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 Lilly alleges that this court has subject matter
jurisdiction under 28 U.S.C. § 1331 based on the Lanham Act cause
of action, and also under 28 U.S.C. § 1332 based on diversity
because the matter in controversy exceeds the value of $75,000 and
is between citizens of different states. Lilly also alleges that
the court has supplemental jurisdiction over the state law causes
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
April 29, 2026
Nathan Ochsner, Clerk
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of action under 28 U.S.C. § 1367(a) because they belong to the same
case or controversy as the Lanham Act cause of action.3
Pending before the court is 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 (“Defendant’s Motion to
Dismiss”) (Docket Entry No. 34), Defendant Empower Clinic Services,
L.L.C. d/b/a Empower Pharmacy’s Motion to Stay Discovery
(“Defendant’s Motion to Stay Discovery”)(Docket Entry No. 46), and
Defendant Empower Clinic Services, L.L.C. d/b/a Empower Pharmacy’s
Motion for Protective Order (“Defendant’s Motion for Protective
Order”) (Docket Entry No. 73). Plaintiff has responded to
Defendant’s motions by filing Plaintiff Eli Lilly and Company’s
Opposition to Defendant’s Motion to Dismiss for Failure to State a
Claim (“Plaintiff’s Opposition to Defendant’s Motion to Dismiss”)
(Docket Entry No. 49), and Plaintiff Eli Lilly and Company’s
Opposition to Empower Pharmacy’s Motion to Stay Discovery
(“Plaintiff’s Opposition to Defendant’s Motion to Stay”) (Docket
Entry No. 47). 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 Stay Discovery (“Defendant’s Reply in Support of
Motion to Stay”) (Docket Entry No. 51), and Defendant Empower
Clinic Services, L.L.C. d/b/a Empower Pharmacy’s Reply in Support
of Its Motion to Dismiss for Failure to State a Claim and
3Id. at 8 ¶ 22. See also Disclosure of Interested Parties,
Docket Entry No. 32 (disclosing that Lilly is an Indiana
corporation, and Empower is a limited liability company with two
members, one of whom is a citizen of Texas, and the other is a
citizen of New York).
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Memorandum in Support (“Defendant’s Reply in Support of Motion to
Dismiss”) (Docket Entry No. 53). For the reasons stated below,
Defendant’s’ Motion to Dismiss will be granted as to the Lanham Act
claim and the claim asserted under Texas common law, and otherwise
denied. Defendant’s Motion to Stay and Motion for Protective Order
will be denied as moot.
I. Factual Allegations4
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®. Tirzepatide is a
micromolecule discovered by Lilly that targets the patient’s GLP-1
and GIP receptors to improve blood sugar control and reduce
appetite. The FDA approved MOUNJARO® to treat type 2 diabetes, and
ZEPBOUND® to treat chronic weight management and obstructive sleep
apnea in certain adults. MOUNJARO® and ZEPBOUND® have been tested
and FDA-approved only as single-ingredient medications for sub-
cutaneous (i.e., under the skin) injection. Because Lilly was the
first to gain FDA approval for tirzepatide-based medications, Lilly
enjoys a period of market exclusivity through at least May of 2027.
4Unless otherwise noted, the 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, and restated in Plaintiff’s
Opposition to Defendant’s Motion to Dismiss, Docket Entry No. 49,
pp. 14-18.
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Empower is a licensed compounding pharmacy located in Houston,
Texas, authorized to ship drugs across the country to every state
except California. Empower makes and sells two versions of
tirzepatide medications: Tirzepatide ODT, dissolving tablets 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 in clinical trials or approved by
the FDA, and that Empower has a history of regulatory violations,
including failure to comply with sanitation and sterility
requirements by use of non-pharmaceutical grade components.
Lilly alleges that Empower’s marketing and sale of its
untested and unapproved 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. Lilly
alleges three main issues with Empower’s advertisements of its
tirzepatide-based products. First, Lilly alleges that Empower
unfairly and deceptively markets and sells its tirzepatide
medications (1) as safe and effective treatments for both type 2
diabetes and weight management, despite the fact that they have
never been studied clinically; (2) as custom-made, “personalized”
medications, despite the fact that Tirzepatide ODT is manufactured
in three standardized strengths, and tirzepatide in combination
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with niacinamide is manufactured in two standardized strengths,
none of which are altered for individual patients, and (3) as
manufactured in adherence “to stringent regulatory standards,”
despite the fact that federal and state regulators, and whistle
blowers, have observed deficiencies in Empower’s safety practices.
Lilly alleges that Empower’s unfair and deceptive practices have
caused harm by luring patients away from Lilly’s safe and effective
FDA-approved medications in favor of Empower’s untested and
unapproved drugs, and that if left unchecked these harms will
continue. 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.
II. Standard of Review
Citing Federal Rule of Civil Procedure 12(b)(6), Empower seeks
dismissal of all causes of action asserted in Lilly’s Complaint.
A Rule 12(b)(6) motion tests the formal sufficiency of the
plaintiff’s pleadings and is “appropriate when a defendant attacks
the complaint because it fails to state a legally cognizable
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claim.” Ramming v. United States, 281 F.3d 158, 161 (5th Cir.
2001), cert. denied sub nom. Cloud v. United States, 122 S. Ct.
2665 (2002). To defeat a motion to dismiss pursuant to Rule
12(b)(6), a plaintiff must plead “enough facts to state a claim to
relief that is plausible on its face.” Bell Atlantic Corp. v.
Twombly, 127 S. Ct. 1955, 1974 (2007). “A claim has facial
plausibility when the plaintiff pleads factual content that allows
the court to draw the reasonable inference that the defendant is
liable for the misconduct alleged.” Ashcroft v. Iqbal, 129 S. Ct.
1937, 1949 (2009) (citing Twombly, 127 S. Ct. at 1965). Labels,
conclusions, and “a formulaic recitation of the elements of a cause
of action will not do.” Twombly, 127 S. Ct. at 1974.
When considering a motion to dismiss, the court must accept
the factual allegations of the complaint as true, view them in a
light most favorable to the plaintiff, and draw all reasonable
inferences in the plaintiff’s favor. Id. The court “must consider
the complaint in its entirety, as well as other sources courts
ordinarily examine when ruling on Rule 12(b)(6) motions to dismiss,
in particular, documents incorporated into the complaint by
reference, and matters of which a court may take judicial notice.”
Funk v. Stryker Corp., 631 F.3d 777, 783 (5th Cir. 2011) (quoting
Tellabs, Inc. v. Makor Issues & Rights, Ltd., 127 S. Ct. 2499, 2509
(2007)). “A judicially noticed fact must be one not subject to
reasonable dispute in that it is either (1) generally known within
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the territorial jurisdiction of the trial court or (2) capable of
accurate and ready determination by resort to sources whose
accuracy cannot reasonably be questioned.” Id. (citing Fed. R.
Evid. 201(b)). In Funk the Fifth Circuit held that “the district
court took appropriate judicial notice of publicly-available
documents and transcripts produced by the FDA, which were matters
of public record directly related to the issue at hand.” Id.
III. Empower’s Motion to Dismiss
Lilly alleges that it “files this action to stop Empower from
engaging in false and deceptive sales and practices and selling its
knockoff, unapproved tirzepatide drugs in violation of state and
federal law.”5 Asserting that Lilly’s Complaint is a thinly veiled
attempt to eliminate compounding with tirzepatide, Empower argues
that Lilly’s claims are all subject to dismissal under Federal Rule
of Civil Procedure 12(b)(6) for failure to state a claim for which
relief may be granted.6 Lilly responds that Empower’s attacks on
the sufficiency of the Complaint all fail.7
5Complaint, Docket Entry No. 1, p. 3 ¶ 7.
6Defendant’s Motion to Dismiss, Docket Entry No. 34, p. 12.
7Plaintiff’s Opposition to Defendant’s Motion to Dismiss,
Docket Entry No. 49, p. 14.
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A. Lilly’s Lanham Act Claims
Lilly’s only federal law claim is an unfair competition claim
against Empower for false or misleading advertising under § 43(a)
of the Lanham Act, 15 U.S.C. § 1125(a). Lilly alleges that
283. Empower’s commercial advertising claims described
herein are false and misleading in violation of
Section 43(a)(1)(B) of the Lanham Act, 15 U.S.C.
§ 1125(a)(1)(B). Empower deceptively promotes its
tirzepatide products as “safe” and “effective”
based on Lilly studies, deceptively promotes its
tirzepatide products as “personalized” when they
are mass-manufactured, and falsely advertises that
it complies with regulations, despite the fact that
regulatory authorities have concluded otherwise on
multiple occasions.
284. Empower has made materially false statements to
sell its Tirzepatide ODT and its tirzepatide/
niacinamide injection. These statements have
influenced and are likely to continue to influence
consumers’ purchasing decisions — specifically,
decisions to purchase Empower’s Tirzepatide ODT and
tirzepatide/niacinamide products instead of Lilly’s
FDA-approved medicines. Empower is steering
patients with serious diseases like diabetes and
obesity away from obtaining safe, effective,
available, and FDA-approved treatments. Empower’s
unlawful conduct is putting health, safety, and
lives at risk.
285. Empower’s advertisements and business practices
actually deceive or have the tendency to deceive
consumers.
286. Empower has caused its false statements to enter
interstate trade or commerce.
