Eli Lilly and Company v. Empower Clinic Services, LLC

IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF TEXAS
HOUSTON DIVISION
ELI LILLY AND COMPANY, §
§
Plaintiff, §
§
v. § CIVIL ACTION NO. H-25-3464
§
EMPOWER CLINIC SERVICES, LLC §
D/B/A EMPOWER PHARMACY, §
§
Defendant. §
MEMORANDUM OPINION AND ORDER
Plaintiff, Eli Lilly and Company (“Lilly” or “Plaintiff”),
brings this action against Defendant, Empower Clinic Services, LLC,
d/b/a Empower Pharmacy (“Empower” or “Defendant”), for false or
misleading advertising and promotion in violation of the Lanham
Act, 15 U.S.C. § 1125(a)(1)(B), and for related claims based on the
statutory or common law of the states of Alaska, Colorado,
Connecticut, Hawaii, North Carolina, South Carolina, Tennessee,
Texas, and Washington.1 Lilly seeks declaratory, injunctive, and
monetary relief.2 Pending before the court is Defendant Empower
Clinic Services, L.L.C. d/b/a Empower Pharmacy’s Motion to Invoke
Fed. R. Civ. P. 7 to Require a Reply (“Defendant’s Motion to
Require a Reply”) (Docket Entry No. 82). Plaintiff has responded
to Defendant’s motion by filing Plaintiff Eli Lilly and Company’s
Opposition to Defendant’s Motion to Invoke Fed. R. Civ. P. 7 to
1Complaint, Docket Entry No. 1, pp. 54-74 ¶¶ 161-290. Page
numbers for docket entries refer to the pagination inserted at the
top of the page by the court’s electronic filing system.
2Id. 75-78.
United States District Court
Southern District of Texas
ENTERED
July 30, 2026
Nathan Ochsner, Clerk
Case 4:25-cv-03464 Document 101 Filed 07/30/26 in TXSD Page 1 of 11

Require a Reply (“Plaintiff’s Opposition to Defendant’s Motion to
Require a Reply”) (Docket Entry No. 84). Defendant has replied by
filing Defendant Empower Clinic Services, L.L.C. d/b/a Empower
Pharmacy’s Reply in Support of Its Motion to Invoke Fed. R. Civ. P.
7 to Require a Reply (“Defendant’s Reply”) (Docket Entry No. 86).
For the reasons stated below, Defendant’s’ Motion to Require a
Reply will be denied.
I. Factual and Procedural Background3
The court incorporates herein the factual allegations
discussed in its prior Memorandum Opinion and Order (Docket Entry
No. 80), granting in part and denying in part Empower’s Motion to
Dismiss (Docket Entry No. 34), and denying as moot Empower’s Motion
to Stay (Docket Entry No. 46), and Empower’s Motion for Protective
Order (Docket Entry No. 73). In its Memorandum Opinion and Order
the court granted Empower’s motion to dismiss Lilly’s claims for
violation of the Lanham Act and the common law of Texas. The court
denied Empower’s motion to dismiss Lilly’s claims asserted under
the state laws of Alaska, Colorado, Connecticut, Hawaii, North
Carolina, South Carolina, Tennessee, and Washington as barred by
regulatory exemptions.4
3The facts in this section are alleged in the “General
Allegations” section of Lilly’s’s Complaint, Docket Entry No. 1,
pp. 9-54 ¶¶ 26-160.
4Docket Entry No. 80, pp. 34-48. See also Eli Lilly & Co. v.
Empower Clinic Services, LLC, No. H-25-3464, 2026 WL 1162765, at
*14-*19 (S.D. Tex. April 29, 2026).
-2-
Case 4:25-cv-03464 Document 101 Filed 07/30/26 in TXSD Page 2 of 11

Lilly is a pharmaceutical company responsible for developing,
testing, and gaining approval from the United States Food and Drug
Administration (“FDA”) for two medications containing the active
ingredient tirzepatide: MOUNJARO® and ZEPBOUND®. As the first to
gain FDA approval for tirzepatide-based medications, Lilly enjoys
a period of market exclusivity through at least May of 2027.
Empower is a licensed compounding pharmacy located in Houston,
Texas, that makes and sells two versions of tirzepatide
medications: Tirzepatide ODT taken orally, and injections
containing fixed-dose combinations of tirzepatide and niacinamide
(a form of vitamin B-3). Lilly alleges that, unlike its
tirzepatide medications, Empower’s compounded medications have not
been tested or approved by the FDA, and that Empower has a history
of regulatory violations. Lilly alleges that Empower’s marketing
and sale of its compounded tirzepatide medications is unfair,
deceptive, false, and misleading, and creates a significant risk to
patient safety and to the brand-image of tirzepatide-based
medications that Lilly spent billions of dollars to develop.
Asserting that Empower’s sales of compounded tirzepatide products
would have been made by Lilly but for Empower’s unlawful and unfair
competition, Lilly alleges that it has suffered financial harm in
the form of lost sales as a direct result of Empower’s unfair
competition. Lilly also alleges that Empower’s deceptive practices
have caused irreparable harm to its brand and customer goodwill by
promising results that consumers will not obtain from Empower’s
products.
-3-
Case 4:25-cv-03464 Document 101 Filed 07/30/26 in TXSD Page 3 of 11

