11/2015: The two-year Agreement ends, but the parties allow the Agreement to  

automatically renew. 

10/15/2023: TVE begins a sale process. As part of the due diligence process, TVE requests that Meltwater renew the Agreement for another two-year period, as opposed to the automatic one-year renewal under Section 5.2. Meltwater declines. 

3/2024: Meltwater proposes a new Agreement structure based on a “flat fee” model with adjusted pricing for TVE’s content.  

7/2024: TVE provides notice that it will not be renewing the Agreement. 

8/14/2024: Meltwater’s CEO reveals that Meltwater had not complied with the alleged “one concurrent user” cap. TVE begins to investigate Meltwater’s improper access and use of TVE’s content and discovers Meltwater had exceeded the concurrent user limits. 

11/15/2024: The Agreement terminates. 

11/18/2024: Plaintiff files the Complaint. The operative First Amended Complaint, filed 1/23/2025, alleging causes of action for breach of contract and breach of the implied covenants, tortious interference, and violations of the UCL. 

12/16/2024: TVE files the Cross-Complaint. The operative First Amended  

Cross-Complaint (“FACC”), filed 2/19/2025, alleges causes of action for: 

3/24/2025: Meltwater files this Demurrer with a Motion to Strike, followed by  

TVE’s Opposition (4/17/2025) and Meltwater’s Reply (4/23/2025). 

TENTATIVE RULING: DEMURRER OF PLAINTIFF/CROSS-DEFENDANT MELTWATER NEWS US INC. is OVERRULED. 

MOTION TO STRIKE OF PLAINTIFF/CROSS-DEFENDANT MELTWATER NEWS US INC. is DENIED. 

I. DEMURRER 

Meltwater demurs to each cause of action in the FACC on the grounds that TVE fails to allege sufficient facts to constitute the causes of action. 

The 1st cause of action is sufficiently pled. The crux of TVE’s breach of contract claim is that Meltwater breached Sections 2 and 4 of the Agreement by failing to pay the required additional concurrent user fees for each month that such additional concurrent users exceeded the “one concurrent user cap,” and by failing to use all commercially reasonable means to detect its end clients’ use of TVE’s services in a way that exceeded one concurrent user. (FACC, ¶¶ 55-56.) Sections 2 and 4 of the Agreement required Meltwater to pay fees in exchange for TVE’s Services as set forth under Schedule 1 and Appendix B. (Id., ¶ 50; Exh. 1, §§ 2.1, 4.1.) Under Schedule 1, Meltwater was to pay “base fees” on a “per client basis” (meaning “a fee for each individual client Meltwater signs up to receive content provided by TVE”). (Id., Sched. 1, § 1.) For each type of client, Meltwater was required to use “all commercially reasonable efforts” to ensure that TVE’s content was “restricted to user per client.” (Id., ¶ 52, Exh. 1, Sched. 1, § 1, emphasis added.) Schedule 1 also states, “Additional users are charged at $500.00 per concurrent user required per month.” (Id., ¶ 51, Exh. 1, Sched. 1, § 1.)1 Appendix B states, “Recognizing that [Meltwater] has a diverse set of customers with different needs, TVE proposes the products and base pricing for the US and Canadian markets only described in the table below.” (Id., App., B, § 2.1.) The table provides wholesale pricing for all four types of clients and expressly designates “1” under the “Concurrent Users” column, stating “$500 for each additional concurrent user” in a footnote to the column. (Id., App., B, § 2.) The same section states, Meltwater “will market the TVE product to its customers at a retail price that [Meltwater] will determine while paying TVE the wholesale price(s) detailed below” (i.e. in the “Wholesale Pricing” column of the above-described table.) (Id., App., B, § 2.2.) The section further states, “At the annual anniversary of the signed agreement for a given country, both parties will examine the wholesale pricing to ensure that both parties feel that the results are meeting expectations.” (Id., App., B, § 2.2.2.) 

In its Demurrer, Meltwater sets forth various arguments challenging TVE’s interpretation of the Agreement. The Court is not persuaded by these arguments. First, Meltwater argues that the Agreement does not specify a cap on authorized concurrent users per client. In other words, Meltwater disputes that it agreed to a “one-user per client cap.” In the Court’s view, while the Agreement and the attached Schedule 1 and Appendix B do not explicitly use the phrase “one-user per client cap,” this term can reasonably be inferred by the language of the other fee-related terms. The Agreement clearly expresses the intent of the parties to have a “user per client” model with $500 fees for all additional concurrent users. (Id., ¶ 51, Exh. 1, Sched. 1, § 1.) Likewise, the Agreement clearly designates “1” concurrent user for the US and Canada markets, while also requiring $500 fees for all additional concurrent user. (Id., App., B, § 2.) While Meltwater argues that Appendix B does not supersede Schedule 1’s fee payment terms, the Court does not see these terms as contradictory. Rather, Appendix B merely clarifies the meaning of “user per client” as used in Schedule 1.  

