"Commercial-Free" Lawsuit against XM allowed to proceed
Tags: 2, XM
Enderlin's suit filed in January 2006 alleges XM's claim that its music channels 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 XM's motion, and the 8th Circuit on Wednesday affirmed that ruling, and so the lawsuit can proceed. Fun fun!