Second Circuit Questions SoundExchange's Standing in $150M SiriusXM Royalty Suit
Second Circuit questions if SoundExchange can sue SiriusXM for unpaid royalties or artists must sue individually.
Why it matters: The ruling could reshape how royalties are enforced and how class actions are structured in intellectual property disputes. This impacts IP counsel and litigators handling similar cases.
- SoundExchange sued SiriusXM in August 2023 over $150 million in claimed unpaid royalties.
- In August 2025, Judge Buchwald dismissed the lawsuit for lack of statutory standing under the Copyright Act.
- SoundExchange appealed; oral arguments held at the Second Circuit on September 25, 2026, focusing on standing.
- The court is considering if SoundExchange can represent artists or if each artist must bring individual claims.
On August 16, 2023, SoundExchange, a nonprofit authorized by Congress to collect and distribute digital performance royalties, filed a lawsuit against Sirius XM Radio Inc. alleging underpayment exceeding $150 million. The lawsuit was initially filed in the Eastern District of Virginia before being transferred to the Southern District of New York at Sirius XM's request.
On August 7, 2025, U.S. District Judge Naomi Reice Buchwald dismissed the case, ruling that Section 114 of the Copyright Act does not grant SoundExchange the right to litigate royalty disputes. Judge Buchwald emphasized that "enforcement is not synonymous with litigation" and that "SoundExchange exists to facilitate efficient royalty collection and distribution, not to champion the views and interests of copyright owners beyond royalty collection."
SoundExchange appealed the dismissal, and the U.S. Court of Appeals for the Second Circuit heard oral arguments on September 25, 2026. A critical issue before the court is whether SoundExchange has standing to sue on behalf of the artists it represents, or if individual artists must file their own claims for unpaid royalties.
The outcome could have broad implications for intellectual property litigation and how royalty rights are enforced. It raises questions about the role of nonprofit organizations authorized to collect royalties, and whether they can bring class-style lawsuits on behalf of multiple rights holders.
Michael Huppe, President and CEO of SoundExchange, has highlighted similar enforcement efforts, such as a lawsuit against AccuRadio for refusing to pay royalties, underscoring the ongoing challenges in ensuring creators receive due compensation.
By the numbers:
- $150 million — amount SoundExchange alleges SiriusXM underpaid in royalties
- August 16, 2023 — date SoundExchange filed initial lawsuit
- August 7, 2025 — date federal court dismissed the lawsuit for lack of standing
- September 25, 2026 — date Second Circuit heard oral arguments on the appeal
Yes, but: The Second Circuit's decision is pending, so it remains unclear whether SoundExchange will ultimately prevail on its standing to litigate royalty disputes on behalf of artists.
What's next: The court's ruling on SoundExchange's standing is expected later, which will clarify the future of collective royalty enforcement actions.