Second, to the extent that Meltwater is arguing that the above Appendix B terms were merely a “proposal” or an “offer” expressly subject to reexamination, there are no allegations that such “proposed” terms were in fact changed during such reexamination or otherwise. (See Id., ¶¶ 32, 55.) Without information to the contrary, the Court must construe the initial terms as the final terms for the purpose of this Demurrer. Even further, given that Appendix B itself provides terms for the reexamination of the proposed fee terms after a trial period, the Court declines to construe the term “proposes” as offer language, but rather a starting point from which the parties could renegotiate, as needed. (Id., Exh. 1, App., B, § 2.1.) When considered in context of the entire Agreement, Meltwater places too much importance on a single word compared to the Agreement as a whole.  

Third, although Meltwater argues that TVE “never indicated” concerns with or objections to Meltwater’s reporting or fees, such allegations not only rely on factual assertions that fall outside the face of the Complaint but also on Meltwater’s own FAC which is immaterial for purposes of evaluating whether the FACC is properly pled. (Mot., at 12, 15.) Further, it is not clear why TVE would have ever indicated such concerns when the crux of their misrepresentation claims is that Meltwater was concealing information about their concurrent users from their invoices. (FACC, ¶¶ 59, 68.) Assuming the truth of the FACC’s allegations indicating TVE did not have reason to know of Meltwater’s misrepresentations, TVE would have had no reason to express concerns or to object to Meltwater’s invoice practices. 

Fourth, Meltwater relies on the terms of the 2020 Amendment for Podcasts and Archiving (dated 4/27/2020) to suggest the parties did not intend any cap on users or user-based pricing. (RJN, Exh. 2.) Schedule A of this Amendment states, “Meltwater agrees to market and sell annual subscriptions to the Podcast Services at a rate to [TVE] of [redacted] per year, per client. Meltwater may charge its end user clients as it sees fit.” (Id., Sched. A, § 1.) Meltwater contends this provision reaffirmed the parties’ understanding that the fees for TVE’s services were based on the number of clients without regard to the number of users per client. However, the Amendment’s silence on an additional fee for concurrent users for podcasts and archiving services does not necessarily indicate the parties’ intent regarding fees for other services covered by the original Agreement. Neither the allegations in the FACC nor the Amendment itself expressly indicate that this provision was intended to “reaffirm” the parties’ initial intentions or the fee agreement for other services. Rather, the Amendment states that it “modifies” the Agreement to a limited extent. (Id., p. 1.) Thus, the Court is not persuaded that the 2020 Amendment (which governs podcasts and archiving services only) modifies the concurrent user fee provisions in the original Agreement. 

Critically, Meltwater does not offer a reasonable explanation for what the Schedule 1 provision stating, “Additional users are charged at $500.00 per concurrent user required per month” could have meant other than the intended “one-user per client cap,” as alleged by TVE. (FACC, ¶ 51, Exh. 1, Sched. 1, § 1.) The Court finds the fee provisions of the Agreement may reasonably be interpreted as intending to impose a “one-user per client cap” for additional fees, as TVE suggests. (Performance Plastering v. Richmond American Homes of Cal., Inc. (2007) 153 Cal.App.4th 659, 672 (in ruling upon demurrers, courts defer to plaintiffs’ reasonable interpretations of contracts.)) At minimum, to the extent that these provisions create an ambiguity on the face of the Agreement, such ambiguity raises a reasonable factual dispute that should properly be resolved by the finder of fact, not at the demurrer stage. (George v. Automobile Club of Southern California (2011) 201 Cal.App.4th 1112, 1128 (“on a demurrer, the court must consider the sufficiency of the allegations, including any parol evidence allegations, to determine whether the contract is reasonably susceptible to plaintiff's alleged interpretation.”)) Therefore, Meltwater’s Demurrer to TVE’s 1st cause of action is OVERRULED. 

The 2nd and 3rd causes of action are sufficiently pled. The crux of TVE’s tortious misrepresentation claims is that Meltwater intentionally or negligently failed to accurately report its concurrent user data, and thus, underreported its fees, which prevented TVE from receiving accurate revenue and induced TVE to renew the parties’ Agreement under the existing terms. (FACC, ¶¶ 62, 64, 74.) Meltwater allegedly presented quarterly reporting invoices for its fees until July 2016, and thereafter, monthly invoices until November 2024. (Id., ¶ 26.) In each invoice, TVE alleges Meltwater misrepresented the fees that Meltwater owed under the Agreement by omitting Meltwater’s customers’ additional concurrent users. (Id., ¶ 28.) Specifically, Meltwater represented to TVE in each of these invoices that “none of its end clients had additional concurrent users other than the one permitted in the base subscription” and that the fees reported therein were a complete and truthful accounting of the fees owed during the applicable fee period. (Id., ¶¶ 59-60, 68-69.) 