287. As a direct and proximate result of Empower’s false
and deceptive campaign, Lilly is suffering
immediate and continuing irreparable injury for
which there is no adequate remedy at law.
288. As a direct and proximate result of Empower’s false
and deceptive campaign, Lilly has suffered and will
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continue to suffer significant monetary damages and
discernible competitive injury by loss of goodwill.8
Empower argues that this claim fails because Lilly has not
plead facts capable of establishing statutory standing or most
elements of a false advertising claim.9 Lilly responds that it has
alleged facts capable of establishing a Lanham Act claim.10
1. Applicable Law
In pertinent part, § 43(a) of the Lanham Act states that
[a]ny person who, on or in connection with any goods or
services, or any container for goods, uses in commerce
any word, term, name, symbol, or device, or any
combination thereof, or any false designation of origin,
false or misleading description of fact, or false or
misleading representation of fact, which—
. . .
(B) in commercial advertising or promotion, misrepresents
the nature, characteristics, qualities, or geographic
origin of his or her or another person’s goods, services,
or commercial activities, shall be liable in a civil
action by any person who believes that he or she is or is
likely to be damaged by such act.
15 U.S.C. § 1125(a)(1)(B). This section creates liability for
“false advertising, § 1125(a)(1)(B).” Lexmark International, Inc.
v. Static Control Components, Inc., 134 S. Ct. 1377, 1384 (2014).
8Plaintiff’s Complaint, Docket Entry No. 1, pp. 73-74 ¶¶ 283-
88.
9Defendant’s Motion to Dismiss, Docket Entry No. 34, p. 23.
See also Defendant’s Reply in Support of Motion to Dismiss, Docket
Entry No. 53, pp. 20-31.
10Plaintiff’s Opposition to Defendant’s Motion to Dismiss,
Docket Entry No. 49, pp. 14, and 30-51.
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In Lexmark the Supreme Court addressed the issue of statutory
standing under the Lanham Act. Observing that this section of the
Lanham Act is meant to protect businesses from “injuries to
business reputation and present and future sales,” id. at 1390, the
Court articulated a two-step inquiry for determining whether a
plaintiff has a right to sue under the Lanham Act. The first step
asks whether the plaintiff comes within “the zone of interest”
implicated by the statute. The Court held that “to come within the
zone of interests in a suit for false advertising under § 1125(a),
a plaintiff must allege an injury to a commercial interest in
reputation or sales.” Id. The second step asks whether the
plaintiff’s injuries are proximately caused by defendant’s alleged
violation of the statute. Id. at 1390–91. The Court held that to
establish proximate cause, a plaintiff “must show economic or
reputational injury flowing directly from the deception wrought by
the defendant’s advertising; and that occurs when deception of
consumers causes them to withhold trade from the plaintiff.” Id.
at 1391. Thus the Court concluded that to have statutory standing
to invoke the Lanham Act’s cause of action for false advertising “a
plaintiff must plead (and ultimately prove) an injury to a
commercial interest in sales or business reputation proximately
caused by the defendant’s misrepresentations.” Id. at 1395.
To succeed on a claim of false advertising under the Lanham
Act,
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a plaintiff must show: (1) A false or misleading
statement of fact about a product; (2) [s]uch statement
either deceived or had the capacity to deceive a
substantial segment of potential consumers; (3) [t]he
deception was material, in that it is likely to influence
the consumer’s purchasing decision; (4) [t]he product is
in interstate commerce; and (5) [t]he plaintiff has been
or is likely to be injured as a result of the statement
at issue.
Molzan v. Bellagreen Holdings, L.L.C., 112 F.4th 323, 334 (5th Cir.
2024) (quoting IQ Products Co. v. Pennzoil Products Co., 305 F.3d
368, 375 (5th Cir. 2002), cert. denied, 123 S. Ct. 1632 (2003)).
See also Pizza Hut, Inc. v. Papa John’s International, Inc., 227
F.3d 489, 495 (5th Cir. 2000), cert. denied, 121 S. Ct. 1355
(2001)(articulating the same elements for a Lanham Act claim).
2. Application of the Law to the Alleged Facts
Empower argues that Lilly’s Lanham Act claim should be
dismissed for lack of statutory standing because “Lilly [d]oes
[n]ot [p]lead [f]acts [d]emonstrating Empower’s [a]dvertisements
[c]aused Lilly [h]arm.”11
Citing ¶¶ 159 and 160 of its Complaint, Lilly responds that it
alleges injuries that fall within the zone of interests
protected by the Lanham Act — specifically, lost sales
and damage to its brand and customer good will. . . Lilly
alleges that these injuries are proximately caused by
Empower’s false advertisements, which lure patients away
from Lilly’s FDA-approved tirzepatide medicines in favor
of Empower’s untested, unapproved products.12
11Defendant’s Motion to Dismiss, Docket Entry No. 34, p. 23.
12Plaintiff’s Opposition to Defendant’s Motion to Dismiss,
Docket Entry No. 49, p. 31.
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In pertinent part these paragraphs allege:
. . . Empower’s unlawful, false and deceptive sales
and practices lure consumers away from obtaining safe and
effective treatment with MOUNJARO® and ZEPBOUND® on the
false promises that (i) untested and unapproved Empower
oral disintegrating tablets and tirzepatide/niacinamide
injections are safe and effective in treating diabetes
and addressing chronic weight management, (ii) Empower’s
untested and unapproved compounded tirzepatide/
niacinamide injections and tirzepatide oral
disintegrating tablets fit patients’ unique needs, when,
in truth, Empower is marketing and selling the same
tirzepatide/niacinamide injections and tirzepatide oral
disintegrating tablets to every consumer, and/or
(iii) Empower is in compliance with regulatory
requirements.
. . . Empower’s false and deceptive practices cause
irreparable harm to Lilly’s brand and consumer goodwill
by promising results that consumers will not obtain from
Empower’s products. Empower promotes its Tirzepatide ODT
and tirzepatide/niacinamide injections by trading on the
credibility of Lilly and its FDA-approved MOUNJARO® and
ZEPBOUND® — earned through decades of safe and effective
pharmaceutical manufacturing and years of clinical
research and testing on tirzepatide specifically —
including by specifically citing studies of Lilly’s
medicines as support for its untested and unapproved
knockoffs. When consumers fail to achieve desired
results from Empower’s Tirzepatide ODT and combination
injection, consumers are likely to conclude that
tirzepatide is ineffective in general — an outcome made
more likely given Empower’s reliance on Lilly’s clinical
studies. Worse still, consumers are likely to be harmed
using compounded tirzepatide products from a pharmacy
like Empower that has a long record of safety lapses, and
when they are, consumers are likely to draw unwarranted
conclusions about the safety and effectiveness of Lilly’s
FDA-approved tirzepatide medicines.13
Citing Lexmark, 134 S. Ct. 1393, Lilly argues that these
allegations constitute
13Complaint, Docket Entry No. 1, pp. 53-54 ¶¶ 159-60.
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a “classic Lanham Act false-advertising claim” “in which
one competitor directly injures another by making false
statements about his own goods . . . inducing customers
to switch.” . . . That is exactly what Lilly has alleged:
Empower’s tirzepatide-based drugs directly compete with
Lilly’s tirzepatide-based medicines, luring Lilly’s
customers away. See Compl. ¶¶ 92, 112, 159, 209, 235,
248, 264.14
Citing Colorado Biolabs, Inc. v. Three Arrows Nutra, LLC,
No. 3:25-CV-0601-D, 2025 WL 2524313, at *15 (N.D. Tex. September 2,
2025), Lilly argues that its allegations are “sufficient to show
Lanham Act standing under Fifth Circuit law.”15 In the cited
section of Colorado Biolabs the court held the defendant’s
allegations sufficient to establish statutory standing to assert a
Lanham Act counterclaim after quoting the following passage from
Lujan v. Defenders of Wildlife, 112 S. Ct. 2130, 2137
(1992)(quoting Lujan v. National Wildlife Federation, 110 S. Ct.
3177, 3189 (1990)): “At the pleading stage, general factual
allegations of injury resulting from the defendant’s conduct may
suffice, for on a motion to dismiss we ‘presum[e] that general
allegations embrace those specific facts that are necessary to
support the claim.’” Colorado Biolabs, 2025 WL 2524313, at *14.
Lilly’s reliance on Colorado Biolabs is misplaced for at least
two reasons. First, the authorities on which the Colorado Biolabs
court relied address the standard for establishing Constitutional
14Plaintiff’s Opposition to Defendant’s Motion to Dismiss,
Docket Entry No. 49, p. 31.
15Id.
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standing under Article III, not statutory standing under the Lanham
Act, which is more demanding. See Lexmark, 134 S. Ct. at 1388
(“[r]ead literally . . . [the Lanham Act’s] broad language might
suggest that an action is available to anyone who can satisfy the
minimum requirements of Article III . . . [H]owever . . . the
unlikelihood that Congress meant to allow all factually injured
plaintiffs to recover persuades us that [§ 1125(a)] should not get
such an expansive reading”). Second, the authorities on which the
Colorado Biolabs court relied predate the “plausibility” pleading
standard established by the Supreme Court in Twombly, 127 S. Ct. at
1974, and Iqbal, 129 S. Ct. at 1949.
