution, the court may extend the stay. If discussions collapse, litigation will resume.
The outcome of this case could have broader implications for how royalties are calculated for digital services offered in bundles. Industry stakeholders are closely watching the proceedings, as a ruling could influence future compensation models for hybrid media services that combine satellite radio, streaming, and other digital audio offerings.
The court’s decision to approve the stay signals cautious optimism that both parties may still find common ground without a protracted legal battle. The next update in the case is expected by mid-July.