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hundred dollars for each violation of the TCPA or, in the alternative, treble damages of up to fifteen
hundred 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 any violations of the TCPA in the
future.
These purported class action 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.), Yefim Elikman v. Sirius XM Radio, Inc. and Career Horizons, Inc., No. 1:15-cv-02093
(N.D. Ill.), and Anthony Parker v. Sirius XM Radio, Inc., No. 8:15-cv-01710-JSM-EAJ (M.D. Fla).
These actions were commenced in February 2012, January 2013, April 2015 and July 2015,
respectively. Information concerning each of these actions is publicly available in court filings under
their docket numbers.
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 call center vendors in
connection with these claims and intend to preserve and pursue our rights to recover from these
entities; however, no assurance can be made as to our ability to fully recover all claims we may
have against these entities.
Pre-1972 Sound Recording Matters. In August 2013, SoundExchange, Inc. filed a complaint in
the United States District Court for the District of Columbia alleging that we underpaid royalties for
statutory licenses during the 2007-2012 period in violation of the regulations established by the
Copyright Royalty Board for that period. SoundExchange principally alleges that we improperly
reduced our calculation of gross revenues, on which the royalty payments are based, by deducting
non-recognized revenue attributable to pre-1972 recordings and Premier package revenue that is
not “separately charged” as required by the regulations. SoundExchange is seeking compensatory
damages of not less than $50,000 and up to $100,000 or more, payment of late fees and interest,
and attorneys’ fees and costs.
In August 2014, the United States District Court for the District of Columbia granted our motion
to dismiss the complaint without prejudice on the grounds that the case properly should be pursued
before the Copyright Royalty Board rather than the district court. In December 2014,
SoundExchange filed a petition with the Copyright Royalty Board requesting an order interpreting
the applicable regulations.
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. Information
concerning each of these actions is publicly available in filings under their docket numbers.
In addition, since 2013, we have been named as a defendant in several suits, including
putative class action suits, challenging our use and public performance via satellite radio and the
Internet of sound recordings fixed prior to February 15, 1972 (“pre-1972 recordings”) under various
state laws. In June 2015, we settled the suit brought by Capitol Records LLC, Sony Music
Entertainment, UMG Recordings, Inc., Warner Music Group Corp. and ABKCO Music & Records,
Inc. relating to our use and public performance of pre-1972 recordings for $210,000 which amount
was paid in July 2015. These settling record companies claim to own, control or otherwise have the
right to settle with respect to approximately 85% of the pre-1972 recordings we have historically
played. We have also entered into certain direct licenses with other owners of pre-1972 recordings,
which in many cases include releases of any claims associated with our use of pre-1972
recordings. The portion of the June 2015 settlement covering the remaining future service periods is
being amortized to Revenue share and royalties within our statements of comprehensive income
through December 2017 and as of December 31, 2015, $39,808 was recorded to Prepaid expenses
F-32
SIRIUS XM HOLDINGS INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
(Dollars and shares in thousands, except per share amounts)