Lilly does not argue that its allegations of harm satisfy the
standards for pleading statutory standing to assert Lanham Act
claims set forth in Lexmark, Twombly and Iqbal. Instead, citing
¶¶ 158 and 175 of the Complaint Lilly merely argues that it
“alleges direct harm to Lilly.”16 Paragraph 158 of the Complaint
alleges that “[s]ome sales made by Empower of its compounded
tirzepatide products would have been made by Lilly but for
Empower’s unlawful and unfair competition, and Lilly has suffered
financial harm as a direct result.”17 Paragraph 175 of the
Complaint alleges that
16Id. at 32.
17Complaint, Docket Entry No. 1, p. 53 ¶ 158.
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[a]s a direct result and proximate result of Empower’s
unlawful, unfair, and deceptive business practices, Lilly
has suffered and will continue to suffer monetary damages
and discernible competitive injury by the loss of
goodwill associated with Lilly’s MOUNJARO® and ZEPBOUND®
tirzepatide medicines.18
Lilly argues that “these allegations directly link Empower’s
conduct to Lilly’s loss of sales and goodwill, adequately pleading
a direct causation theory.”19 While these allegations sufficiently
allege injury to a commercial interest in reputation or sales
needed to satisfy the zone of interest requirement for establishing
statutory standing under the Lanham Act, they are not sufficient to
satisfy the proximate cause requirement.
To allege proximate cause under the Lanham Act, a plaintiff
“ordinarily must show economic or reputational injury flowing
directly from the deception wrought by the defendant’s advertising;
and that occurs when deception of consumers causes them to withhold
trade from the plaintiff.” Lexmark, 134 S. Ct. at 1391. Lilly
premises its injury from Empower’s conduct on lost sales and
reputational harm, but Lilly’s Complaint fails to allege facts that
plausibly support an inference that Lilly has lost sales or
suffered irreparable harm to its brand or goodwill traceable to
Empower’s allegedly false advertising. Absent such allegations of
fact there is no statutory standing under the Lanham Act.
18Id. at 56 ¶ 175.
19Plaintiff’s Opposition to Defendant’s Motion to Dismiss,
Docket Entry No. 49, p. 32.
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(a) Reputational Injury
Lilly alleges that Empower’s false and deceptive practices
irreparably harm its brand and consumer goodwill by promising
results that consumers will not obtain from Empower’s products, and
that Empower’s products are likely to harm consumers because
“Empower . . . has a long record of safety lapses.”20 Lilly alleges
that “[w]hen consumers fail to achieve desired results” or are
harmed from Empower’s products, they “are likely to draw
unwarranted conclusions about the safety and effectiveness of
Lilly’s FDA-approved tirzepatide medicines.”21 But Lilly fails to
allege facts supporting an inference that Empower’s compounded
medications harm consumers or fail to meet consumer expectations.
The only mention of a consumer complaining about Empower’s
tirzepatide medicines is found in ¶ 105 of Plaintiff’s Complaint
where Lilly asserts that “Empower’s false claims have actually
deceived the marketplace. . . Consumers . . . have been deceived,
and they have voiced complaints about ineffective Empower
tirzepatide products.”22 Footnote 70 at the end of that paragraph
cites to a tiktok video posted by an Empower customer,23 but fails
to allege the contents of the video, fails to link the contents of
20Complaint, Docket Entry No. 1, p. 54 ¶ 160.
21Id.
22Id. at 33 ¶ 105.
23Id. n. 70.
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the video to Empower’s allegedly false advertisements, and fails to
allege facts raising an inference that the allegedly false
advertisements caused the video’s creator to attribute any negative
experience with Empower’s tirzepatide medicines to Lilly.
Moreover, Lilly does not allege that its name is on any of
Empower’s products or mentioned in any of Empower’s allegedly false
advertisements. Lilly’s allegations do not support a plausible
inference that Empower’s compounded tirzepatide medications are not
safe and effective, that consumers taking them do not achieve
desired results, or that Empower’s customers are likely to draw
unwarranted conclusions about the safety and effectiveness of
Lilly’s tirzepatide medications. The court concludes that Lilly’s
allegations of fact do not raise a plausible inference that Lilly
suffered any reputational injury to its brand or goodwill
proximately caused by Empower’s allegedly false advertising.
(b) Lost Sales
Lilly alleges that Empower’s false and deceptive practices
irreparably harm Lilly by luring consumers away from obtaining safe
and effective treatment with Lilly’s MOUNJARO® and ZEPBOUND®. To
satisfy the proximate cause requirement based on lost sales, Lilly
must allege facts supporting an inference that Empower’s allegedly
false advertising caused customers to withhold trade from Lilly.
Id. In Lexmark the Court held that proximate causation for lost
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sales may be adequately alleged when “there is likely to be
something very close to a 1:1 relationship between” a plaintiff’s
lost sales and the sales diverted to a defendant. Id. at 1394.
The allegations in Lilly’s Complaint do not show a 1:1 relationship
— or anything approaching it — between Empower’s sales of
tirzepatide medications and Lilly’s lost sales. Instead, Lilly
merely alleges that “[s]ome sales made by Empower of its compounded
tirzepatide products would have been made by Lilly but for
Empower’s unlawful and unfair competition.”24 Lilly also alleges
that Empower’s “false and deceptive sales and practices lure
consumers away from obtaining safe and effective treatment with
MOUNJARO® and ZEPBOUND.®”25 Theses allegations are not enough to
avoid dismissal.
For example, in Austin’s Natural Frozen Pops, Inc. v.
JonnyPops, LLC, No. 1:24-CV-716-RP, 2025 WL 888560 (W.D. Tex. March
13, 2025), a case cited by Lilly, the plaintiff alleged that “where
retailers have limited space to stock either [plaintiff’s product]
or [defendant’s product] in their better-for-you section, retailers
have chosen [defendant’s product] due to its deceptive sales
presentations, because [defendant’s product] is not truly a better-
for-you product,” and that “when [defendant’s product] began
selling next to [plaintiff’s product] as a better-for-you product
24Id. at 53 ¶ 158.
25Id. ¶ 159.
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in one health grocer, [plaintiff’s] sales velocity declined by
about 25%.” Id. at *4. The court relied on these factual
allegations to find that the plaintiff had sufficiently pled
defendant’s advertising caused plaintiff to lose sales. Id.
Lilly alleges that Empower’s false advertisements cause Lilly
to lose sales and lure patients away from Lilly’s tirzepatide
medicines to Empower’s products. But Lilly’s Complaint does not
allege facts linking Empower’s advertisements to consumers who have
been lured away — or switched — from Lilly’s tirzepatide medicines
to Empower’s products. Thus, even if as Lilly alleges, Empower’s
advertisements were false and misleading, Lilly has failed to
allege facts raising a plausible inference that Empower’s allegedly
false advertisements cause Lilly to lose sales or cause consumers
to withhold trade from Lilly. See Eli Lilly and Co. v. Willow
Health Services, Inc., No. 2:25-cv-03570-AB-MAR, 2026 WL 639976, *8
(C.D. Calif. February 3, 2026)(dismissing Lanham Act claim for lack
of statutory standing because “proximate causation fails absent
allegations showing a direct link between advertising and lost
sales”). See also United States ex rel. University Loft Co. v.
Avteq, Inc., No. SA-14-CA-528-OLG, 2015 WL 13548950, at *9 (W.D.
Tex. December 22, 2015) (dismissing Lanham Act claim for lack of
statutory standing because “plaintiff had not pleaded that
defendants’ alleged false advertising was the proximate cause of
plaintiff failing to win bids”), report and recommendation adopted,
2016 WL 9461763 (W.D. Tex. January 8, 2016).
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(c) Conclusions as to Lilly’s Lanham Act Claim
Because Lilly alleges injury to a commercial interest in
reputation and sales, Lilly’s allegations are sufficient to satisfy
the zone of interest requirement for statutory standing to pursue
a Lanham Act claim against Empower. See Lexmark, 134 S. Ct. at
1390. But because Lilly’s Complaint fails to allege facts that
plausibly support an inference that Lilly has lost sales or
suffered irreparable harm to its brand or consumer goodwill
traceable to Empower’s allegedly false advertising, Lilly has
failed to plead facts sufficient to satisfy the proximate cause
requirement for statutory standing to pursue a Lanham Act claim
against Empower. See id. at 1391. Because plaintiffs asserting
Lanham Act claims must allege facts capable of proving that they
have been or are likely to be injured as a result of the
advertisements at issue, Molzan, 112 F.4th at 334, and because
Lilly has failed to allege facts capable of proving that Empower’s
allegedly false and deceptive advertisements caused Lilly to lose
sales or harmed Lilly’s brand or consumer goodwill, the court also
concludes that Lilly has failed to state a Lanham Act claim for
which relief may be granted. Therefore, Empower’s Motion to
Dismiss Lilly’s Lanham Act claims will be granted.
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B. Lilly’s State Law Claims
Lilly asserts state law claims for unfair competition and
false advertising under the common law of Texas, and state statutes
of Alaska, Colorado, Connecticut, Hawaii, North Carolina, South
Carolina, Tennessee, and Washington. Empower argues that Lilly
cannot establish its state law claims because they are all
preempted by federal law, because Lilly cannot use common law to
enforce the Texas Food, Drug, and Cosmetic Act, and because the
states’ unfair competition laws exempt drug compounding.26
Asserting that Empower violates state unfair competition laws by
selling unapproved compounded tirzepatide medications, Lilly
responds that the Fifth Circuit has rejected Empower’s preemption
argument, Empower’s conduct is actionable under Texas law, and
Empower’s conduct is not protected by state-law safe harbors.27
1. Lilly’s State Law Claims Are Not Preempted by Federal Law
Asserting that “Lilly’s state law claims each improperly seek
to enforce [§] 503A of the [Food, Drug, and Cosmetic Act]
(“FDCA”),”28 21 U.S.C. § 353a, and citing Buckman Co. v. Plaintiffs’
26Defendant’s Motion to Dismiss, Docket Entry No. 34, pp. 41-
51. See also Defendant’s Reply in Support of Motion to Dismiss,
Docket Entry No. 53, pp. 8-20.
