Unraveling a Tangled Net of Claims: Jury Split on a Jellyfish-Derived Supplement Product | Venable LLP

In February 2024, a New York federal jury returned a split verdict in the New York attorney general’s lengthy battle against Quincy Bioscience, finding that certain of Quincy’s efficacy and establishment claims for a dietary supplement called Prevagen were materially misleading. Quincy advertises that Prevagen improves memory through an active ingredient derived from jellyfish.

The Federal Trade Commission (FTC) and the New York AG jointly brought the case against Quincy in 2017, alleging its marketing of Prevagen was unfair, deceptive, or false advertising in violation of Sections 5 and 12 of the Federal Trade Commission Act, and New York General Business Law Sections 349 and 350, and for repeated fraudulent acts under New York Executive Law section 63(12). The New York AG sought injunctive relief and restitution from Quincy, and the FTC sought injunctive relief. The FTC’s claim is still pending and was not a part of the New York jury trial. The FTC/AG tag team has become common after the AMG decision, and the FTC recently discussed this in its report to Congress on cooperation with AGs.

The Efficacy and Establishment Claims at Issue

The New York AG’s case involved two types of claims: efficacy claims and establishment claims. An efficacy claim suggests that the product either “performs the advertised functions or yields the advertised benefits” but does not include suggestions of scientific proof. An establishment claim suggests that the product’s effectiveness “has been scientifically established.” The AG was required to prove Prevagen’s efficacy claim was false and that the establishment claim lacked adequate substantiation. At trial, the New York AG was required to prove that:

• Quincy made the alleged claims about Prevagen
• The efficacy claim was false and the establishment claim unsubstantiated
• The claims were materially misleading

According to the New York AG, Quincy made false efficacy claims by stating that Prevagen improves memory within 90 days, reduces memory problems associated with aging, and provides other cognitive benefits. It also alleged that Quincy made false establishment claims by stating that Prevagen:

• “[H]as been clinically shown to improve memory”
• Was developed through “a landmark double-blind and placebo-controlled trial” demonstrating that Prevagen improved short-term memory over 90 days
• “[H]elps” or “is clinically shown to help” with memory problems associated with aging
• Supports “healthier brain function, a sharper mind, and clearer thinking”

The New York Jury Verdict

After a two-week trial, the jury returned a partial verdict for the New York AG, finding only some of Quincy’s statements were misleading. First, the jury found Quincy’s establishment claims about Prevagen lacked competent and reliable scientific evidence and therefore were misleading.

Separately, the jury found that Quincy’s statements that Prevagen reduces memory problems associated with aging and is clinically shown to reduce memory problems associated with aging were materially misleading. However, the jury determined other statements were not materially misleading, including the efficacy claim that Prevagen provides healthy brain function, a sharper mind, and clearer thinking, and the establishment claim that Prevagen is clinically shown to provide other cognitive benefits.

In the next phase of the case, the court will turn to damages for claims for which the jury found in favor of the New York AG and for the FTC’s claims for injunctive relief, and the court will be bound by the jury’s previous findings of fact. We will continue to monitor the results of the bench trial and any post-trial motions.