Judge refuses to toss false advertising case brought by sake drinker

SAN FRANCISCO (CN) — Colby Tunick was browsing for an alcoholic drink in a San Diego store back in 2020 when he spotted Sho Chiku Bai unfiltered nigori sake.

Seeing the Sho Chiku Bai brand name and the kanji characters and katakana script on the bottle, he decided to purchase the rice-based beverage, believing it to be imported from Japan.

Tunick later found out that the sake was produced in California. He sued Takara Sake USA, the company that sells the sake, for false advertising in San Francisco federal court.

On Monday, U.S. Magistrate Judge Thomas S. Hixon allowed some of Tunick’s claims against Takara to proceed while rejecting others.

At the heart of the case is the phrase “Licensed by Takara Japan since 1851,” which appears on the sake bottles, along with the Japanese characters and script featured on some of the products. Tunick claims that the phrasing, along with the Japanese symbols, could be “plausibly understood” to mean that the sake has been produced by Takara in Japan since 1851.

Adding to the alleged deception, Tunick claims that Takara’s sake is placed on shelves alongside sakes that are made in Japan, and that the packaging of Takara’s sake produced in the USA is remarkably similar to the packaging of Takara’s sakes that are imported.

According to Tunick’s first amended complaint, the term “license” has a particular meaning in the context of sake and there are stipulations and limitations as to who may produce sake in Japan.

“Under these circumstances, the Court finds it plausible that reasonable consumers could interpret ‘Licensed by’ to mean that the Products are made in Japan,” Hixon wrote in the ruling. “In this context, along with the prominent Japanese characters, the brand name, and the strong historical and cultural associations between sake and Japan, the Court finds that a significant portion of the general consuming public or of targeted consumers, acting reasonably, could be misled.”

Takara argued that the back of the bottle clearly indicates that the sake is “produced and bottled” in Berkeley, California, along with “Product of U.S.A.” labeling.

Hixon disagreed, writing that “because the Court finds that the phrase ‘Licensed by Takara Japan, Since 1851’ could, in the context of sake, be considered deceptive, the Court does not conclude that the disclosures on the back of the label render the Products not misleading as a matter of law.”

Still, Hixon dismissed some of Tunick’s claims based on a lack of standing because not every bottle of Takara’s sake had misleading labeling that could deceive consumers.

In particular, various sizes of Takara’s Sho Chiku Bai classic junmai sake did not have the gold Japanese lettering or the “licensed by Takara Japan” label. These bottles also have a disclaimer on the front of the product stating that the sake is produced in California.

Takara further argued that Tunick’s express warranty claim could not proceed because the “licensed by Takara Japan” disclaimer on the sake could not be considered a “promise," but Hixon disagreed.

“Because Plaintiff’s allegations regarding the gold emblem and the ‘Licensed by Takara Japan’ are sufficient to state a claim under the reasonable consumer standard, they are likewise sufficient to state a claim for breach of express warranty,” the magistrate wrote.