27Plaintiff’s Opposition to Defendant’s Motion to Dismiss,
Docket Entry No. 49, pp. 19-30.
28Defendant’s Motion to Dismiss, Docket Entry No. 34, pp. 49-
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Legal Committee, 121 S. Ct. 1012 (2001), Empower argues that
Lilly’s state law claims should all be dismissed because they are
all impliedly preempted by the FDCA’s prohibition against non-
federal enforcement of its drug-related provisions, i.e., 21 U.S.C.
§ 337(a).29 Empower argues that
Lilly attempts to circumvent FDCA’s private enforcement
prohibition by cloaking its federal claims under state
laws that require “new drugs” to undergo federal approval
prior to sale. See e.g., Compl. ¶¶ 168, 180, 194, 207,
219, 231, 244, 259, and 272. Lilly alleges that Empower
violates these state laws by selling compounded
medications into these states. Id. Lilly, therefore
seeks to avoid implied preemption by relying on parallel
state laws that mirror and incorporate federal new drug
approval requirements. But, by Lilly’s own admission,
the above state laws are only relevant if Empower’s
compounded medications do not comply with [§] 503A, which
would thereby make Empower’s compounded medications
“unapproved drugs.” See Compl. ¶ 80 (asserting that
Empower cannot invoke [§] 503A as a defense because
Empower allegedly violates [§] 503A’s requirements).
What Lilly is actually seeking to do is to enforce
[§] 503A of the FDCA. . .
[Because] Lilly’s state law claims are entirely
dependent upon proving noncompliance with [§] 503A;
Lilly’s state law claims cannot be proven in [§] 503A’s
absence. This is precisely what [§] 337(a) forbids.
Further, Lilly has not cited (nor could it) any parallel
state law basis for its true claims (violation of
[§] 503A) because none of these states have incorporated
parallel versions of [§] 503A into their state law.
Thus, the issue is not that Lilly is enforcing state laws
that have made federal laws their own . . ., but that
these states have not made the federal law that Lilly is
actually enforcing their own. . . The Fifth Circuit’s
recent Zyla[Life Sciences, L.L.C. v. Wells Pharma of
28(...continued)
50.
29Id. at 49-51.
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Houston, L.L.C., 134 F.4th 326 (5th Cir. 2025)], opinion
is therefore inapposite. No matter how Lilly packages
its claim, it “is effectively suing for a violation of
the FDCA . . . and the claim is thus impliedly preempted
under Buckman. . . . Therefore, Lilly’s state law claims
fail.30
Citing Zyla, 134 F.4th at 330-31 and 338, Lilly responds that
the Fifth Circuit has rejected Empower’s preemption argument.31
Asserting “Zyla held that there is ‘no preemption’ of state-law
claims that ‘make federal law their own,’” and “Empower relies on
Buckman . . . which Zyla distinguished,”32 Lilly argues that
[t]o avoid Zyla, Empower claims that Lilly is not
enforcing “new drug approval requirements” at all. . .
Since those laws are “only relevant if Empower’s
compounded medications do not comply with [§] 503A,”
Empower claims Lilly is “actually seeking to . . .
enforce [§] 503A” of the FDCA and so its claim is
preempted. . . Zyla rejected that argument, too. The
defendant in that case also argued that it “did not need
to obtain approval if it satisfied” federal compounding
regulations. 134 F.4th at 331 n.2. But in the Fifth
Circuit’s words, “[t]hat is a big if.” Id. The Court
explained that “to establish this theory of preemption,”
the defendant must “have proven that it satisfies
[federal law’s] many requirements.” Id. Since it had
“only moved to dismiss under 12(b)(6),” it “cannot have”
made that showing. Id.33
30Id. at 50-51. See also Defendant’s Reply in Support of
Motion to Dismiss, Docket Entry No. 53, pp. 7-12 (reasserting the
same argument).
31Plaintiff’s Opposition to Defendant’s Motion to Dismiss,
Docket Entry No. 49, pp. 19-21.
32Id. at 20 (citing Zyla, 134 F.3d at 332).
33Id. at 20-21.
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(a) Applicable Law
Congress enacted the FDCA to “promote the public health,” 21
U.S.C. § 393(b)(1), by among other things, ensuring that “human .
. . drugs are safe and effective.” 21 U.S.C. § 393(b)(2)(B).
Provisions of the FDCA relevant to the allegations in this action
include the prohibition against introducing new drugs into
interstate commerce without approval of the FDA, 21 U.S.C.
§ 355(a), and the allowance of drug compounding performed by
licensed pharmacists, physicians, and outsourcing facilities under
the direct supervision of a licensed pharmacist, 21 U.S.C. §§ 353a-
353b.34 Congress gave the FDA the sole authority to police
violations of the FDCA and foreclosed any private right of action
by requiring that “all . . . proceedings for the enforcement, or to
restrain violations” of the FDCA “shall be by and in the name of
the United States.” 21 U.S.C. § 337(a). Citizens may petition the
FDA to take administrative action, 21 C.F.R. §§ 10.25(a), 10.30,
but may not privately enforce the FDCA. See POM Wonderful LLC v.
Coca-Cola Co., 134 S. Ct. 2228, 2235 (2014) (“Private parties may
not bring enforcement suits [for FDCA violations].”).
States across the country have adopted their own food-and-drug
laws that often mirror the FDCA. See Zyla, 134 F.4th at 330. As
34Title 21 §§ 353a and 353b are often referred to as §§ 503A
and 503B, respectively, as drawn from the FDA Modernization Act of
1997, Pub. L. No. 105-115 (1997). These sections articulate
conditions drug compounders must meet.
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relevant here, Alaska, Colorado, Connecticut, Hawaii, North
Carolina, South Carolina, Tennessee, Texas, and Washington have
incorporated federal new-drug approval requirements into their own
regulatory regimes. See Alaska Stat. Ann. § 17.20.110(a)(1)-(2);
Colo. Rev. Stat. § 12-280-131(1); Conn. Gen. Stat. Ann. § 21a-
110(a); Hawaii Rev. Stat. §§ 328-17(a)(1)-(2); N.C. Gen. Stat.
§ 106-135(a)(1)-(2); S.C. Code § 39-23-70(a); Tenn. Code Ann. § 53-
1-110(a); Tex. Health & Safety Code § 431.114(a); Wash. Rev. Code
§ 69.04.570.
Although the FDCA contains express preemption provisions
covering food, 21 U.S.C. § 343-1; medical devices, 21 U.S.C.
§ 360k, non-prescription drugs, 21 U.S.C. § 379r, and cosmetics, 21
U.S.C. § 379s, there is no express preemption provision covering
prescription drugs. See Wyeth v. Levine, 129 S. Ct. 1187, 1196,
1200 (2009). The issue is thus whether Lilly’s state law claims
are impliedly preempted by the FDCA’s exclusive enforcement
provision, 21 U.S.C. § 337(a). The leading case on implied
preemption under the FDCA is Buckman, 121 S. Ct. at 1012. The
Supreme Court held that the FDCA impliedly preempts state law
claims premised on FDCA violations. See Zyla, 134 F.4th at 337
(citing Buckman, 121 S. Ct. at 1017). The Buckman preemption
analysis depends on whether plaintiffs “sought to wield state law
to vindicate a wrong committed against the Federal Government.”
See Zyla, 134 F.4th at 337 (emphasis in the original). If so, the
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claim is impliedly preempted because it inevitably conflicts with
the federal government’s exclusive enforcement authority over the
FDCA’s regulatory scheme. However, Zyla held that if a claim
relies on an independent state law duty, then it is not preempted
under Buckman. Id. at 338 (citing Wyeth, 129 S. Ct. at 1200, for
“permitting distinct state regulation under the FDCA”).
(b) Application of the Law to the Alleged Facts
Empower’s argument that Lilly’s state law claims are preempted
is premised on the contention that Lilly’s claims are not based on
violations of state laws that parallel the FDCA but, instead, on
violations of § 503A of the FDCA, 21 U.S.C. § 353a, which imposes
conditions on compounders not found in the state statutes.35 This
argument is not persuasive because it mischaracterizes Lilly’s
state law claims, which are all based on allegations that Empower
engages in unfair methods of competition by selling unapproved
drugs, including its Tirzepatide ODT and tirzepatide/niacinamide
injections, in each of the named states in violation of state laws
that proscribe the sale of unapproved new drugs.36 None of Lilly’s
35Defendant’s Motion to Dismiss, Docket Entry No. 34, pp. 49-
51.
36See Complaint, Docket Entry No. 1, pp. 55 ¶ 168 (citing
Alaska Stat. Ann. §§ 17.20.110(a)(1)-(2), proscribing sale of
unapproved new drugs), 57 ¶ 180 (citing Colo. Rev. Stat. § 12-280-
131(1), prohibiting sale of “any new drug not authorized to move in
interstate commerce under appropriate federal law”), 59 ¶ 194
(continued...)