In its Demurrer, Meltwater argues TVE fails to allege harm from Meltwater’s purported fraud or negligence beyond what was already owed to TVE under the Agreement. (Mot., at 19.) As a result, Meltwater contends the tortious misrepresentation claims are barred by the economic loss rule. “The economic loss rule requires a [contractual party] to recover in contract for purely economic loss due to disappointed expectations, unless [the party] can demonstrate harm above and beyond a broken contractual promise.”  

(Rattagan v. Uber Technologies, Inc. (2024) 17 Cal.5th 1, 20, quoting Robinson Helicopter v. Dana Corp. (2004) 34 Cal.4th 979, 988.) Under this rule, “there is no recovery in tort for negligently inflicted ‘purely economic losses,’ meaning financial harm unaccompanied by physical or property damage.” (Rattagan, supra, 17 Cal.5th 1, 20.) However, “the economic loss rule does not apply to limit recovery for¿intentional tort claims like fraud.” (Id., at 38, emphasis added; Id., at 44 (“A case in which the plaintiff sues a contractual party for fraud based on conduct committed during the course of a contractual relationship falls outside the economic loss doctrine.”)) “California case law similarly has viewed fraud by concealment on equal footing with fraud by affirmative misrepresentation.” (Id., at 39.) Further, courts consider negligent misrepresentation claims as more akin to fraud than negligence for the purposes of applying the economic loss rule. (Sheen v. Wells Fargo Bank, N.A. (2022) 12 Cal.5th 905, 943 (holding that denial of a negligence claim under the economic loss rule did not foreclose alternate avenues of relief, for example, by asserting a cause of action for negligent misrepresentation); Bily v. Arthur Young & Co. (1992) 3 Cal.4th 370, 407 (“Negligent misrepresentation is a separate and distinct tort, a species of the tort of deceit”); Moore v. Centrelake Medical Group, Inc. (2022) 83 Cal.App.5th 515, 535–536, quoting Sheen, supra, 12 Cal.5th at 943 (“[N]egligent misrepresentation is a separate and distinct tort from negligence.”))2 “California public policy strongly supports imposing a tort duty on contractual parties to refrain from fraudulent deceit and favors enforcement of valid fraud actions, which the Legislature has facilitated through the enactment of the general fraud statute. Thus, the analysis focuses on whether the plaintiff can establish the elements of the cause of action independently of the parties' contractual rights and obligations.” (Rattagan, supra, 17 Cal.5th at 44, emphasis added.) 

Here, TVE is not simply seeking duplicate recovery for Meltwater’s alleged breach of the Agreement. Meltwater’s economic loss argument entirely ignores the allegations that TVE was harmed by the misrepresentations in that TVE was induced into maintaining the same base service level pricing for over 10 years, causing TVE’s total value as an acquisition target to be reduced over time due to Meltwater’s alleged concealment of its true users. (FACC, ¶¶ 64, 74.) In other words, it is not simply Meltwater’s failure to pay appropriate fees under the Agreement that harmed TVE, but Meltwater’s systematic underreporting of user data which misled TVE into renewing the Agreement based on misinformation about material terms of the contract. In the Court’s view, the nature of the harm underlying TVE’s tortious misrepresentation claims is sufficiently independent from the parties’ contractual rights and obligations under the Agreement. Further, it cannot be said that TVE reasonably contemplated that Meltwater would deceive TVE by underreporting concurrent user data. (Robinson Helicopter, supra, 34 Cal.4th at 993 (“[A] party to a contract cannot rationally calculate the possibility that the other party will deliberately misrepresent terms critical to that contract.’ [Citation] No rational party would enter into a contract anticipating that they are or will be lied to.”); Rattagan, supra, 17 Cal.5th at 44 (“Parties generally do not enter a contract expecting that its terms will be intentionally ignored.”)) Thus, Meltwater has not demonstrated that TVE’s tortious misrepresentation claims are necessarily barred by the economic loss rule. (McKenney v. Purepac Pharmaceutical Co. (2008) 167 Cal.App.4th 72, 78-79, internal quotations omitted (“[A] demurrer based on an affirmative defense will be sustained only where the face of the complaint discloses that the action is necessarily barred by the defense.”)) Therefore, Meltwater’s Demurrer to TVE’s 2nd and 3rd causes of action is OVERRULED. 

II. MOTION TO STRIKE — DENIED 

Meltwater moves to strike the request for punitive damages from the FACC. Given the above analysis, the Court finds TVE’s allegations with respect to the fraud claim are sufficient to demonstrate the requisite “oppression, fraud, or malice” necessary to support a punitive damages request. (Civ. Code § 3294.) Therefore, Meltwater’s Motion to Strike is DENIED.