Second Circuit questions who can sue over missing royalties in SiriusXM case

A Second Circuit panel heard arguments in SoundExchange's $150 million case against SiriusXM, but the fight on appeal isn't really about the money yet, it's about whether SoundExchange can sue for it at all. A lower court had dismissed the case, ruling that SoundExchange may collect royalties on artists' behalf but that doesn't necessarily include the power to sue over them.

SoundExchange, which has operated as an independent nonprofit since 2003 and says it has distributed more than $5 billion to artists, argues Congress gave it enforcement authority over two decades ago and that every prior court agreed until this one. Judge Richard Sullivan floated the idea that artists could simply file a class action themselves, a suggestion SoundExchange's attorney flatly called ridiculous.

SiriusXM's attorney countered that SoundExchange has become an unaccountable enforcer capable of suing over any theory at any time. SoundExchange's underlying claim is that SiriusXM used accounting maneuvers to reclassify satellite traffic as streaming to avoid paying the higher radio royalty rate; the panel reserved ruling on the standing question.

The full dispatch is available from the source below.