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state law claims allege violation of conditions imposed on
compounders by § 503A, i.e., 21 U.S.C. § 353a.
Section 503A is cited in four paragraphs of Lilly’s Complaint,
but none of those four paragraphs contain allegations of illegal
conduct. Three of the four paragraphs merely present background
information about the FDCA and reasons for the addition § 503A.37
The fourth paragraph is ¶ 80, where Lilly alleges that
Empower cannot defend its conduct by claiming that its
sale of unapproved compounded tirzepatide is authorized
by [§] 503A of the FDCA. Section 503A allows true
compounders to compound and sell prescription drugs under
narrowly confined conditions. Empower routinely and
regularly does not comply with several of those
conditions.38
Asserting that ¶ 80 of Lilly’s Complaint admits that the state
laws on which Lilly bases is unfair competition and deceptive
practice claims are only relevant if Empower’s compounded
medications do not comply with § 503A, Empower argues that Lilly’s
state law claims are preempted because they are dependent upon
36(...continued)
(citing Conn. Gen. State. Ann. §§ 21a-110(a)-(b), governing the
sale of new drugs), 61 ¶ 207 (citing Haw. Rev. Stat. §§ 328-
17(a)(1)-(2), requiring approvals to sell new drugs), 63 ¶ 219
(citing N.C. Gen. Stat. Ann. § 106-135, prohibiting sale of
unapproved drugs), 65 ¶ 231 (citing S.C. Code Ann. § 39-23-70,
requiring approval to sell new drug products), 67 ¶ 244 (citing
Tenn. Code Ann. § 53-1-110, requiring approval to sell new drugs),
70 ¶ 259 (citing Tex. Health & Safety Code Ann. § 431.114(a),
requiring approval to sell new drugs), and 72 ¶ 272 (citing Wash.
Rev. Code Ann. § 69.04.570, requiring approval to sell new drugs).
37Id. at 17 ¶ 58, 18 ¶ 60, 19 ¶ 62.
38Id. at 24 ¶ 80.
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proving noncompliance with § 503A. The court disagrees. Paragraph
80’s assertion that “Empower cannot defend its conduct by claiming
that its sale of unapproved tirzepatide is authorized by [§] 503A,”
merely anticipates that Empower may advance as an affirmative
defense that it does not need approval to sell tirzepatide
medicines in the named states if it satisfies the FDCA’s conditions
for compounding pharmacists. But as the Fifth Circuit said in
response to a similar argument made by the defendant in Zyla,
“[t]hat’s a big if” that cannot be shown on a Rule 12(b)(6) motion
because the court cannot draw factual inferences in the defendant’s
favor. 134 F.4th 331 at n.2. The court concludes, therefore, that
Lilly’s state law claims are not impliedly preempted by the FDCA’s
prohibition against non-federal enforcement of the its prescription
drug-related provisions.
2. Lilly’s Texas Common Law Claim Will be Dismissed
Lilly asserts a claim in violation of Texas common law by
alleging:
263. Empower has engaged in unfair competitive acts or
practices by advertising, promoting, selling and
offering for sale in Texas its unapproved new drugs
in violation of the Texas Food, Drug, & Cosmetic
Act, Tex. Health & Safety Code Ann. § 431.114(a).
264. In doing so, Empower lures consumers away from
obtaining safe and effective treatment, such as
Lilly’s FDA-approved tirzepatide medicines, thereby
interfering with Lilly’s ability to conduct
business.
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265. Empower’s unlawful and unfair conduct puts health,
safety, and lives at risk, harming Lilly by
creating a risk that customers will draw
unwarranted conclusions about the safety and
effectiveness of Lilly’s FDA-approved tirzepatide
medicines.
266. As a direct and proximate result of its unlawful
and unfair business practices, Empower has obtained
an unfair and illegal business advantage,
benefitting and profiting from sales made as a
result of goodwill associated with Lilly’s
MOUNJARO® and ZEPBOUND® tirzepatide medicines.
Lilly has suffered and will continue to suffer
monetary damages that can be measured and
quantified as well as discernible competitive
injury by the loss of goodwill.
267. Empower’s unfair conduct is interfering with
Lilly’s ability to conduct its business. As a
direct and proximate result of Empower’s unfair
business practices, Lilly is suffering immediate
and continuing, competitive, irreparable injury for
which no adequate remedy at law exists.39
Empower argues that Lilly’s claims based on Texas common law
should be dismissed because Lilly cannot use common law to create
a private cause of action under the Texas Food, Drug, and Cosmetic
Act (“TFDCA”), Texas Health & Safety Code § 431.114(a), which bans
the sale of unapproved new drugs.40 Lilly responds that Empower’s
alleged conduct is actionable under Texas law because it has
alleged that Empower is selling unapproved new drugs in Texas, and
that “illegal act . . . interfered with [Lilly’s] ability to
conduct its business.”41
39Complaint, Docket Entry No. 1, pp. 70-71 ¶¶ 263-67.
40Defendant’s Motion to Dismiss, Docket Entry No. 34, pp. 46-
49. Empower also argues that these claims should be dismissed
because they are preempted by § 337(a) of the FDCA, 21 U.S.C.
§ 337(a). But for the reasons stated above in § III.B.1, the court
has already rejected that argument.
41Plaintiff’s Opposition to Defendant’s Motion to Dismiss,
(continued...)
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(a) Applicable Law
“Unfair competition under Texas law ‘is the umbrella for all
statutory and nonstatutory causes of action arising out of business
conduct which is contrary to honest practice in industrial or
commercial matters.’” Taylor Publication Co. v. Jostens, Inc., 216
F.3d 465, 486 (5th Cir. 2000) (quoting American Heritage Life
Insurance Co. v. Heritage Life Insurance Co., 494 F.2d 3, 14 (5th
Cir. 1974)). To state an unfair competition claim under Texas law,
plaintiffs must allege (1) an illegal act by the defendant;
(2) that interfered with the plaintiff’s ability to conduct its
business. Id. “Although the illegal act need not necessarily
violate criminal law, it must at least be an independent tort.”
Id. Thus, under Texas law, a claim for unfair competition is not
an independent tort and must be based on the defendant’s breach of
some independently recognized legal duty. Id. (citing Schoellkopf
v. Pledger, 778 S.W.2d 897, 904-05 (Tex. App. — Dallas 1989, writ
denied) (“Without some finding of an independent substantive tort
or other illegal conduct, we hold that liability cannot be premised
on the tort of ‘unfair competition.’”)).
41(...continued)
Docket Entry No. 49, p. 28.
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(b) Application of the Law to the Alleged Facts
To establish the first element of its unfair competition claim
under Texas law Lilly alleges that “Empower has engaged in an
illegal act by selling unapproved new drugs in Texas in violation
of . . . the [TFDCA], Tex. Health and Safety Code § 431.114(a).”42
That statute prohibits the sale of new drugs unless they are
otherwise approved by federal or state law:
(a) A person shall not sell, deliver, offer for sale,
hold for sale or give away any new drug unless:
(1) an application with respect thereto has been
approved and the approval has not been withdrawn
under Section 505 of the federal Act; (2) a copy of
the letter of approval or approvability issued by
the United States Food and Drug Administration is
on file with the department if the product is
manufactured in this state.
. . .
(c) This section shall not apply: (1) to any drug that
is not a new drug as defined by the federal Act;
(2) to any drug that is licensed under the Public
Health Service Act (42 U.S.C. 201 et seq.); or
(3) to any drug approved by the department by the
authority of any prior law.
Tex. Health & Safety Code § 431.114(a), (c).
In Eli Lilly and Co. v. Revive RX, LLC, 812 F. Supp. 3d 708,
723-29 (S.D. Tex. 2025), Lilly asserted an almost identical claim
for unfair competition based on violation of the TFDCA, Tex. Health
and Safety Code § 431.114. The Revive defendant sought dismissal
under Rule 12(b)(6), and following an in depth analysis of the
42Id. (citing Complaint, Docket Entry No. 1, p. 70 ¶¶ 259,
263).
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TFDCA, the statute’s enforcement scheme, and relevant case law, the
court concluded that Texas courts likely would not allow a tort
claim based on violations of the TFDCA. Reasoning that “[t]he
Texas FDCA is a comprehensive regulatory scheme, enforced by
various officials from the local to the state level,” id. at 726,
that the statute “supplies an exhaustive list of thirty-seven
prohibited categories of activity,” id., that “[m]any of those
prohibited activities . . . provide specified exceptions to the
prohibition,” id. at 726-27, and that the statute “provides a
sliding scale of remedies for violations. . . including criminal
prosecutions, . . . administrative and civil monetary penalties[,]
. . . and . . . injunctions,” id. at 727, the court concluded that
“the structure of the Texas FDCA’s enforcement scheme forecloses
private enforcement through common-law unfair-competition torts.”
Id. The court reasoned that its conclusion was bolstered by the
purpose behind the TFDCA, the availability of other protections for
the harms Lilly sought to redress, and comparison of unfair
competition law in Texas and other states.
Observing that “[t]he Texas legislature enacted the FDCA to
protect patients from unsafe and ineffective drugs,” id. at 728,
the court reasoned that “Eli Lilly does not belong to the class of
persons the statute was designed to protect and did not suffer the
type of injury the statute was designed to prevent.” Id.
