XM Radio 2014 Annual Report Download - page 140

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SoundExchange filed a petition with the Copyright Royalty Board requesting an order interpreting
the applicable regulations. The Copyright Royalty Board has requested that the parties submit briefs
regarding whether the agency properly has jurisdiction to interpret the regulations and adjudicate
this matter under the applicable statute. At this point we cannot estimate the reasonably possible
loss, or range of loss, which could be incurred if the plaintiffs were to prevail in the allegations, but
we believe we have substantial defenses to the claims asserted. We intend to defend these actions
vigorously.
This matter is titled SoundExchange, Inc. v. Sirius XM Radio, Inc.. No.13-cv-1290-RJL (D.D.C.),
and Determination of Rates and Terms for Preexisting Subscription Services and Satellite Digital
Audio Radio Services, United States Copyright Royalty Board, No. 2006-1 CRB DSTRA. Additional
information concerning each of these actions is publicly available in filings under their docket
numbers.
Telephone Consumer Protection Act Suits. We are a defendant in three purported class action
suits, which were commenced in February 2012, January 2013 and January 2015, in the United
States District Court for the Eastern District of Virginia, Newport News Division, and the United
States District Court for the Southern District of California that allege that we, or certain call center
vendors acting on our behalf, made numerous calls which violate provisions of the Telephone
Consumer Protection Act of 1991 (the “TCPA”). The plaintiffs in these actions allege, among other
things, that we called mobile phones using an automatic telephone dialing system without the
consumer’s prior consent or, alternatively, after the consumer revoked their prior consent and, in
one of the actions, that we violated the TCPA’s call time restrictions. The plaintiffs in these suits
are seeking various forms of relief, including statutory damages of 500 dollars for each violation of
the TCPA or, in the alternative, treble damages of up to 1,500 dollars for each knowing and willful
violation of the TCPA, as well as payment of interest, attorneys’ fees and costs, and certain
injunctive relief prohibiting violations of the TCPA in the future. We believe we have substantial
defenses to the claims asserted in these actions, and we intend to defend them vigorously.
We have notified certain of our call center vendors of these actions and requested that they
defend and indemnify us against these claims pursuant to the provisions of their existing or former
agreements with us. We believe we have valid contractual claims against certain call center
vendors in connection with these claims and intend to preserve and pursue our rights to recover
from these entities.
These cases are titled Erik Knutson v. Sirius XM Radio Inc., No. 12-cv-0418-AJB-NLS (S.D.
Cal.), Francis W. Hooker v. Sirius XM Radio, Inc., No. 4:13-cv-3 (E.D. Va.) and Brian Trenz v.
Sirius XM Holdings, Inc. and Toyota Motor Sales, U.S.A., Inc., No. 15-cv-0044L-BLM (S.D. Cal).
Additional information concerning each of these actions is publicly available in court filings under
their docket numbers.
With respect to the matters described above under the captions “Pre-1972 Sound Recording
Matters” and “Telephone Consumer Protection Act Suits”, we have determined, based on our
current knowledge, that the amount of loss or range of loss, that is reasonably possible is not
reasonably estimable. However, these matters are inherently unpredictable and subject to significant
uncertainties, many of which are beyond our control. As such, there can be no assurance that the
final outcome of these matters will not materially and adversely affect our business, financial
condition, results of operations, or cash flows.
Other Matters. In the ordinary course of business, we are a defendant in various other lawsuits
and arbitration proceedings, including derivative actions; actions filed by subscribers, both on behalf
of themselves and on a class action basis; former employees; parties to contracts or leases; and
owners of patents, trademarks, copyrights or other intellectual property. None of these matters, in
our opinion, is likely to have a material adverse effect on our business, financial condition or results
of operations.
F-34
SIRIUS XM HOLDINGS INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
(Dollar amounts in thousands, unless otherwise stated)