The Federal Trade Commission and the Attorney General for the State of New York (NY AG) recently filed a joint lawsuit against Wisconsin based Quincy Bioscience, marketers of a product called Prevagen. While the heart of the complaint centers on the substantiation of claims that Prevagen alleviates memory loss, it's worth noting that the FTC and NY AG jointly filed this case.
As previously reported, the FTC has pursued several actions involving health and wellness claims. This case is part of that effort, as the FTC and NY AG allege significant shortcomings in the testing for the product's capabilities. For example, the lawsuit alleges that the tests failed to show that consumer memories meaningfully improve after they used the product and that the body does not process the key ingredient in a way that obtains the best benefits. The complaint further alleges that Quincy omitted test data in a chart used to market the product. The chart provided data from 8, 30 and 90 days of use. According to the complaint, had the results from 60 days been included, they would have shown a decline in user memory from 30 to 60 days.
While claims substantiation has been a core issue for the FTC for almost as long as it has existed, joint efforts between the FTC and state attorneys general have been a particular focus of the past few years. Previously, I was the Director of the Florida Attorney General's Consumer Protection Division, and while I was there the Directors of the FTC's Bureau of Consumer Protection made concerted efforts to work in close collaboration with state attorneys general. Florida, in particular, worked with the FTC on many matters quite closely and was awarded the inaugural FTC partnership award for its close collaboration. The FTC has gone on to similarly recognize its relationships with the New York and Colorado attorneys general, and the Los Angeles County Department of Consumer and Business Affairs.
The advantages of close collaboration are manifold. First and foremost, it's a force multiplier. State AGs can offer boots on the ground assistance by interviewing witnesses and conducting investigations that the FTC's D.C. or field offices can't easily undertake. Similarly, when FTC and state AG attorneys work on the case jointly, resources for processing discovery and formulating theories are doubled out of the box. From a managerial perspective, these serve two purposes: one, enforcement agencies can double the resources without increasing any financial expenditures; and two, the staff love the work. Low pay is a constant complaint among all enforcement attorneys, so when state AG and FTC attorneys share their investigative and litigation theories, they expand their professional networks and knowledge. And for state AGs, who normally appear only in state court, a chance to appear in federal court provides an opportunity for professional growth.
Collaborations are born for various reasons. FTC and state AG staff frequently attend the same conferences, where they make connections and learn about their colleagues' respective expertise, which often leads to a mutual effort. Further, there are some areas where the FTC has considerable knowledge and expertise, say, for example, in health claims substantiation, that state AGs may not possess. Lastly, settlement negotiations can have an extra sense of power and urgency when a team of state assistant attorneys general and FTC lawyers are arrayed across from the subject business's team of counsel.
The NY AG and the FTC may have teamed up in this case for some of the reasons set forth above, or perhaps for reasons completely unrelated. Whatever the motive, it seems highly likely that the FTC will continue its strong tradition of outreach and collaboration with state attorneys general in the years to come.