Observing that Lilly alleged sales of tirzepatide products made by
the defendant would have been made by Lilly but for the defendant’s
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unlawful and unfair competition, and that the poor quality of the
defendant’s tirzepatide products harmed its goodwill because
“consumers are likely to conclude that tirzepatide is ineffective
in general,” id. at 729, the court reasoned that “Texas law already
includes the tort of misappropriation, which prevents competitors
from using a product that the plaintiff developed through extensive
time, labor, skill, and money.” Id. at 728. The court also
reasoned that the tort of misappropriation “impos[es] liability on
defendants who use ‘a trade name similar to that of the plaintiff
on products that are markedly inferior or of a different quality
and nature than those of the plaintiff.’” Id. at 729. Because the
Texas tort of misappropriation “generally fit the allegations in
Eli Lilly’s complaint,” the court concluded that “there is little
reason to expand tort liability through the Texas FDCA.” Id.
Observing that “[o]nly ‘consumers,’ not competitors . . . may
enforce Texas’ Deceptive Trade Practices Act, Tex. Bus. Com. Code
§ 17.50(a),” id., and that “other states’ unfair competition laws
include far broader protections, allowing ‘a person’ or ‘any
person’ to file suit,” id., the court reasoned that Lilly was
relying on a novel common-law claim precisely because Texas does
not have a comparably broad unfair competition statute. Id.
Because the claims that Lilly has asserted against Empower
under the common law of Texas in this action are virtually
identical to those that Lilly asserted against the defendant in
Revive, and because the court finds the observations, reasoning,
and conclusions reached by the Revive court persuasive, the court
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concludes the unfair competition claims that Lilly has asserted
against Empower under the common law of Texas are subject to
dismissal because Texas courts likely would not allow Lilly to
pursue such claims based on violation of the Texas FDCA. Thus the
court will dismiss Lilly’s claims against Empower for violation of
Texas common law for failure to state a claim for which relief may
be granted.
3. Lilly’s State Law Claims Are Not Barred by Exemptions to
the State Laws at Issue
Empower argues that Lilly cannot state claims for unfair
competition and deceptive practices based on its unapproved drug
theory under the laws of Alaska, Connecticut, Colorado, Hawaii,
North Carolina, South Carolina, Tennessee, or Washington because
under both state and federal law, compounded medications
are not required to undergo federal drug approval.
Therefore, Empower’s conduct falls under state exemptions
permitting state-sanctioned activity, excluding Empower’s
conduct from liability under deceptive practices and
unfair competition acts in these states. . . Thus Lilly’s
Unapproved Drug Theory fails.43
Citing Zyla, 134 F.4th at 331 n. 2, Lilly responds that Empower’s
argument fails because under the state laws at issue this argument
is recognized as an affirmative defenses that cannot be established
on a motion to dismiss.44
43Defendant’s Motion to Dismiss, Docket Entry No. 34, p. 41-42.
See also Defendant’s Reply in Support of Motion to Dismiss, Docket
Entry No. 53, pp. 12-13.
44Plaintiff’s Opposition to Defendant’s Motion to Dismiss,
Docket Entry No. 49, p. 21.
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(a) Alaska
Lilly alleges that
[i]n the course of trade and commerce in Alaska, Empower
engages in unfair methods of competition and unfair
practices in violation of Alaska Stat. Ann.
§ 45.50.471(a). Empower does so by unlawfully selling
unapproved drugs in Alaska, including its Tirzepatide ODT
and tirzepatide/niacinamide injections, in violation of
Alaska Stat. Ann. §§ 17.20.110(a)(1)-(2), which
proscribes the sale of unapproved new drugs.45
Lilly also alleges that “Empower’s tirzepatide tablets and
injections are new drugs within the meaning of Alaska Stat. Ann.
§ 17.20.370[(14)] because they are not generally recognized among
experts as safe for use under the conditions prescribed,
recommended, or suggested in their labeling.”46
Empower argues that Lilly fails to state a claim under
Alaska’s Unfair Trade Practices and Consumer Protection Act
(“UTPA”), Alaska Stat. Ann. §§ 45.50.471 et seq., because its
“supposed ‘unlawful sale of unapproved¶ drugs’ falls squarely
within [a] . . . statutory exemption[].”47 Empower argues that
[t]he relevant statute provides that UTPA does not apply
to “an act or transaction regulated by a statute or
regulation administered by the state, including a state
regulatory board or commission, unless the statute or
regulation does not prohibit the practices declared
unlawful in AS 45.50.471.” Alaska Stat. Ann.
§ 45.50.481(a)(1).48
45Complaint, Docket Entry No. 1, p. 55 ¶ 168.
46Id. ¶ 169. See also id. at 54-56 ¶¶ 161-77.
47Defendant’s Motion to Dismiss, Docket Entry No. 34, p. 44.
48Id.
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In pertinent part Alaska Statute § 45.50.481(a)(1) states that
[n]othing in AS 45.50.471-45.50.561 applies to . . . an
act or transaction regulated by a statute or regulation
administered by the state, including a state regulatory
board or commission, unless the statute or regulation
does not prohibit the practices declared unlawful in AS
45.50.471.
Quoting Adkins v. Collens, 444 P.3d 187, 195 (Alaska 2019), cert.
denied, 140 S. Ct. 2508 (2020), Empower argues that this exemption
applies to Lilly’s claim for violation of Alaska law because
Lilly alleges that “Empower failed to file[] any
application seeking approval for its tirzepatide tablets
or injections with any regulator,” Compl. ¶ 164, and “no
regulator has ever approved [Empower’s drugs] for sale.”
Compl. ¶ 165. According to Lilly, this conduct violates
Alaska Stat. Ann. §§ 17.20.110(a)(1)-(2) (Compl. ¶ 168),
a part of Alaska’s comprehensive Food, Drug, and Cosmetic
Act. Alaska Stat. Ann. § 17.20.005. Lilly’s Complaint,
therefore, concedes that the sale of “new drugs” is
subject to a “separate and distinct statutory scheme.” .
. . As Lilly admits, this separate and distinct statutory
scheme prohibits the exact conduct relied upon for the
UTPA claim: the sale of “unapproved drugs.” . . . Thus,
Lilly’s UTPA claim fails because Empower’s conduct falls
within the relevant statute’s exemption.49
Lilly responds that Alaska’s exemption “does not apply to
conduct that is defined as per se unfair or deceptive under
Alaska’s UTPA. See Alaska Stat. §§ 45.50.471(b)[(48)],
45.50.481(c).”50 Lilly argues that “Empower’s conduct is per se
unfair and deceptive,”51 because it violates prohibitions against
49Id. at 44-45. See also Defendant’s Reply in Support of
Motion to Dismiss, Docket Entry No. 53, pp. 15-16.
50Plaintiff’s Opposition to Defendant’s Motion to Dismiss,
Docket Entry No. 49, p. 25.
51Id.
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“causing a likelihood of confusion or misunderstanding as to the .
. . approval of . . . goods,” Alaska Stat. § 45.50.471(b)(3),
“representing that goods . . . have . . . approval . . . that they
do not have,” Alaska Stat. § 45.50.471(b)(4), and “representing
that goods are of a particular standard, quality, or grade . . . if
they are of another,” Alaska Stat. § 45.50.471(b)(6).52 Lilly also
responds that Empower is unable to prove that the exemption applies
because proof “requires factual evidence not cognizable at this
stage.”53 Citing White v. NYLIFE Securities, LLC, 551 F.Supp.3d
974, 983 (D. Alaska 2021), Lilly argues Empower “must prove that
the [regulatory] scheme is enforced in an ongoing, careful way,”
but that “Empower submits no evidence about ‘state enforcement.’”54
Empower replies that Lilly cannot rely on per se violations of
Alaska law because “Lilly’s Opposition does not cite to a single
place in its Complaint where it sets forth these supposed per se
violations — because Lilly did not plead a per se claim,”55 and
because “Lilly has not pled a single factual allegation to support
violations of the[ prohibitions]” that Lilly contends constitute
per se violations.56 Citing inter alia White, 551 F.Supp.3d at 974,
Empower asserts that
52Id. at 25-26.
53Id. at 26.
54Id.
55Defendant’s Reply in Support of Motion to Dismiss, Docket
Entry No. 53, p. 15.
56Id. n. 4.
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numerous Alaska courts evaluate the applicability of the
exemption at the Rule 12(b)(6) stage, and none have
categorically held that the exemption cannot be so
established. . . [T]he pertinent question is whether the
exemption is evident from the face of the Complaint.
Here, it is. Lilly’s basis to allege Empower’s
compounded medications violate UTPCA is Empower’s alleged
failures to “conduct preclinical trials,” to file “any
application seeking approval,” and to demonstrate its
medications are “safe and effective.” ECF 1 ¶¶ 162-165.
Lilly claims these failures violate Alaska Stat.
§ 17.20.110(a), which requires an application for the
“new drug” to be effective under the federal act. But as
Lilly extensively pleaded, new drug approval is highly
regulated (ECF 1 ¶¶ 26-38), demonstrating that the
specific conduct complained of is subject “to ongoing,
careful regulation.” Adkins v. Collens, 444 P.3d 187,
195 (Alaska 2019). And as Lilly has also pleaded,
Empower’s alleged failure to obtain new drug approval for
its compounded medications violates Alaska Stat.
