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Sirius XM Seeks To Block Consumers’ Transmission Of Claims Across State Lines

Posted  April 23, 2010

Sirius XM Radio, the holding company for the two satellite radio services operating in the U.S., is asking a federal court in Manhattan to dismiss state claims being asserted by class action representatives who reside in other states.

Sirius XM is asking Judge Harold Baer to rule that the class representatives do not have standing to assert claims based on the laws of states in which they do not reside in Blessing et al.  v. Sirius XM Radio, Inc., No. 1:09-cv-10035-HB (S.D.N.Y. filed Dec. 7, 2009).  The named plaintiffs in the class action are 13 consumers from 10 states who subscribe to Sirius XM’s satellite radio services.  Sirius XM was formed in 2008 when Sirius Satellite Radio and XM Radio merged, reducing the number of satellite radio providers in the United States from two to one.

Plaintiffs allege, on behalf of themselves and a nationwide class, that since the merger, Sirius XM has increased prices and decreased services in violation of the federal antitrust laws, 44 states’ consumer protection laws, and New York contract law.

Sirius XM is now moving to dismiss the bulk of the state statutory claims for lack of standing.  Its primary argument is that the named plaintiffs – who hail from only nine of the 44 states under whose laws they complain – lack standing to assert claims under “laws of States where they do not reside” – i.e., the other 35 states.  The Sirius XM motion notes that plaintiffs’ assertion of those claims on behalf of a nationwide class does not cure their standing problem, because of “two related principles” – “First, a plaintiff must show standing for each claim that he asserts ….  Second, a plaintiff may not acquire standing by asserting a claim on behalf of other putative class members who allegedly would have standing to assert it.”  Therefore, says Sirius XM, those “other 35” state law claims must be dismissed.

These cited principles also provide the basis for Sirius XM’s broader beef against the plaintiffs’ antitrust bar.  Sirius XM points to Blessing as an example of “a recent trend where plaintiffs’ counsel have been attempting to assert – on behalf of putative classes comprised of residents of multiple States – violations of consumer protection laws in States where the named plaintiffs do not reside.”  It posits, however, that “[c]ourts have regularly dismissed such claims for lack of Article III standing,” and urges Judge Baer to do the same.

Sirius XM also seeks dismissal of certain state statutory claims for failure to state causes of action, and warns that it will move to dismiss the antitrust and common law claims on their merits at a later time.

Tagged in: Antitrust Litigation,