On May 13, 2026, Empower answered Lilly’s Complaint by filing
Defendant Empower Clinic Services, L.L.C. d/b/a Empower Pharmacy’s
Response to Plaintiff Eli Lilly and Company’s Complaint (“Answer”)
(Docket Entry No. 81) asserting 37 affirmative defenses. In the
Answer Empower asserts inter alia that regulatory exemptions bar
the claims that Lilly has alleged under the state laws of Alaska,
Colorado, Connecticut, Hawaii, South Carolina, Tennessee, and
Washington, and that a Learned Professional Exemption bars claims
that Lilly has asserted under the state law of North Carolina. The
same day that Empower filed its Answer, it filed the pending Motion
to Require a Reply.
Citing Eli Lilly and Co. v. Revive Rx, LLC, 812 F. Supp.3d
708, 740 (S.D. Tex. 2025), for holding that if Revive filed an
answer asserting statutory exemptions provided by the laws of
Alaska and North Carolina, Lilly would need to file a reply
pursuant to Rule 7(a)(7) alleging facts sufficient to avoid those
exemptions, Empower moves the court to “order Lilly to address
Empower’s regulatory exemptions under the laws of Alaska, Colorado,
Connecticut, Hawaii, North Carolina, South Carolina, Tennessee, and
Washington [asserted in its Answer to Lilly’s Complaint].”5
Empower argues that a Rule 7(a)(7) reply would “identify claims
that are well pleaded but ultimately futile and should not entitle
Lilly to impose on Empower the burden of costly discovery.”6
5Defendant’s Motion to Require a Reply, Docket Entry No. 82,
p. 5.
6Id.
-4-
Case 4:25-cv-03464 Document 101 Filed 07/30/26 in TXSD Page 4 of 11

Lilly argues that Empower’s motion should be denied because
Empower does not and cannot identify any convincing
reason. It instead tries to relitigate issues it lost in
its motion to dismiss, and raise new arguments this Court
and the Fifth Circuit have already rejected and Empower
considered too weak for its dismissal motion. Those
arguments . . . do not justify a reply. The efficient
next step in this case is discovery into the contested
fact issues, not more pleadings.7
The court agrees.
II. Standard of Review
Federal Rule of Civil Procedure 7(a) states in pertinent part
“[o]nly these pleadings are allowed: (1) a complaint; (2) an answer
to a complaint; . . . (7) if the court orders one, a reply to an
answer.” Rule 7(a)(7) provides district courts discretion to order
a reply to an answer. See Reyes v. Sazan, 168 F.3d 158, 161
(reviewing denial of motion to file Rule 7 reply for abuse of
discretion).
A substantial reason must be given or necessity must be
demonstrated by the movant to justify the court ordering
a reply to an answer. This strict standard has proven
difficult to satisfy inasmuch as the federal rules
provide a number of other devices for uncovering the
facts and narrowing the issues that are more effective
than a court-ordered reply.
In re Enron Corporation Securities, Derivative & “ERISA”
Litigation, 540 F. Supp. 2d 759, 795 (S.D. Tex. 2007) (quoting
5 Charles Alan Wright and Arthur R. Miller, Federal Practice &
Procedure Civ. 3d § 1185 at 31–32 (West 2004)).
7Plaintiff’s Opposition to Defendant’s Motion to Require a
Reply, Docket Entry No. 84, p. 11.
-5-
Case 4:25-cv-03464 Document 101 Filed 07/30/26 in TXSD Page 5 of 11

