Court: Lawsuit Against Satellite Radio Company Can Proceed

Last updated Wednesday, April 18, 2007 8:56 PM CDT in News

By John Lyon
The Morning News

    LITTLE ROCK -- An Arkansas man's lawsuit alleging XM Satellite Radio falsely advertises its music channels as 100 percent commercial-free can proceed in U.S. District Court, at least for now, a federal appeals panel ruled Wednesday.

    The 8th U.S. Circuit Court of Appeals in St. Louis affirmed a district court judge's decision to deny a motion by Washington, D.C.-based XM Radio to dismiss or stay proceedings in the suit filed by Pulaski County resident Matthew Enderlin.

    Enderlin filed the suit in January 2006 in federal court in Little Rock. The suit alleges XM Radio's claim that its music channels, which are available for a subscription fee, are free of commercials is "false, misleading and deceptive" because the channels' programming includes "promotional and advertisement segments."

    Enderlin alleges the company's commercial-free promise violates the Arkansas Deceptive Trade Practices Act and similar statutes in 41 other states and the District of Columbia. He is seeking punitive damages and a court order that XM Radio no longer advertise its music channels as commercial-free.

    He also is seeking to have the suit certified as a class-action suit so all XM Radio customers can be considered plaintiffs.

    XM Radio has said the suit is without merit and the company does not air commercials on its music channels.

    The company filed a motion last year for dismissal or, alternatively, a stay of the proceedings pending arbitration. It argued the case should not proceed in court because the customer service agreement it entered into with Enderlin contains a clause requiring that he submit any claims to arbitration.

    Enderlin challenged the validity of the clause requiring arbitration, calling it "unconscionable."

    A U.S. District Court judge denied the company's motion, and the 8th Circuit on Wednesday affirmed that ruling.

    The appellate court said that although the customer service agreement does contain an arbitration clause, it makes an exception for some claims -- including claims based on the arbitration clause.

    Enderlin's challenge of the validity of the arbitration clause qualifies as an excepted claim, and therefore the district court was correct in ruling that "it was for the court to determine the threshold issue of arbitrability," Judge Morris Arnold wrote in the appellate court's decision.

    Judges William Riley and Pasco Bowman concurred in the decision.

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    Reader Comments (13 comment(s))


    The following comments are provided by readers and are the sole responsibility of their authors. The Morning News does not review comments before their publication, nor do we guarantee their accuracy. By publishing a comment here you agree to abide by our comment policy. If you see a comment that violates our policy, please notify the web editor.

    Sirius Subscriber wrote on Apr 19, 2007 7:58 AM:

    " I've listened to XM radio quite a bit and not one time have I ever heard a commercial. Occassionally in between songs they'll mention other music stations that they have available, but they do not air commercials. Sounds like this guy is a little short of money and is trying to find some. "

    Ex- xm customer wrote on Apr 19, 2007 8:16 AM:

    " And there's a reason for the "ex". Channel 22, the mix has commercials all the time. I cancelled my subscription, wrote them a nasty e-mail, and asked for my money back. Every 1-800-make-a-million advertiser is on there. Call them what you want, they're commercials that advertise junk, and I don't pay to hear commercials. The less popular stations are all music, but no one listens to them. "

    Current Happy Sub wrote on Apr 19, 2007 10:38 AM:

    " First of all as of Jan 06 channels 11, 21, 22, and 24 did not have any commercials. Now they have commercials on those channels now because of a lawsuit filed by Clear Channel who programs them and has a contract through 2008. That CC lawsuit didn't introduce commercials on those 4 channels till April 2006, which XM made in a statement to XM listeners in March. Now since then XM has said "Most Commercial Free Music Channels" not "100% Commercial Free" which is true since without those commercial stations XM has 69 Sirius has 68. Since the lawsuit XM cloned those stations with commercial free versions. "

    Linda Proctor wrote on Apr 19, 2007 12:57 PM:

    " What a total bunch of hogwash. Has Mr. Enderlin anything better to do with his time - the court's time - and the taxpayer's money? I hope he loses and is required to reimburse XM for all legal fees. Now, that, would be justice well served. "

    This is why I have Sirius... wrote on Apr 19, 2007 5:29 PM:

    " There are NO commercials on Sirius, except on Howard 100 and Howard 101. Those commercials are often just as funny as his programming, and have been a part of his show for 20 years. As for commercials on XM, this is why the two companies need to merge. To kick Terrestrial Radio out of the programming mix. Wanna file a lawsuit? File one for putting Kidd Kraddoc(sic?) back on the air on 105.7. And have you actually listend to Local stations recently, you get one song, then several minutes of commercials. one song, then several minutes of commercials.one song, then several minutes of commercials.one song, then several minutes of commercials.one song, then several minutes of commercials.one song, then several minutes of commercials.one song, then several minutes of commercials.one song, then several minutes of commercials.one song, then several minutes of commercials.one song, then several minutes of commercials.one song, then several minutes of commercials.one song, then several minutes of commercials. See my point... "

    xm sirius sub wrote on Apr 20, 2007 10:09 AM:

    " i agree with this totally... i have both xm and sirius, and it's really frustrating the commercials... more so on xm "

    Current subscriber wrote on Apr 20, 2007 10:13 AM:

    " I'm on the XM bandwagon and have been a subscriber for 5+ years now. The commercials have definitely gotten much worse. In the beginning--when they made no claims of being commercial free--the commercial were not too bad. I'd hear maybe 2 or 3 commercials per hour. Now it is ridiculous. On the talk stations, it's an all the time thing. And like someone else said, it's all 1-800-loseweight or get rich or viagra or whatever the scheme of the week is. It is ridiculous. I called to cancel and got a free 6 months--otherwise I'd be long gone as a subscriber. "

    Matt wrote on Apr 20, 2007 1:22 PM:

    " I have been thinking to switch to Sirius. XM seems to be sneaking more commercials in here and there. Guess it depends on what channels you listen to. When I here them I turn the CD on. I wish GM vehicles would factory install a system that works with both service providers, then it would not be an big issue to change. "

    AndyG wrote on Apr 22, 2007 7:21 PM:

    " Been a subscriber for over a year, now hearing way too many commercials. It's the slow leak that we all knew was coming into the pay service. And Linda Proctor, with that attitude, corporations would be able to shaft the consumers every which way but Sunday like they enjoy trying to do but thankfully, we have a legal system in place where you can keep them in check. People like you disgust me. We're canceling our XM immediately. "

    JonS wrote on Apr 23, 2007 11:25 AM:

    " Thats the reason why I got XM is for no commercials but on ch. 20-25 I get the darn 1-800... commercials and its ticking me off. I'm about ready to switch to sirrus because my brother has it and he has no commercial on his sirrus!!!! "

    Patrick wrote on Apr 24, 2007 2:20 AM:

    " Hey - at least its less commercials than regular radio, has higher sound quality and guess what - in a year it won't matter if you have Sirrius or XM it'll all be the same. And for $15 a month, its worth it for me to not have to hear local trash and crappy DJ's rattling on. "

    Dave wrote on Apr 24, 2007 10:35 AM:

    " For those who say there are no commercials, what would you call the incessant "Go To My PC" commercials where they repeat "Go To My PC" a thousand "Go To My PC" times per "Go To My PC" fricken commercial spot? "

    xm - XL COMEDY LISTENER wrote on Apr 25, 2007 2:12 PM:

    " I love tyhe XM XL comedy channel, but the intrusive, annoying, repetitive and low-common-denominator commercials are a major turn-off. I will not re-up when my sub ends. "


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