§ 17.20.110(a). Lilly pleaded itself into the exemption
and dismissal is warranted.57
The Alaska FDCA prohibits “sell[ing], deliver[ing], offer[ing]
for sale, hold[ing] for sale, or giv[ing] away a new drug” without
meeting the approval requirements in the statute, Alaska Stat. Ann.
§ 17.20.110(a), and incorporates federal new-drug approval
requirements. Alaska Stat. Ann. § 17.20.110(a)(1)-(2). Thus, to
sell a new drug in Alaska — the specific prohibition at issue —
Empower must obtain permission from a state or federal regulator.
See Matanuska Maid, Inc. v. State, 620 P.2d 182, 186 (Alaska 1980)
(citing State v. Reader’s Digest Association, Inc., 501 P.2d 290,
303 (Alaska 1972)). Alaska’s exemption facially applies to
Empower’s alleged illegal conduct. Nevertheless, in the case that
57Id. at 16.
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both parties cite, i.e., White, the court doubted that the
exemption should apply if the regulatory scheme is “seldom used by
the state or individual plaintiffs to seek redress in factually
similar . . . cases,” 551 F.Supp.3d at 983, and concluded “that
mere citation to a broad regulatory scheme is insufficient to
support dismissal of a UTPA claim.” Id. at 985. Since, moreover,
exemption is an affirmative defense that Empower must plead and
prove, the court concludes that Lilly’s claims under Alaska law
survive dismissal. If, however, Empower asserts Alaska Stat. Ann.
§ 45.50.481(a)(1) as an affirmative defense in its answer, and if
Lilly seeks to avoid the statutory exemption by asserting per se
violations of Alaska’s UTPA, then Lilly would be required to prove
that the violations alleged in its Complaint are, in fact, per se
violations of Alaska’s FDCA. See Revive, 812 F.Supp.3d at 740.
(b) North Carolina
Lilly alleges:
Empower engages in unfair methods of competition in or
affecting commerce, and unfair practices in or affecting
commerce, when it unlawfully sells unapproved and
potentially dangerous drugs in North Carolina, including
its Tirzepatide ODT and tirzepatide/niacinamide
injections, in violation of the North Carolina Food,
Drug, and Cosmetic Act. See N.C. Gen. Stat. Ann. §§ 106-
135.58
58Complaint, Docket Entry No. 1, p. 63 ¶ 219.
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Lilly also alleges that “Empower’s tirzepatide tablets and
injections are unapproved new drugs within the meaning of N.C. Gen.
Stat. Ann. § 106-121 because they are not generally recognized
among experts as safe for use under the conditions prescribed,
recommended, or suggested in their labeling.”59
Empower argues that Lilly fails to state a claim under the
North Carolina Unfair and Deceptive Trade Practices Act
(“NCUDTPA”), N.C. Gen. Stat. Ann. § 75-1.1(a) because
“professional services rendered by a member of a learned
profession,” such as pharmacy services, are exempt from
[NC]UDTP[A] liability. Specifically, [NC]UDTP[A]
provides that “[u]nfair methods of competition in or
affecting commerce, and unfair or deceptive acts or
practices in or affecting commerce, are declared
unlawful.” N.C. Gen. Stat. Ann. § 75-1.1(a). However,
[NC]UDTP[A] defines “commerce” to exclude “professional
services rendered by a member of a learned profession.’
N.C. Gen. Stat. Ann. § 75-1.1(b).”60
Citing Sykes v. Health Network Solutions, Inc., 828 S.E.2d 467,
472-73 (N.C. 2019), Empower argues that “[t]his is known as the
‘learned profession’ exemption.”61 Citing Church Ekklasia Sozo Inc.
v. CVS Health Corp., No. 3:20-cv-382-RJC-DSC, 2022 WL 1572732, at
*14 (W.D.N.C. Feb. 25, 2022), Empower argues that “North Carolina
courts broadly apply the ‘learned profession [exemption]’ to
medical professionals . . . including pharmacists.”62
59Id. ¶ 220.
60Defendant’s Motion to Dismiss, Docket Entry No. 34, p. 45.
61Id.
62Id. at 45-46. See also Defendant’s Reply in Support of
(continued...)
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Lilly responds that Empower’s motion to dismiss the unfair
competition claim asserted under North Carolina law should be
denied because although “Empower claims it engages in the learned
profession of ‘pharmacy services,’” Lilly alleges that
“Empower is not ‘compounding’ tirzepatide,” Comp. ¶ 8
(emphasis added), but “instead is mass-manufacturing its
untested tirzepatide products at a commercial scale.”
id. ¶¶ 8, 19, 75-76 (using automated, commercial-scale
equipment to produce 70,000 drugs per week). The conduct
in question is drug manufacturing, not drug compounding,
and drug manufacturing is not exempt from the NCUDTPA.63
Quoting Sykes, 828 S.E.2d at 473, Lilly argues that
[e]ven if Empower could ignore Lilly’s well-pleaded
allegations that it is not acting as a pharmacy, “the
mere status of a defendant as a member of a ‘learned
profession’ does not shield that defendant from any claim
under [the NCUDTPA] regardless of how far removed the
claim is from that defendant’s professional practice.”64
In pertinent part the NCUDTPA states:
(a) Unfair methods of competition in or affecting
commerce, and unfair or deceptive acts or practices
in or affecting commerce, are declared unlawful.
(b) For purposes of this section, “commerce” includes
all business activities, however denominated, but
does not include professional services rendered by
a member of a learned profession.
. . .
(d) Any party claiming to be exempt from the provisions
of this section shall have the burden of proof with
respect to such claim.
62(...continued)
Motion to Dismiss, Docket Entry No. 53, pp. 16-18.
63Plaintiff’s Opposition to Defendant’s Motion to Dismiss,
Docket Entry No. 49, p. 27.
64Id.
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N.C. Gen. Stat. Ann. § 75-1.1. Courts in North Carolina conduct a
two-part inquiry to determine whether the “learned profession”
exemption applies: “First, the person or entity performing the
alleged act must be a member of a learned profession. Second, the
conduct in question must be a rendering of professional services.”
Sykes, 828 S.E.2d at 472 (quoting Wheless v. Maria Parham Medical
Center, Inc., 768 S.E.2d 119, 123 (N.C. 2014)). The Supreme Court
of North Carolina has held that members of health care professions
fall within the learned profession exemption to § 75-1.1, and that
“[t]his exception for medical professionals has been broadly
interpreted.” Sykes, 828 S.E.2d at 472 (citing Shelton v. Duke
University Health System, Inc., 633 S.E.2d 113, 117 (N.C. App.
2006), rev. denied, 643 S.E.2d 590 (N.C. 2007)). But “the mere
status of a defendant as a member of a ‘learned profession’ does
not shield that defendant from any claim under N.C.G.S. § 75-1.1.”
Id. at 473. At issue is whether the activity alleged constitutes
rendering of profession services under the statute. In cases like
this that involve medical professions, the North Carolina Supreme
Court has said that the issue is whether “the heart of th[e] action
is directly related to providing patient care.” Id.
Empower argues that it engages in the learned profession of
“pharmacy services” because it holds pharmacy licenses and
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compounds tirzepatide products.65 But Lilly alleges that “Empower
is not ‘compounding’ tirzepatide,” and “instead is mass-
manufacturing . . . tirzepatide products at commercial scale
without seeking, or obtaining, approval from FDA or any state
agency.”66 Lilly alleges that Empower engages in unfair methods
of competition in violation of North Carolina law by selling
unapproved and potentially dangerous drugs in North Carolina,67
engaging in deceptive trade practices “by marketing and selling its
Tirzepatide ODT and tirzepatide/niacinamide injections to treat
weight issues while misciting inapplicable clinical trials and
materially omitting that no data exists to support its use for any
purpose,”68 and falsely stating that its tirzepatide products are
“personalized formulations . . . tailored to fit individual
patients.”69 In other words Lilly alleges that Empower is not
engaged in compounding pharmaceuticals, a practice of the learned
profession of pharmacy, see N.C.G.S.A. § 90-85.3A, but instead,
that Empower is manufacturing and selling unapproved
pharmaceuticals, which are not practices of a learned profession.
65Defendant’s Motion to Dismiss, Docket Entry No. 34, p. 46.
66Complaint, Docket Entry No. 1, p. 3 ¶ 8. See also id. at 7
¶ 19, and 22-23 ¶¶ 75-76.
67Id. at 63 ¶ 219.
68Id. ¶ 221.
69Id. at 64 ¶ 222.
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Because the basis for Lilly’s NCUDTPA claim is that Empower is
manufacturing unapproved pharmaceuticals, and using false and
deceptive statements to market and sell its unapproved
pharmaceuticals in North Carolina, the court concludes that the
conduct at the heart of this action is not sufficiently related to
the provision of patient care to fall within the exemption afforded
to the “learned profession” of pharmacy. The “learned profession”
exemption does not entitled Empower to dismissal of the claims that
Lilly has asserted under North Carolina law.
(c) Colorado, Connecticut, Hawaii, South Carolina,
Tennessee, and Washington
Empower argues that Lilly’s unfair competition and deceptive
practice claims for violation of the laws of Colorado, Connecticut,
Hawaii, South Carolina, Tennessee, and Washington should all be
dismissed because “conduct that is permitted by regulatory agencies
cannot form the basis of an unfair competition or deceptive
practice claim.”70 Asserting that “[n]ot one of these states
requires compounded medications to undergo new drug approval prior
to sale,”71 Empower argues that
70Defendant’s Motion to Dismiss, Docket Entry No. 34, p. 42.
