Antitrust Law Daily Wrap Up, ADVERTISING—N.D. Cal.: Sake company’s settlement over misleading labels gets preliminary approval, (Mar 3, 2026)

By Donielle Tigay Stutland, J.D.

The settlement provides that Takara will cease use of a gold emblem on the products' front labels unless they were manufactured in Japan.

The federal district court in the Northern District of California granted preliminary approval of a proposed settlement in a class action suit alleging alcohol maker Takara Sake USA Inc., allegedly misrepresented the Japanese origin on “Sho Chiku Bai” sake products on its labels. The parties’ settlement provided injunctive relief while fully preserving the class members’ rights to pursue monetary claims. The court found the parties’ settled relief was fair, reasonable, and adequate under Fed. R. Civ. P. 23(e)(2) (Tunick v. Takara Sake USA Inc., No. 3:23-cv-00572-TSH (N.D. Cal. Feb. 27, 2026)).

Background. A California consumer had brought claims against Takara Sake, alleging that several “Sho Chiku Bai” branded sake products were deceptively labeled as originating from Japan when they were in fact produced in California. Specifically, the consumer Tunick alleged that (1) Sho Chiku Bai Nigori Unfiltered Sake, (2) Sho Chiku Bai Classic Junmai; and (3) Sho Chiku Bai Tokubetsu Junmai are all deceptively labeled and marketed as made in Japan, when they are actually produced in California. The consumer claimed he purchased a bottle of Nigori Unfiltered Sake in San Diego believing it was made in Japan, pointing to Japanese lettering, a gold emblem stating, “Licensed by TaKaRa Japan, Since 1851,” and the Japanese brand name itself as misleading representations.

The complaint alleged violations of California’s Consumers Legal Remedies Act (CLRA), False Advertising Law (FAL), and Unfair Competition Law (UCL), along with breach of express and implied warranty and unjust enrichment. The case progressed through motions to dismiss and was narrowed to a set of specific products and sizes.

The consumer then moved for class certification on behalf of California purchasers dating back to February 2019. Earlier, the court certified a damages class for California retail purchasers of the specified products from February 2019 onward but excluded online purchasers because of individualized issues of whether or not a purchaser would have seen the actual label when purchasing bottles of the sake online. It also certified an injunctive relief class.

Settlement negotiations. The settlement came following a series of mediations. On March 1, 2024, the parties participated in a mediation session but were unable to reach a resolution. Following the court’s certification order, the parties renewed their efforts to resolve the matter and engaged in a mediation on November 24, 2025. The parties reached a settlement in principle, and they subsequently worked to formalize the settlement terms. On December 11, 2025, the parties filed a Notice of Settlement.

Settlement Terms. The court granted preliminary approval to the settlement. The settlement defined the class as “[a]ll persons who, during the Class Period, purchased one or more of the Products in California for purposes other than resale at a retail location or online,” and defined the class period as “February 8, 2019, through the present.” The court denied certification of a damages class under Rule 23(b)(3), for class members who purchased a product from an online retailer.

The settlement provides injunctive relief in that Takara Sake USA will continue its cessation of the Gold Emblem located on the front label of the Products which states “Licensed by TaKaRa Japan, Since 1851,” until and unless the Products are manufactured in Japan. It shall not be required to change or replace the labels on any Products manufactured and packaged prior to the Settlement Effective Date or to recall Products, advertisements, or any marketing materials distributed by or at the direction of Defendant prior to the Settlement Effective Date.

Rule 23 requirements. The court indicated that the settlement was potentially fair, reasonable, and adequate under Fed. R. Civ. P. 23(e)(2). First, the Settlement was reached following the parties participating in multiple mediations and arms-length negotiations over the course of months, including informal settlement discussions throughout nearly three years of litigation.

Class members retain all claims for monetary relief arising from past or future purchases. The court also stressed that as the Settlement provides the full relief available to the certified class, avoids the substantial risks and costs of pursuing uncertain damages, and preserves class members’ ability to seek monetary relief, it falls squarely within the range of possible approval.

The Case is No. 3:23-cv-00572-TSH.

Judge: Hixson, T.

Attorneys: Alan Gudino (Clarkson Law Firm, PC) for Colby Tunick. Chassica Soo (Squire Patton Boggs (US) LLP) for Takara Sake USA Inc.

Companies: Takara Sake USA Inc.

Cases: Advertising StateUnfairTradePractices CaliforniaNews