Sirius XM settlement hits sour note

Monday, December 3, 2012

— Some satellite radio subscribers are asking an appeals court to overturn a class-action settlement between Sirius XM Radio Inc. and its customers, claiming that the class won too little while lawyers were awarded too much.

Attorneys for dissenting members of the class argued before a three-judge panel of the U.S. Court of Appeals in Manhattan last week that a lower court’s approval of the settlement valued at $180 million should be rejected. The appeals judges said they would rule later.

“This settlement has no meaningful value,” Paul Rothstein, a lawyer for the dissenting members, told the three appeals judges.

Subscribers sued SiriusXM Radio in 2009, claiming that it violated antitrust law when it raised prices after Sirius Satellite Radio acquired its only competitor, XM Satellite Radio, in 2008. They said Sirius broke promises it made in order to win merger approval from the Federal Communications Commission.

Sirius XM argued that the price increases were justified to cover higher costs.

In August 2011 Sirius XM won approval of the settlement that provided that the subscription price remained unchanged for a five-month period ended Dec. 31, 2011, and subscribers who canceled their plans could reconnect without a fee. The deal was valued at $180 million, although no subscriber received any money.

Business, Pages 24 on 12/03/2012