71Id. at 43 (citing Conn. Gen. Stat. § 20-633b (setting forth
the licensing requirements for pharmacies dispensing sterile
compounded medications); 3 Colo. Code Regs. 719-1:21.00.20(b)
(authorizing nonresident prescription drug outlets registered in
Colorado to dispense compounded medications); Haw. Rev. Stat.
(continued...)
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[a]s demonstrated by these state . . . regulatory
schemes, Empower’s compounded medication[s] are not
required to undergo new drug approval prior to sale. In
fact, the specific conduct upon which Lilly predicates
Empower’s violations of the Acts — shipment of compounded
drugs without new drug approval — is expressly permitted
by these statutes and regulations. As a result of its
state licenses, Empower is authorized to sell compounded
medications and is not required to obtain new drug
approval prior to doing so, exempting Empower from
liability under the state statutes under which Lilly
sues.72
Lilly responds that the existence of state laws exempting
compounded medications from new drug approval is not sufficient
reason for the court to conclude that Empower is entitled to the
protection of those laws. Asserting that the crux of its Complaint
is that Empower is not complying with state regulations governing
sale of new drugs, Lilly argues that Empower’s reliance on
exemptions accorded by state law raise affirmative defenses that
cannot be decided on a motion to dismiss.73 Without disputing that
its exemption argument is an affirmative defense, Empower replies
that “affirmative defenses that are apparent on the face of the
71(...continued)
§ 461-15(6) (requiring any entity engaged in the sale of compounded
medications to first obtain a permit from the board to do so); S.C.
Code Ann. § 40-43-86(CC) (setting forth requirements for
compounding of medication by pharmacies permitted in South
Carolina); Tenn. Code Ann. § 63-10-216 (setting forth Tennessee’s
licensing requirements for pharmacies engaged in compounding);
Wash. Admin. Code § 246-945-100 (setting forth Washington’s minimum
standards for pharmacies engaged in compounding)).
72Id. at 43-44.
73Plaintiff’s Opposition to Defendant’s Motion to Dismiss,
Docket Entry No. 49, pp. 22-24.
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Complaint may be considered at this stage.”74 Asserting that it
“sought judicial notice of its active nonresident pharmacy licenses
in each state,”75 Empower replies that its
state licenses and the pharmacy regulatory schemes in
these states authorize the exact conduct of which Lilly
complains — selling and dispensing compounded medications
absent undergoing new drug approval. The regulatory
exemptions, therefore, apply.
. . . Lilly hedges that Empower must “prove”
compliance with each states’ compounding requirements to
invoke these exemptions — but that argument wildly
misstates these exemptions. The exemptions turn on
whether the complained of activity is “permitted” or
“authorized.” The statutes and Empower’s judicially
noticeable licenses resolve that question on the
pleadings; they show the specific challenged activity —
selling and dispensing compounded medications absent new
drug approval — is authorized and regulated and thus not
actionable as “unapproved drug” sales under these states’
consumer statutes. Empower need not “prove” compliance
with each states’ compounding requirements because
Lilly’s complained of conduct rests on the general
assertion that new drug approval is necessary for
compounded medications. ECF 1 ¶¶ 168, 182, 194, 207,
219, 231, 244, and 272.76
Empower’s argument that Lilly’s state law claims are exempted
is premised on the contention that “Lilly’s complained of conduct
rests on the general assertion that new drug approval is necessary
74Defendant’s Reply in Support of Motion to Dismiss, Docket
Entry No. 53, p. 13 (citing inter alia American Precision
Ammunition, L.L.C. v. City of Mineral Wells, 90 F.4th 820, 824 (5th
Cir. 2024) (“[a] Rule 12(b)(6) dismissal may also ‘be appropriately
based on a successful affirmative defense’ provided that the
affirmative defense ‘appear[s] on the face of the
complaint’”)(internal citation omitted).
75Id. at 14.
76Id.
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for compounded medications.”77 This argument is not persuasive
because it mischaracterizes Lilly’s state law claims. Lilly’s
state law claims are all based on allegations that Empower engages
in unfair competition by selling unapproved new drugs, specifically
its Tirzepatide ODT and tirzepatide/niacinamide injections, in each
of the named states in violation of state laws that proscribe the
sale of unapproved new drugs.78 Moreover, Lilly also alleges that
Empower engages in unfair competition under the laws of Colorado,
Connecticut, South Carolina, Tennessee, and Washington, but not
Hawaii, by marketing and selling its tirzepatide medications as
unique, personalized, compounded medicine, when, in fact, Empower
does not tailor its drugs to patients’ needs.79 Empower’s arguments
do not justify relief on a Rule 12(b)(6) motion to dismiss because
— as the parties concede — each state’s exemption constitutes an
affirmative defense that Empower is required to plead and prove.
See Fed. R. Civ P. 8(c)(1) (requiring defendants “[i]n responding
to a pleading,” to “affirmatively state any avoidance or
affirmative defense”). As the Fifth Circuit stated in Zyla, on a
motion to dismiss, a defendant “cannot have proven that it
77Id.
78Complaint, Docket Entry No. 1, pp. 57 ¶¶ 181-82 (Colorado);
59 ¶ 194-95 (Connecticut); 61 ¶¶ 207-08 (Hawaii); 65 ¶¶ 231-32
(South Carolina); 67 ¶¶ 244-45 (Tennessee), and 72 ¶¶ 272-73
(Washington).
79Id. at 58 ¶ 184 (Colorado); 60 ¶ 198 (Connecticut); no
Hawaiian corollary; 65-66 ¶ 234 (South Carolina); 68 ¶ 247
(Tennessee); 72 ¶ 275 (Washington).
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satisfies” the statutory requirements for authorized compounding
because courts must “draw factual inferences in” the plaintiff’s
favor on the question of the defendant’s “compliance with” federal
and state law. 134 F.4th at 331 n. 2 (discussing compliance with
21 U.S.C. § 353b’s many requirements). Lilly’s Complaint needs to
— and does — allege that Empower violates state law, but does not
need to allege that Empower does not qualify for a statutory
exemption. See Revive, 812 F. Supp. 3d at 736 (citing Cunningham
v. Cornell University, 145 S. Ct. 1020 (2025) (addressing a similar
issue with respect to the Employee Retirement Income Security
Retirement Act). See also Federal Trade Commission v. Morton Salt
Co., 68 S. Ct. 822, 827 (1948) (recognizing as a “general rule of
statutory construction that the burden of proving justification or
exemption under a special exception to the prohibitions of a
statute generally rests on one who claims its benefits”). The
court concludes, therefore, that Empower is not entitled to
dismissal of Lilly’s claims for violation of the unfair competition
laws of Colorado, Connecticut, Hawaii, South Carolina, Tennessee,
and Washington, merely because those laws exempt regulated conduct
such as drug compounding that Empower contends it practices. See
Zyla, 134 F.4th at 331 n.2 (recognizing that courts cannot draw
factual inferences in favor of a defendant like Empower seeking
dismissal under Rule 12(b)(6)). See also Revive, 812 F. Supp. 3d
at 736-37 (denying motion to dismiss analogous claims under Alaska,
Connecticut, North Carolina, Tennessee, and Washington law).
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IV. Empower’s Motions to Stay Discovery and for Protective Order
Empower’s Motion to Stay Discovery (Docket Entry No. 46),
seeks a stay pending a ruling of its Motion to Dismiss.80 Because
the court has now ruled on Empower’s Motion to Dismiss, Empower’s
Motion to Stay Discovery is moot.
Empower’s Motion for Protective Order (Docket Entry No. 73),
seeks an order abating discovery pending a ruling on Empower’s
Motion to Dismiss.81 Because the court has now ruled on Empower’s
Motion to Dismiss, Empower’s Motion for Protective Order is moot.
V. Conclusions and Order
For the reasons stated above in § III.A, the claims that Lilly
has asserted against Empower under the Lanham Act are DISMISSED for
failure to allege facts capable of establishing the proximate cause
requirement for statutory standing to pursue that claim.
For the reasons stated above in § III.B.1, the court concludes
that the state law claims Lilly has asserted against Empower are
not preempted by federal law.
For the reasons stated above in § III.B.2, the claims that
Lilly has asserted against Empower under Texas common law are
DISMISSED for failure to state a claim for which relief may be
granted.
80Defendant’s Motion to Stay Discovery, Docket Entry No. 46,
p. 1. See also Proposed Order, Docket Entry No. 46-1.
81See Defendant’s Motion for Protective Order, Docket Entry
No. 73, p. 1. See also Proposed Order, Docket Entry No. 73-2.
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F or the reasons stated above in§ III.B.3, the court concludes
that the claims Lilly has asserted against Empower under the state
laws of Alaska, Colorado, Connecticut, Hawaii, North Carolina,
South Carolina, Tennessee, and Washington are not subject to
dismissal because they are not barred by exemptions to the state
laws at issue.
Therefore, Empower's Motion to Dismiss, Docket Entry No. 34,
is GRANTED in PART and DENIED in PART.
For the reasons stated above in § IV, Defendant's Motion to
Stay, Docker Entry No. 46, is DENIED as MOOT, and Defendant's
Motion for Protective Order, Docket Entry No. 73, is DENIED as
MOOT.
S�GNED at Houston, Texas, this 29th day of April, 2026.
SIM LAKE
SENIOR UNITED STATES DISTRICT JUDGE
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