A federal judge has approved a 45-day pause in a lawsuit brought by SoundExchange Inc. against Sirius XM Radio Inc., giving the parties time to explore a potential settlement in a case centered on more than $150 million in alleged unpaid royalties.
U.S. District Judge Naomi Reice Buchwald of the Southern District of New York signed the stay order on May 23, halting proceedings as the sides attempt to resolve the matter outside of court. The stay came at the joint request of both companies, which told the court that continued litigation could disrupt “active and ongoing” settlement negotiations.
The suit, originally filed last year in the Eastern District of Virginia, accuses SiriusXM of underreporting royalties owed by overvaluing the webcasting component of its bundled subscription offerings. SoundExchange, the nonprofit that collects and distributes digital performance royalties to artists and labels, claims SiriusXM owes over $150 million in back payments.
SiriusXM, which has denied the allegations, asked to move the case to New York, arguing that its royalty calculations and related operations are managed out of its Manhattan headquarters. The court agreed to the transfer earlier this year but denied the company’s motion to dismiss the case for lack of jurisdiction.
While the stay temporarily halts litigation, the court made clear that the pause is conditional. If a settlement is reached during the 45-day period, the parties are expected to file a motion for dismissal. If negotiations are still progressing but unresolved, they may request an extension. Should talks collapse, proceedings would resume.
The dispute adds to a broader debate in the audio industry over how royalties are structured and calculated in an era of bundled services and hybrid content offerings. SoundExchange Chief Executive Michael Huppe previously said that attempts to resolve the issue privately had failed, prompting the group to pursue legal action.
SiriusXM, for its part, has defended its royalty practices and noted it has paid more than $5 billion to artists and rights holders over the past decade.
