Judge pauses SoundExchange’s $3.4M Sonos suit until SiriusXM appeal is decided

A federal judge has taken SoundExchange’s lawsuit against Sonos off the active docket. Judge Hernán D. Vera of the US District Court for the Central District of California administratively closed the case on October 16, Music Business Worldwide reported. SoundExchange is seeking more than $3.4 million in unpaid royalties and fees.

The case stays closed “until further application by the parties or order of this Court,” the order says. All scheduled dates are canceled, and both sides must report on the status “within 90 days and every quarter thereafter.”

The pause follows a December 2025 ruling that tied the Sonos case to a separate fight in New York. That one is SoundExchange against SiriusXM, now before the Second Circuit. The appeal turns on whether SoundExchange has the legal right to sue services that don’t pay the royalties it collects.

What SoundExchange claims against Sonos

SoundExchange sued Sonos and Napster, legally Rhapsody International, in June 2025. The suit centers on Sonos Radio, a streaming service that launched in April 2020 and runs only on Sonos devices.

Like other radio-style services, it relied on the statutory license in US copyright law, which lets a service play commercially released recordings without negotiating individual deals with labels. In return it pays royalties at rates set by the Copyright Royalty Board. SoundExchange collects them and passes them on to artists and labels. It distributes around $1 billion a year, collected from approximately 3,600 licensees, according to its complaint against Sonos.

Napster powered the service, filed the required reports and made the payments for Sonos. SoundExchange says those stopped in May 2022, when Napster was acquired by Hivemind and Algorand, venture capital firms focused on crypto and blockchain, causing “a complete breakdown of reporting and payment for the Sonos Radio service.”

Sonos ended the partnership around April 2023 and moved the service’s back end to Deezer. SoundExchange claims the two companies owe at least $3,423,844.41. That covers unpaid royalties for October 2022 to April 2023, late fees dating back to May 2022, interest and audit costs, minus payments made so far. It argues that Sonos, as owner of the service, is liable alongside Napster for compliance with the statutory license, including royalty payments.

Napster never answered the complaint. The court clerk recorded it as in default in August 2025.

SoundExchange v. SiriusXM

SoundExchange sued SiriusXM in August 2023 in Virginia federal court, alleging the company underpaid by more than $150 million. The claim: SiriusXM booked part of its satellite radio revenue as streaming income, which is excluded from the satellite royalty calculation. The case moved to Manhattan, where Judge Naomi Reice Buchwald of the US District Court for the Southern District of New York threw it out in August 2025.

She found that the law naming SoundExchange as the collector does not give it the right to sue. She noted that the provision covering The MLC, which collects for songwriters and publishers, expressly allows that organization to bring lawsuits. SoundExchange called the ruling “entirely wrong on the law” and appealed that September. It now puts SiriusXM’s alleged underpayment above $400 million. SiriusXM denies the allegations.

In September 2025, Sonos asked Judge Vera to dismiss its case or pause it, arguing SoundExchange could not relitigate in California a question it had lost in New York. In December, Vera agreed SoundExchange was bound by the New York ruling. He paused the case instead of dismissing it, because the ruling could still be overturned on appeal.

What the Second Circuit heard

The appeals court heard arguments on September 25. Judge Richard Sullivan, one of the three panelists, raised the possibility of artists suing SiriusXM directly as a group, Courthouse News Service reported. SoundExchange lawyer Paul Clement dismissed the idea.

Judge Alison Nathan said from the bench: “We don’t want courts to interfere with an enforcement scheme that Congress has set up.” She added that it was “hard to read [Section] 114 as something other than a structure by which SoundExchange is designed to collect these royalties pursuant to the statute.”

SiriusXM lawyer Andrew Tulumello described SoundExchange as “a runaway, a collective, not accountable to anyone.”

The panel has not yet issued a ruling.