In the Fifth Circuit Rule 7 replies have long been used in
cases against government officials entitled to qualified immunity.
See Schultea v. Wood, 47 F.3d 1427 (5th Cir. 1995) (en banc).
Schultea established the use of a Rule 7(a) reply to resolve the
inherent conflict between the Federal Rules’ notice pleading
procedures and the substantive right of qualified immunity, which
requires that a plaintiff allege with particularity those facts
necessary to overcome a qualified immunity defense:
When a public official pleads the affirmative defense of
qualified immunity in his answer, the district court may,
on the official’s motion or on its own, require the
plaintiff to reply to that defense in detail. By
definition, the reply must be tailored to the assertion
of qualified immunity and fairly engage its allegations.
Id. at 1433. By requiring a Rule 7(a) reply in such cases district
courts can be satisfied that the “plaintiff has adequately alleged
facts sufficient to pass the pleading stage.” Truvia v. Julien,
187 F. App’x 346, 349 (5th Cir. 2006) (per curiam).
The use of Rule 7(a)(7) replies was recently mentioned by the
Supreme Court as a means “to screen out meritless claims before
discovery” in “barebones . . . suits.” Cunningham v. Cornell
University, 145 S. Ct. 1020, 1032 (2025) (citing Crawford-El v.
Britton, 118 S. Ct. 1584, 1596 (1998), and Cole v. Carson, 935 F.3d
444, 446 (5th Cir. 2019)(en banc), cert denied sub nom, Hunter v.
Cole, 141 S. Ct. 111 (2020) (“[C]ourts have developed procedures
and pretrial practices, including . . . a reply to an answer under
Rule 7(a) on order of the district court, particularized to address
the defense of immunity.”)).
-6-
Case 4:25-cv-03464 Document 101 Filed 07/30/26 in TXSD Page 6 of 11

II. Analysis
Asserting that “[t]his Court previously declined to resolve
Empower’s regulatory-exemption arguments at the Rule 12(b)(6) stage
because the exemptions constituted affirmative defenses that
Empower was required to plead and prove,”8 Empower argues that it
has now pleaded those defenses. ECF No. 81. A Rule 7
Reply would require Lilly to address the statutory
exemptions and demonstrate that its claims are not
ultimately futile — thereby sharpening the issues for
summary judgment and preventing Lilly from imposing
unwarranted discovery burdens on Empower.9
Although Empower frames its motion as a request to “order Lilly to
address [its] regulatory exemptions under the laws of Alaska,
Colorado, Connecticut, Hawaii, North Carolina, South Carolina,
Tennessee, and Washington [asserted in its Answer to Lilly’s
Complaint],”10 Empower fails to identify any substantial reason or
necessity for the court to order a reply to the regulatory
exemption affirmative defenses asserted in its answer. Instead,
reasserting arguments made in its motion to dismiss, Empower argues
only that the reply will “identify claims that are well pleaded but
ultimately futile and should not entitle Lilly to impose on Empower
the burden of costly discovery.”11
8Defendant’s Motion to Require a Reply, Docket Entry No. 82,
p. 8.
9Id. at 8-9.
10Id. at 5.
11Id. See also Defendant’s Reply, Docket No. 86, p. 18
(arguing that “[a] Rule 7 reply will ‘sharpen[] the issues for
(continued...)
-7-
Case 4:25-cv-03464 Document 101 Filed 07/30/26 in TXSD Page 7 of 11

Empower’s main argument is that its “compounded medicines
dispensed pursuant to prescription fall outside the reach of
[state] new drug statutes.”12 But as the court recognized in its
April 29, 2026, Memorandum Opinion and Order, “Lilly alleges that
Empower is not engaged in compounding pharmaceuticals, . . . but
instead, that Empower is manufacturing and selling unapproved
pharmaceuticals.”13 Empower argues that “[even if Lilly had alleged
a violation of the state new drug statutes, it would not constitute
‘unfair competition.’”14 But the Fifth Circuit squarely rejected
this argument in Zyla Life Sciences, L.L.C. v. Wells Pharma of
Houston, L.L.C., 134 F.4th 326, 331 (5th Cir. 2025), by holding
that “[i]f anyone sells drugs in violation of [state ‘new drug’]
laws, competitors may bring suit under traditional state unfair-
competition law.” What Empower produces, how it dispenses its
products, and whether it is selling unapproved pharmaceuticals are
11(...continued)
summary judgment and prevent[] Lilly from imposing unwarranted
discovery burdens on Empower”).
12Defendant’s Motion to Require a Reply, Docket Entry No. 82,
p. 10. Compare Defendant Empower Clinic Services, L.L.C. D/B/A
Empower Pharmacy’s Motion to Dismiss for Failure to State a Claim
and Memorandum in Support (“Empower’s Motion to Dismiss”), Docket
Entry No. 34, pp. 41-45 (arguing that Lilly cannot state a claim
based on its “unapproved drug theory”).
13Docket Entry No. 80, p. 43. See also Eli Lilly, 2026 WL
1162765, at *17.
14Defendant’s Motion to Require a Reply, Docket Entry No. 82,
p. 11. Compare Empower’s Motion to Dismiss, Docket Entry No. 34,
p. 13 (arguing that “none of these . . . state laws allow a profit-
motivated drug manufacturer like Lilly to police patient access to
compounded drugs by contorting Empower’s legal conduct into unfair
competition and deceptive practices”).
-8-
Case 4:25-cv-03464 Document 101 Filed 07/30/26 in TXSD Page 8 of 11

