Sirius XM Wins Preliminary Approval of Class-Action Accord
Sirius XM Radio Inc. (SIRI) won a judge’s preliminary approval to settle a class-action lawsuit by a group of subscribers who claimed the satellite-radio company violated antitrust law by boosting prices after acquiring its only rival.
A hearing will be held Aug. 8 to determine whether the settlement, valued at $180 million, is “fair, reasonable and adequate to the class,” U.S. District Judge Harold Baer said, according to a filing yesterday in Manhattan. No cash payments will be made under the deal, court papers show.
Sirius Satellite Radio Inc. bought XM Satellite Holdings Inc., its only competitor, in 2008. A subscriber, Carl Blessing, sued in December 2009 claiming the company “abused its monopoly power” after the merger by raising prices, breaching subscriber contracts and making false and misleading statements to the public.
Baer certified the complaint as a class action in March. A settlement was reached before the judge ruled on whether New York-based Sirius XM violated antitrust law.
Patrick Reilly, a Sirius XM spokesman, and James Sabella, a lawyer for the subscribers, didn’t respond to e-mails seeking comment.
Under the settlement, Sirius agreed to not raise prices this year, deferring a plan to boost the monthly price by $2. Many class members paid a monthly multiradio charge of $8.99, according to court filings.
Former subscribers who canceled service would be entitled to one month of free service.
At the August hearing, lawyers for the class will seek approval for Sirius XM to pay as much as $13 million for legal fees and costs.
Sirius XM fell 1 cent to $2.22 at 4:30 p.m. New York time in Nasdaq Stock Market trading. The shares have risen 36 percent this year.
The case is Blessing v. Sirius XM Radio Inc., 09-10035, U.S. District Court, Southern District of New York (Manhattan.)
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