Federal Trade Commission et al v. Quincy Bioscience Holding Company, Inc. et al

Filing 331

OPINION AND ORDER re: 306 MOTION in Limine to Exclude Plaintiffs' Experts. filed by Quincy Bioscience, LLC, Prevagen, Inc., Quincy Bioscience Holding Company, Inc., Quincy Bioscience Manufacturing, LLC, 303 MOTION in Limine to Exclude the Testimony of Defendants' Experts: Drs. David Schwartz, David Katz, Lee-Jen Wei, Mindy Kurzer, Richard Goodman, and David Gortler. filed by Federal Trade Commission, 220 MOTION for Summary Judgment . filed by Quincy Bioscience, LLC, Prevagen, Inc., Quincy Bioscience Holding Company, Inc., Quincy Bioscience Manufacturing, LLC.Following discovery regarding the defendants' development of Prevagen, defendants move for summary judgmen t. For the following reasons, defendants' motion for summary judgment is denied. Defendants also move to exclude the testimony, in whole or in part, of plaintiffs' experts, Ors. Sano, Wittes, Berg, and Malaspina. Dkt. No. 306. For the fol lowing reasons, defendants' motion is denied in part, and reserved in part. Plaintiffs move to exclude the testimony, in whole or in part, of defendants' experts: Ors. David Schwartz, David Katz, Lee-Jen Wi, Mindy Kurzer, Richard Goodman, and David Gortler. 0kt. No. 303. For the following reasons, plaintiffs' motion is granted in part, and reserved in part and further set forth in this Order. (Signed by Judge Louis L. Stanton on 12/19/2022) (rro)

Case 1:17-cv-00124-LLS Document 331 Filed 12/19/22 Page 1 of 22

ORIGINAL

LSDC SD~Y
DOCUMENT
ELECTRONICALLY FIL ED

UN I TED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
FEDERAL TRADE COMMISSION and

I DOC#:

I

TH E PEOPLE OF THE STATE OF NEW
YORK , by LETITIA JAMES , Attorney
General of the State of New York ,
Plaintiffs ,

DA TE F-IL-E-D:_
/ _U"T--1~/+
!--. 2,~ -- ___[J

17 Civ . 124

(LLS)

OPINION & ORDER

- agains t QU I NCY BIOSCI ENCE HOLDING
COMPANY , INC ., a corporation ;
QU I NCY BIOSCIENCE , LLC ,
liabi li ty company ;

a limited

PREVAGEN , INC ., a corporation
d/b/a/ SUGAR RIVER SUPPLEMENTS ;
QUINCY BI OSCIENCE
MANU FAC TUR I NG , LLC , a l imited
liabil i ty company ; and
MARK UNDERWOOD , i ndividually and as
an off i ce r o f QU I NCY BIOSCIENCE
HOLD I NG COMPANY , INC ., QUINCY
BIOSCI ENCE , LLC , AND PREVAGEN , INC .,
Defendants .

Plaintiffs Federal Trade Commission ( " FTC " ) and the Peop l e
of the State of New York , by the Attorney General of the State
of New York (" NY AG" and , together with FTC , "plaintiffs " )
bro u ght this action against Quincy Bioscience , Inc. , Quincy
Bioscience , LLC , Prevagen , Inc ., Quincy Bioscience
Manuf act u ring , LLC , and Mark Underwood (together " defendants " )
alleging violations of the Federal Trade Commission Act and New
1