disputed issues of fact that require discovery — not more pleadings
— to resolve.
Empower’s Answer alleges state regulatory exemptions as
affirmative defenses but instead of adding anything new to the
dispute, merely asserts that Empower is authorized under state laws
to compound and dispense medications, including tirzepatide
products, without obtaining new drug approval, and that its
compounding and dispensing activities are permissible activities
conducted in compliance with relevant state laws and regulations.15
Empower’s motion to dismiss contained the same or substantially the
same assertions,16 and Lilly’s opposition to Empower’s motion to
dismiss responded to those assertions in detail.17
Moreover, Lilly argues — and the courts agrees — that its
“Complaint already alleges Empower’s non-compliance with . . .
state regulatory exemptions in detail.”18 For example, Lilly
alleges that Empower does not obtain necessary prescriptions, fails
to follow pharmacy compounding standards, and uses impermissibly
substandard ingredients.19
15Answer, Docket Entry No. 81, pp. 47-50.
16See Docket Entry No. 34, pp. 42-46.
17See Plaintiff Eli Lilly and Company’s Opposition to
Defendant’s Motion to Dismiss for Failure to State a Claim, Docket
Entry No. 49, pp. 21-28 (arguing that Empower’s conduct is not
protected by state-law safe harbors).
18Plaintiff’s Opposition to Defendant’s Motion to Require a
Reply, Docket Entry No. 84, p. 17.
19Id. (citing Complaint, Docket Entry No. 1, p. 24 ¶ 81).
-9-
Case 4:25-cv-03464 Document 101 Filed 07/30/26 in TXSD Page 9 of 11

Because Empower’s previously filed — and resolved — motion to
dismiss made the same or substantially the same exemption arguments
as those made in both its Answer and the pending Motion to Require
a Reply, because Lilly’s response in opposition to Empower’s motion
to dismiss addressed Empower’s state law exemption arguments in
detail, and because Lilly’s Complaint contains factual allegations
detailing Empower’s non-compliance with state statutes and
regulations on which Empower bases its qualification to regulatory
exemptions, ordering Lilly to file a reply to Empower’s Answer is
not needed to satisfy the court that Lilly has adequately alleged
facts in support of claims sufficient to pass the pleading stage,
to screen out meritless claims before discovery, or to sharpen the
issues for summary judgment. In Cunningham, 145 S. Ct. at 1032,
the Court encouraged the use of a Rule 7(a)(7) reply to address
“barebones . . . suits.” Id. As Lilly argues, its “Complaint . .
. is far from ‘barebones.’”20 And as demonstrated by the court’s
April 29, 2026, Memorandum Opinion and Order, resolving Empower’s
motion to dismiss, the issues surrounding Empower’s assertions of
affirmative defenses based on statutory exemptions have already
been sharpened for purposes of summary judgment.21 See Truvia, 187
F. App’x at 349-50 (affirming denial of Rule 7 reply where defense
20Id. at 16.
21See Docket Entry No. 80, pp. 34-48. See also Eli Lilly,
2026 WL 1162765, at *14-*19.
-10-
Case 4:25-cv-03464 Document 101 Filed 07/30/26 in TXSD Page 10 of 11

was raised in prior 12 (b) (6) motion). See also Wilson v, Barcella,
No. H-05-cv-3646, 2007 WL 963977, at *11 (S.D. Tex. March 29,
2007), aff'd, 284 F. App'x 210 (5th Cir. 2008) ("When the briefing
in response to motions to dismiss . . adequately addresses [the]
issues, a district court need not require a Rule 7 response.").
III. Conclusions and Order
Because Empower has failed to identify a "substantial reason"
or "necessity . . . to justify the court ordering a reply to [its]
answer," Enron, 540 F. Supp. 2d at 795, and instead reasserts
arguments made in its Motion to Dismiss, Defendant Empower Clinic
Services, L.L.C. d/b/a Empower Pharmacy's Motion to Invoke Fed. R.
Civ. P. 7 to Require a Reply, Docket Entry No. 82, is DENIED.
SIGNED at Houston, Texas, this 30th day of July, 2026.
SIM LAKE
SENIOR UNITED STATES DISTRICT JUDGE
-11-
Case 4:25-cv-03464 Document 101 Filed 07/30/26 in TXSD Page 11 of 11