Federal judge approves Sirius XM settlement

By on Aug, 25 2011 with Comments 0

Just before a class action lawsuit over potential subscription price increases was due to go to trial Sirius XM reached a settlement with the lead plaintiff’s attorney. Some other subscribers covered by the class action settlement objected to the terms, but it has now been approved by the federal judge overseeing the case.

According to the Siriusbuzz website, which follows all aspects of the satellite radio company, some class members are considering an appeal of the decision by Judge Harold Baer Jr. They’re upset that the class action attorneys in Carl Blessing Et Al. vs Sirius XM Radio Inc. are getting paid $13 million, while no actual payment is being made to subscribers.

“One might conclude that class counsel did well to reach a settlement at all in view of the questionable liability in this case,” Judge Baer wrote in his final order. “More than one government agency assessed the merger and concluded that it did not have unlawful anti-competitive effects,” he wrote, then describing the investigations by the DOJ Antitrust Division and the FCC.

Judge Baer also rejected the idea that subscribers got nothing from the settlement. He noted that the settlement required Sirius XM to forego any price increase for more than five months beyond the price freeze deal it had cut with the FCC to get the merger of the two satellite radio companies approved.

“Some object that the award is illusory because Sirius XM would not have raised prices even without the Settlement. This theory fails because the evidence demonstrates that Sirius XM had every intention of raising prices beginning in August of this year, and had the go-ahead from the FCC to do so. In fact, the Settlement Agreement requires Sirius XM to forego some $180 million in fees,” Judge Baer said in his order. That, he estimated, was about 40% of the best possible recovery that the class action suit could have achieved – “a result that is fair and reasonable in the antitrust context.”

The judge also noted that if the class action plaintiffs had received a cash settlement of $180 million, the payments spread across 15 million class members would have amounted to an average of only $12 – an amount “so little that many members may not even have bothered to cash their checks.”

RBR-TVBR observation: Speaking from experience, we’ve received class action settlement checks for less than $12 and did deposit them at our bank. The main point, though, is that Judge Baer was skeptical that the Sirius XM subscribers would have been successful in winning at trial, so he’s made it plain that, in his view, the class action plaintiffs should be happy to get anything at all.

Filed Under Radio News

About The Author: RBR-TVBR has been reporting on the business of broadcasting for nearly three decades. Beholden to no one, it is independently owned.

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