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Yo r k l aw f or deceptive advertising of Prevagen , a dietary
s u pplement marketed by defendants , which purports to improve
memo r y .
On July 5 , 2022 , defendant Mark Underwood moved for , and
was granted , partial summary judgment in his favor for the
claims brought against him by the NY AG for lack of personal
j u ri s d i ction .
Fo ll owing discovery regarding the defendants ' development
of Prevagen , defendants move for summary judgment . For the
following reasons , defendants ' motion for summary judgment is
denied.
De f endants also move to exclude the testimony , in whole or
in part , of plaintiffs ' experts , Ors . Sano , Wittes , Berg , and
Malaspina . 0kt . No . 306 . For the following reasons , defendants '
motion is denied in part , and reserved in part .
Pl aintiffs move to exclude the testimony , in whole or in
part , of defendants ' experts : Ors . David Schwartz , David Katz ,
Lee - Jen Wi , Mindy Kurzer , Richard Goodman , and David Gortler .
0kt . No . 303 . For the following reasons , plaintiffs ' motion is
granted in part , and reserved in part .
BACKGROUND

Defendant Quincy Bioscience Holding Company , Inc. is a
Wisconsin corporation . Defendants ' Reply to Plaintiffs ' Response
to Rule 56 . 1 statement ("56 . 1 statementn)
2

(0kt. No . 281) .

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De fendants Qu i ncy Bioscience , LLC , Prevagen , Inc ., and Quincy
Bioscience Manufacturing , LLC are wholly owned subsidiaries of
Quincy . Id. Defendants market and sell Prevagen , a dietary
supplement that includes Apoaequorin as an active ingredient .
Id . Defendants advertise Prevagen through a variety of
p l atfo r ms. Id .
Wh i le deve l oping Prevagen , defendants conducted a
Randomized Control Test ("RCT " ) , referred to as the Madison
Memo r y Study , to determine the effectiveness of Prevagen ' s
ab i lity to improve memory .
De f endants assert the Madison Memory Study "was a
ran domi zed , doub l e - blind , placebo - controlled study designed to
ex a mi n e the effect of apoaequorin on cognitive function in older
a dults " that involved in 218 adults . Graham Deel . Ex . 1 at 2 , 4
(Dkt . No . 35) . Plaintiffs challenge the Madison Memory Study ' s
cla i m to be double - bl i nd . 56 . 1 statement at 61 . " The primary
ob j ect i ve of the Madison Memory Study was to determine whether
Pr ev a gen with apoaequorin (10 mg) improves quantitative measures
of cogn i tive func t ion in community dwelling , older adults ."
Gra ham Deel . Ex . 1 at 1 .
I n 2017 , the FTC and the NY AG brought this action against
defendant s, alleging that defendants '

advertising of Prevagen is

fa l s e advertising in violation of Sections 5 (a) and 12 of the
FTC Ac t, NY Exec . Law sec t ion 63(12 ) and NY GBL sections 349 and
3

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350 .

Complaint (" Comp. " ) at 26 - 29 (0kt . No . 1) . In their

complaint , plaintiffs alleged that the Madison Memory Study did
not support the defendants '

statements made in connection with

Prevagen's advertising . See generally , id . The FTC seeks
injunctive relief under Section 13(b) of the FTC Act . Id . at 30 .
The NY AG seeks both injunctive relief and monetary restitution.
Id.
In count I , the FTC pleads a false efficacy claim against
defendants' statements that Prevagen (1)
improves memory within 90 days ,

improves memory ,

(2)

(3) reduces memory problems

associated with aging , and (4) provides other cognitive benefits
(the "e fficacy statements " ) . Plaintiffs ' Opposition to
Defendants ' Motion for Summary Judgment ("Opp. to SJ ." ) at 1
(0kt No. 254) .
In count II , the FTC pleads a false establishment claim
against defendants'

statements that Prevagen (1) "has been

clinically shown to improve memory ," (2) was developed through
" a landmark double - blind and placebo controlled trial [that]
demonstrated Prevagen improved short - term memory,

learning , and

delayed recall over 90 days ," (3) "helps with memory problems
associated with aging ,"

(4) "is clinically shown to help with

mild memory problems associated with aging ," and (5)

supports

"healthier brain function, a sharper mind and clearer thinking"

4

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statements , this action is not a " proper case" for relief under
FTC Act Section 13(b) , the NY AG ' s claims are preempted by
federal law , the NY AG ' s claims are barred by the General
Bus i ness Law ' s safe harbor provisions , and the NY AG is barred
from seeking restitution in light of the Collins settlement .
LEGAL STANDARDS

I.

Summary Judgment
Summary judgment is warranted if , based upon admissible

ev i dence , " the movant shows that there is no genuine dispute as
to any material fact and the movant is entitled to judgment as a
matter of law ." Fed . R. Civ . P . 56(a) ; see Celotex Corp . v .
Catrett , 477 U. S . 317, 322

(1986) . In deciding a motion for

summary judgment , a court must "construe all evidence in the
light most favorable to the nonmoving party, drawing all
inferences and resolving all ambiguities in its favor ."
Dickerson v . Napolitano , 604 F . 3d 732 , 740

(2d Cir . 2010)

" Nevertheless , the non[ - ]moving party must come forward with
specific facts showing that there is a genuine issue of material
fact for trial. Conclusory allegations , conjecture, and
speculation ... are insufficient to create a genuine issue of
fact ." Joseph v . N. Shore Univ . Hosp ., 473 F . App'x 34, 36 (2d
Cir . 2012) (quoting Shannon v. N. Y. City Transit Auth ., 332 F . 3d
95 , 99 (2d Cir . 2003)) (internal citations omitted) (alterations in
the original).
6

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II .

The FTC Act

Section 5 of the FTC Act provides that "unfair methods of
competition in or affecting commerce , and unfair or deceptive
acts or practices in or affecting commerce , are hereby declared
unlawful. " 15 U. S . C . § 45(a) (1) ; Fed . Trade Comm ' n v . Verity
Int ' 1 , Ltd ., 443 F. 3d 48 , 54-55 (2d Cir . 2006) . Section 12 of
t h e FTC Act provides that "it shall be unlawful for any person ,
pa rt nership , or corporation to disseminate , or cause to be
d is semina ted , any false adver t isement-(1) By United States
ma i ls , or in or having an effect upon commerce , by any means ,
fo r t he purpose of inducing , or which is likely to induce ,
di r ect l y or indirectly the purchase of food , drugs , devices ,
s e r vices , or cosmetics ; or (2) By any means , for the purpose of
in d ucing , or which is likely to induce , directly or indirectly ,
the purcha se in or having an effect upon commerce , of food ,
drug s, devices , services , or cosmetics ." 15 U. S.C . § 52(a)

A

" f a lse advertisement means an advertisement , other than
labe l ing , which i s misleading in a material respect ." Id . at§
55 (a ) ( 1 ) .
Fa ls e adver t ising in violation of Section 12 is a deceptive
ac t o r practice i n violation of Section 5 . See id . at§

52(b) .

Th e re f ore , Section 12 and Section 5 are often " applied in tandem
as the ba s is for an FTC action against an alleged false
adver t iser ." Fed . Trade Comm ' n v . Direct Mktg . Concepts , Inc .,
7

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624 F . 3d 1 , 7-8

(1st Cir. 2010) ; see e . g ., Fed . Trade Comm ' n v .

COORGA Nutraceuticals Corp ., 201 F . Supp . 3d 1300 , 1308 ( D. Wyo.
2016) .
To prove deceptive advertising under the FTC Act , the FTC
has the burden to show : "[1] a representation , omission , or
practice , that [2] is likely to mislead consumers acting
reasonably under the circumstances , and [3] , the representation ,
omission , or practice is material ." Fed . Trade Comm ' n v . Quincy
Bioscience Holding Co. , Inc. , 753 F. App ' x 87 , 89 (2d Cir .
2019) ; Fed . Trade Comm ' n v . Med . Billers Networ k , Inc., 543 F .
Supp . 2d 283 , 304

(S . D. N. Y. 2008 ) . Each challenged

representation "must stand on its own merit, e v en if other
representations contain accurate , non - deceptive information. "
Med . Billers Network , Inc ., 543 F . Supp . 2d at 304.

III . Federal Rule of Evidence 702
The admissibility of expert testimony is governed b y Federal
Rule o f Evidence 702 , which provides :
If scientific , technical , or other specialized knowledge will
assist the trier of fact to understand the evidence or to
determine a fact in issue , a witness qualified as an expert
by knowledge , skill , experience , training , or education , may
testify thereto in the form of an opinion or otherwise , if
( 1) the testimony is based upon sufficient facts or data,
8

( 2)

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the testimony is the product of reliable principles and
methods , and (3) the witness has applied the principles and
methods reliably to the facts of the case . Fed . R. Evidence
702 .
Under Rule 702 , "the trial judge must ensure that any and
all scientific testimony or evidence admitted is not only
rel evan t, b u t reliable ." Daubert v . Merrell Dow Pharmaceuticals ,
Inc ., 509 U. S . at 589 (1993 ) . While the "inquiry envisions by
Rule 702 is ... a flexible one ," the "gate keeping inquiry must be
ti ed to the facts of a particular case ." Amorgianos v . Nat ' l
R. R . Passenger Corp ., 303 F . 3d 256 , 266 (2d Cir . 2002 )

(citing

Daubert , 509 U. S . at 579 and Kumho Tire , Ltd . V. Carmichael , 526
U. S . 1 37 , 150 (1999))

(internal citations omitted)

(alterations

in the original) .
" The judge should only exclude the evidence if the flaw is
large enough that the expert lacks ' good grounds ' for his or her
conclusions ." Amorgianos , 303 F . 3d at 267 .

IV .

NY Law
A. General Business Law Sections 349 and 350

" To successfully assert a claim under General Business Law
§ 349 or§ 350 , a plaintiff must al l ege that a defendant has
engaged in (1) consumer - oriented conduct that is (2) materially
misleading and that (3) plaintiff suffered injury as a result of
9

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the allegedly deceptive act or practice ." Quincy Bioscience
Holding Co ., Inc ., 753 F . App ' x at 89 (citing Koch v . Acker ,
Merrall

&

Condit Co ., 18 N. Y. 3d 94 0 , 941

(2 0 12 ))

( internal

quotation marks omitted) .
B . New York Executive Law§ 63 ( 12 )
Under NY Exec . Law§ 63(12) , "[w]henever any person shall
engage in repeated fraudulent or illegal acts or otherwise
demonstrate persistent fraud or illegality in the carrying on,
conducting or transaction of business , the attorney general may
apply , in the name of the people of the state of New York , to
the supreme court of the state of New York , on notice of five
days , for an order enjoining the continuance of such business
activity or of any fraudulent or illegal acts , directing
restitution and damages . "

DISCUSSION

I . Whether Defendants ' Claims Regarding Prevagen Violated the
FTC Act is a Question of Material Fact
The Defendants are not moving for summary judgment for lack
of a genuine issue of material fact that representations
regarding the effectiveness of Prevagen while advertising that

10

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dietary supplement 1 were made. What parties disagree about is
whether the statements were misleading.
The FTC brings both "efficac y " and "establishment" claims
against Defendants' advertising of Prevagen. The FTC argues
there is a genuine issue of material fact about whether both the
efficacy claims and establishment claims were misleading .
Whether they are misleading depends on the level of
substantiation required to market each claim.
"An efficacy claim suggests that a product successfully
performs the advertised function or yields the advertised
benefit, but includes no suggestion of scientific proof of the
product's effectiveness. An establishment claim, by contrast,
suggests that a product's effectiveness or superiority has been
scientifically established." POM Wonderful, LLC v . Fed. Trade
Comm'n, 777 F.3d 478, 490 (D.C. Cir. 2015) (citing Removatron
Int'l Corp. v. Fed. Trade Comm'n, 884 F.2d 1489, 1492 n. 3 (1st
Cir. 1989) and Thomson Med. Co v . Fed. Trade Comm'n. 791 F.2d
189, 194

(D .C. Cir. 1986)) (internal citations omitted).

If an ad conveys an efficacy claim, the advertiser must
possess a "reasonable basis" for that claim. E.g. POM Wonderful ,
777 F.3d at 490. Even though it need not be specified in the ad,
to have a "reasonable basis" for the claim, the claims must have

1

Notably, the parties now agree that Prevagen constitutes a dietary
supplement; however , they disagree as to the impact of that label .

11

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the support of "competent and reliable scientific evidence."
COORGA Nutraceuticals Corp ., 201 F . Supp. 3d at 1309; see
"Dietary Supplements: An Advertising Guide for the Industry" at
9 ("the FTC typically requires claims about the efficacy or
safety of dietary supplements to be supported with 'compete nt
and reliable scientific evidence.'")
"[W]hat constitutes competent and reliable scientific
evidence

is a question of fact for expert interpretation. In

the case of dietary supplements or health related claims,
' competent and reliable scientific evidence' consists of ' tests,
analyses, research , studies , or other evidence based on the
expertise of professionals in the relevant area, that have been
conducted and evaluated in an objective manner by persons
qualified to do so, using procedures generally accepted in the
profession to yield accurate and reliable results .'" E.g., Fed .
Trade Comm ' n v . Alcoholism Cure Corp ., 2011 WL 13137951, at *27
(M . D. Fla . Sept . 16, 2011) , aff ' d sub nom . Fed . Trade Comm'n v .
Krotzer , 2013 WL 7860383 (11th Cir. May 3, 2013) (quoting Fed.
Trade Comm ' n v . Nat ' l Urological Grp., Inc., 645 F . Supp . 2d
1167, 1190 (N.D. Ga . 2008) , aff ' d,

356 F. App'x 358

(11th Cir .

2009)) (alterations in the original).
If an ad conveys an establishment claim, the level of
substantiation required for the claim depends on whether the
challenged claim is a specific or non - specific claim :
12

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If an establishment claim "states a specific type of
substantiation ," the "advertiser must possess the
specific substantiation claimed." Removatron , 884 F.2d
at 1492 , n . 3. If an ad instead conveys a non - specific
establishment claim-e . g ., an ad stating that a
product ' s efficacy is "medically proven " or making use
of " visual aids " that "clearly suggest that the claim
is based upon a foundation of scientific evidence "-the
advertiser "must possess evidence sufficient to
satisfy the relevant scientific community of the
claim ' s truth ." Bristol-Myers Co ., 102 F.T . C . 21 , 321
(1983) , aff ' d , 738 F . 2d 554 (2d Cir . 1984). The
Commission therefore " determines what evidence would
in fact establish such a claim in the relevant
scientific community " and " then compares the
advertisers ' substantiation evidence to that required
by the scientific community." Removatron , 884 F . 2d at
1498 .
POM Wonderful , 777 F.3d at 491 .
As such , each of the efficacy claims and the establishment
claims requires expert opinion that it is based upon sufficient
scientific evidence to satisfy the "relevant scientific
community of its truth " to comply with the FTC Act . So :
1 . whether Quincy ' s statements that Prevagen (1) improves
memory ,

( 2) improves memory within 90 days ,

( 3) reduces memory

problems associated with aging , and (4) provides other cognitive
benefits ,

(all efficacy claims) , are misleading will require

expert opinion on whether they are supported by competent and
reliable scientific evidence ;
2. whether Quincy ' s statements Prevagen (1)

"has been

clinically shown to improve memory ," (2) " helps with memory
problems associated with aging ," and (3) "is clinically shown to
help with mild memory problems associated with aging ," and (4)
13

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can support " healthier brain function , a sharper mind and
clearer thinking , "

(non - specific establishment claims) are

misleading will require expert opinion on whether Quincy has
sufficient evidence to satisfy the relevant scientific community
of that claim ' s truth ; and
3 . whether Quincy ' s statement that "a landmark double - blind
and placebo - controlled trial demonstrated Prevagen improved
short - term memory , learning , and delayed recall over 90 days , "
(a specific establishment claim) is misleading will require
expert testimony on whether the Madison Memory Study supports
that claim .
On this summary judgment motion the court applying the
efficacy and establishment tests , " must determine whether there
was uncontroverted evidence regarding :

(1) what sort of evidence

would sc i entifically establish the claims the Defendants made in
their infomercials ; and (2) whether the Defendants were actually
possessed of such evidence ." Direct Mktg , 624 F.3d at 8 - 9
(citing Removatron , 884 F . 2d at 1498) .
The defendants here have not shown such uncontroverted
evidence on those points as to support the entry of summary
judgment in their favor .
The thrust of the defendants ' argument for summary
judgment- and their motions in limine as it seeks the preclusion
of to Dr . Mary Sano and Dr . Wittes-is that plaintiffs , rather
14

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than applying the " competent and reliable scientific evidence "
standard described in the FTC ' s "Dietary Supplements : An
Advertising Guide for the Industry "

(the " FTC Guidance" ) , ha v e

simply presumed that a randomized clinical study is required to
support Prevagen ' s advertising claims . Defendants argue that
requiring an RCT artificially holds defendants to a higher "drug
level " substantiation standard than the standard required for
dietary supplements ' advertisements.
That argument misses the mark . The critical question for
trial does not turn on an interpretation of the FTC Guidance .
The question for trial is whether defendants had the necessar y
scientific evidence to support the claims defendants made while
adverti s ing Prevagen . That is an issue for the experts in the
field and is not necessarily limited or expanded in scope , as
discussed below , by experts '

reference to the FTC Guidance . Its

determination depends on the match between the defendants '
statements and the proof .
An RCT is not specifically required for the efficacy claims
for this level of substantiation . However , expert testimony may
show that it is required. If so , that will not represent a
h i gher standard than the FTC requires ; several other courts have
found that an RCT may be required to substantiate challenged
marketing statements . Fed . Trade Comm ' n v . Braswell , 2 00 5 WL
4227194 , at *10 (C.D . Cal . Sept . 27 , 2005)
15

(collecting cases)

Case 1:17-cv-00124-LLS Document 331 Filed 12/19/22 Page 15 of 22

Defendants are correct that , apart from the specific
establishment claim , which requires a double - blind and placebo controlled trial , other research conducted into the effects of
Prevagen and Apoaequorin may be considered in determining
whether their challenged claims were substantiated.
The lack of evidence of consumer perception does not mean
finding that the challenged statements were not misleading .
" Where the advertisers lack adequate substantiation evidence ,
they necessarily lack any reasonable basis for their claims. And
where the advertisers so lack a reasonable basis , their ads are
deceptive as a matter of law . " Direct Mktg . Concepts , Inc ., 624
F . 3d at 8 (citing Removatron , 884 F . 2d at 1498). Therefore ,
evidence of consumer perception is superfluous if the FTC proves
at trial that defendants did not possess the necessary
scientific substantiation to support the challenged statements .
There remains a genuine issue of fact for trial of what
constitutes " competent and reliable" scientific evidence
regarding the defendants ' efficiency claims and whether
defendants possessed specific substantiation for the FTC ' s
specific and non - specific establishment claims . The battle of
the experts on these points defeats defendants ' motion for
summary judgment .
II .

Motions in Limine to Exclude Experts
A. Defendants ' Motion to Exclude Plaintiffs' Testimony
16

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1. Dr . Sano and Dr. Wittes
Defendants challenge the testimony of Dr . Sano and Dr.
Wittes on the basis that they hold defendants to a higher , "gold
standard" than what is required under the FTC Guidelines .
Defendants argue that failure to apply the correct legal
standard renders their opinions irrelevant.
Defendants state that Dr . Sano fashioned "her own standard
by which to hold Quincy accountable , detailing the various
hurdles that she believes scientific evidence must clear to be
considered ' competent and reliable ' under the FTC Act and New
York law ." Defendants ' Motion to Exclude at 11 .

At great

length , defendants rehearse the amount of evidence favorable to
Quincy , which they claim Ors . Sano and Wittes disregarded. In
effect , Quincy argues the duty of the expert

(presumed to be

independent) is to form her opinion on the bases of the evidence
as a whole , resting on accepted principles .
But these experts are simply reviewed science related to
Prevagen and concluded that despite the other evidence , an
effective human clinical trial is necessary.
Defendants fault Ors . Sano and Wittes for failing to weigh
the defendants ' evidence in support of Prevagen .
The law does not specify what evidence the expert is to
take into consideration .

The appropriate response to the

17

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experts '

choice of omissions is to test that opinion at trial

through cross examination .
2 . Dr . Malaspina
Defendants argue that Dr. Malaspina does not have the
proper expertise to opine on the Seemingly Unrelated Regressions
("SUR " ) analysis because he is not an expert in the fields of
clinical trials and epidemiology and therefore lacks the
qua l ifications to testify about the SUR economic model . However,
an opinion on the SUR analysis requires an expertise in
economics , econometrics , and statistics , not clinical trials
epidemiology . As Dr . Malaspina is qualified as an expert in
economics , econometrics , and statics , he will be allowed to
testify to the econometric and statistical errors of the SUR
analysis conducted , which is relevant to the question to be
considered at trial.
B . Plaintiffs ' Motion to Exclude Defendants ' Experts
1. Ors .

Schwartz , Katz , and Wei

Plaintiffs challenge the admissibility of Ors . Schwartz ,
Katz , and Wei on the ground that their testimony constitutes
improper legal opinions . The experts are prohibited from opining
on the proper legal standard , which has been described in
detail, supra .

18

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The experts may also not opine on the development of the
FDA regulatory scheme or on Congress '

intent in passing certain

laws, such as the Dietary Supplement Health and Education Act .
2 . Dr. Kurz er
Dr. Kurzer is qualified to evaluate the quality of the
defendants ' scientific support for the challenged statements and
whether the studies conducted by defendants to substantiate
their marketing claims constitute competent and reliable
scientific evidence. However , Dr . Kurzer may not draw an
ultimate conclusion as to whether Prevagen impacts cognition or
memory.
Dr . Kurzer may not opine on any conclusion she draws based
upon her own "logic" and "common sense ." Under Federal Rule of
Evidence 702 , expert testimony must be the "product of reliable
principles and methods ," and conclusions based upon "logic" or
" common sense " may well be intuitive and subjective rather an
objective and testable principle or method .
C . Remaining Objections
Those objections raised in the defendants ' and plaintiffs '
motions in Limine that are not reso l ved by this opinion are
reserved for trial .

19

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III. Relief Sought
The FTC requests injunctive relief under Section 13(b) of
the FTC Act . Defendants argue that injunctive relief is
unavailable to the FTC because it is not a "proper case" for
relief under Section 13(b) , and the Collins qualifiers will
prevent any future violations.
" Generally ,

' [a]n injunction is a matter of equitable

discretion .'" E.E.O.C. v. KarenKim , Inc ., 698 F.3d 92 , 100 (2d
Cir . 2012) (quoting Winter v. Natural Res. Defense Council Inc. ,
555 U. S . 7 , 32 (2008)

(alteration in the original) . "[T]he

court 's power to grant injunctive relief survives discontinuance
of the illegal conduct ." Id .

(citing United States v . W. T .

Grant , 345 U. S . 629 , 633 (1953)

(alteration in the original)

In view of the discretionary nature of injunctions and the
variety of factors which are considered in the decision whether
to impose one , discussion of that topic in this case will be
left until the relevant evidence has been refined in the
crucible of trial and the verdict .

IV .

New York Attorney General Claims

Defendants argue the NY AG ' s claims are preempted by federal
law, or that defendants are protected by the safe harbor
provision under N. Y. Gen . Bus . Law§§ 349 and 350 , and the NY AG
is barred from seeking restitution .
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A. Preemption
Defendants argue the NY AG improperly seeks to impose a
higher substantiation requirement on Quincy than the analogous
federal law. SJ at 43 .

In making this argument , defendants rely

on 21 U.S.C. § 343 -l (a) (5) , which states "no State or political
subdivision of a State may directly or indirectly establish" any
labeling requirement "that is not identical to the requirement"
imposed by the FDCA .
But defendants misconstrue the nature of the NY AG's claims
in this case , which are focused on deceptive advertising , not
labeling requirements . See e . g ., Warren v . Whole Foods Mkt .
Grp ., Inc., 574 F. Supp . 3d 102 , 113 (E . D. N. Y. 2021 ) .

The

applicable federal law to be considered in this case is the FTC
In Jovel v . i-Health , Inc .,

Act , not the FDCA and the OSHEA .

the court found that a deceptive advertising claim based on a
product , which was "labeled as supporting brain development and
function , improving memory , supporting mental clarity and
protecting against normal cognitive decline" was not preempted
by federal law because although "those statements are part of
the products ' labeling and may touch on an area regulated by the
FDA , consumer protection claims founded on their falsity are not
preempted." 2013 WL 5437065 , at *5 (E . D. N.Y . Sept . 27 , 2013; See
e .g., Hughes v. Ester C Co ., 99 F . Supp . 3d 278 , 287
2015)

(E . D. N. Y.

("The FDCA is not focused on the truth or falsity of
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Case 1:17-cv-00124-LLS Document 331 Filed 12/19/22 Page 21 of 22

advertising claims , but is directed to protecting the public by
ensuring that drugs sold in the marketplace are safe , effective
and not misbranded ... " )

(internal citations omitted) . The NY

AG ' s c l aims are not preempted by the FDCA and the OSHEA .
B . N. Y. Gen . Bus . Law§§ 349 and 350 Safe Harbor
Defendants seek the protection of the Safe Harbor provision
in N. Y. Gen . Bus . Law§§ 349(d) and 350 , which provides , "[i]n
any such action i t shall be a complete defense that the act or
practice is , or if in interstate commerce would be , subject to
and complies with the rules and regulations of , and the statutes
administered by , the federal trade commission or any official
dep a rt ment , division , commission or agency of the United States
as such r ules , regulations or statutes are interpreted by the
f edera l trade commission or such department , division ,
commission or agency or the federal courts ."
The defendants '

argument and applicability of this " safe

harbor " provision rests on its assumption of compliance with
federal l aw .

There being a genuine issue of material fact

whether the defendants have complied with federal law , summary
judgment as to the NY AG ' s claims under the " safe harbor "
provision canno t be granted until it prevails at trial .
C . NY AG ' s Ability to Gain Restitution
Unde r the fundamen t al principle of res judicata , the NY AG
is prohibited from obtaining restitution on behalf of those
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Case 1:17-cv-00124-LLS Document 331 Filed 12/19/22 Page 22 of 22

class members who are covered by the Collins Settlement. See
Matter of People v . Applied Card Sys ., Inc ., 11 NY . 3d 105 , 124 25 (NY Ct . of App . 2008) . However, the NY AG may seek
restitution on behalf of those who are not covered by the
settlement .
So ordered .
Dated :

New York , New York
December 19 , 2022

LOUIS L . STANTON
U. S . D. J .

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