The vision of blood-testing company Theranos would have been great for patients, doctors, and even drugstores: mini-labs right inside stores, with a whole suite of blood tests available in a small machine and results available from a few drops of blood. Only the company’s tests proved inaccurate, and Arizona, the state where its labs set up shop, is planning to sue the company.

The laws regulating direct-to-consumer health tests in Arizona made it an ideal launch site, and Theranos had its own labs in addition to spaces inside Walgreens stores. Now Arizona has posted a request for bids from outside law firms to help the state sue the company.

The Walgreens clinics closed last June, and the retailer is suing its former partner for $140 million over test results that have since been voided for inaccuracies. The drugstore chain alleges that this was a breach of contract. The companies had once planned a national network of blood-testing centers together.

Inaccurate tests were run both on Theranos’ own equipment for testing tiny amounts of blood, and on standard equipment for vials of blood purchased from outside vendors. Patients put their confidence in these tests, and inaccurate results led to false confidence, unnecessary freaking out, and even changes in medication prescribed by health care providers.

Theranos shed another 41% of its staff earlier this week, but continues to exist as a company, working toward its goal of producing and selling a mini-lab that runs tests on a tiny amount of blood. Since the company and its CEO faced sanctions by the federal government, it’s out of the blood testing business.

The company faces an investigation by the Securities and Exchange Commission, the class action by patients, and now a planned investigation by the state of Arizona.

[via Reuters]

Want more consumer news? Visit our parent organization, Consumer Reports, for the latest on scams, recalls, and other consumer issues.