NEW YORK (TheStreet) -- Sirius XM (SIRI) shares are down 1.54% to $3.84 in early market trading on Thursday, after a U.S. judge ruled that the satellite radio broadcaster would have to face a class action lawsuit over the payment of royalties for songs created before 1972.
Yesterday's decision by Judge Philip Gutierrez follows a previous ruling in September by Gutierrez stating that the company was liable for copyright infringement for airing 1960s rock band The Turtles' music without paying them royalties.
The Sound Recording Amendment of 1971 extended federal copyright to recordings made on or after February 15, 1972 while recordings made before that date are covered under common law copyright of various jurisdictions.
"Sirius XM treats every single owner of a pre-1972 song the same, namely it doesn't pay them, so it was appropriate for this court to grant class certification," said Henry Gradstein, attorney for the plaintiffs in the case, according to Reuters.
Analysts say that the class action lawsuit opens up the possibility that Sirius and other streaming services like Pandora (P) could pay out damages in the millions and possibly billions, giving lawyers for the artists the leverage needed to possibly force a settlement.
If the lawsuit is successful, it may have wide ranging implications on how much Sirius and Pandora charge as well as what consumers pay for music streaming services,according to Forbes.
Separately, TheStreet Ratings team rates SIRIUS XM HOLDINGS INC as a Buy with a ratings score of B. TheStreet Ratings Team has this to say about their recommendation: