Three things to remember when making claims: always ensure that you have the appropriate substantiation—I forget the other two. Last week, the Second Circuit issued an order vacating the Southern District of New York’s dismissal of an FTC complaint alleging that Quincy Bioscience falsely advertised a memory supplement, known as Prevagen.

A little background: Quincy represented that Prevagen improved memory—and that studies proved as much. Advertising through multiple mediums, Quincy claimed Prevagen “improves memory” and “has been clinically shown to improve memory,” and that “a landmark double-blind and placebo controlled trial demonstrated Prevagen improved short-term memory, learning, and delayed recall over 90 days.” Quincy also represented that apoaequorin, a protein derived from jellyfish and an ingredient in Prevagen, “enters the human brain to supplement endogenous proteins that are lost during the natural process of aging.”

On January 9, 2017, the FTC and the New York Attorney General brought suit alleging that Quincy did not have the proper substantiation to make the claim that apoaequorin improves memory or that it enters the brain. Attached to the complaint was the study on which Quincy relied. Quincy moved to dismiss the complaint, arguing that the complaint failed to allege facts demonstrating that the representations at issue were false or unsubstantiated, and relying on the study to defend against the FTC’s claims.

There is a reason that attorneys are not known for their mastery of mathematics—we like to deal with words, and sometimes that preference can have a severely negative effect on the law. The District Court acknowledged that “no statistically significant results were observed for the study population as a whole on any of the cognitive tasks.” Quincy argued, however, that the study included some analysis of certain subgroups that had shown improvement. Notably, there was no qualification on any of Quincy’s advertisements disclosing the subgroups that had seen the most improvement, and, without going into a full statistical analysis, the FTC alleged that Quincy’s post hoc analyses of subgroups from the data greatly increased the probability that statistically significant improvements were by chance alone. The District Court disagreed and dismissed the complaint, stating, “All that is shown by the complaint is that there are possibilities that the study’s results do not support its conclusion.” Unsurprisingly, the FTC appealed, and a number of amicus briefs followed.

On appeal, the FTC argued that the District Court based its dismissal on findings that “Quincy prepared long after the study,” and that Quincy’s clinical trial “showed no statistically significant treatment effect.” Further, the FTC described the data that allegedly substantiated Quincy’s advertising claims as “cherry-picked findings” that rested on “scant results even though the results of the study were in fact overwhelmingly negative.”

The Second Circuit vacated the District Court’s dismissal. Ignoring the statistical oversight by the District Court, the Second Circuit ruled, “The FTC has stated a plausible claim that Quincy’s representations about Prevagen are contradicted by the results of Quincy’s clinical trial and are thus materially deceptive in violation of the FTC Act.” Taken as true, the FTC’s complaint undermined a number of Quincy’s representations. Notably, the Second Circuit reiterated that the clinical study of Prevagen “failed to show a statistically significant improvement in the treatment group over the placebo group on any of the nine computerized cognitive tasks.” This undermined representations that “the majority of people experience cognitive improvement” and that it is “clinically supported.” In addition, according to the complaint, Quincy’s apoaequorin claims that Prevagen would enter the brain were proved false by Quincy’s own safety studies, which “show that apoaequorin is rapidly digested in the stomach and broken down into amino acids and small peptides like any other dietary protein.”

A statistical study validating any claim can be compelling. The ability to represent that “clinical studies prove” a given statement can sometimes be so alluring that we ignore what the statistics actually show. It is always important that the results of a given study formulate a claim and not the other way around—especially given the FTC’s recent scrutiny of cognitive claims. For now, we will have to wait and see how the District Court deals with the statistics on remand.