Nigen Biotech, L.L.C. v. Ken Paxton
2015 U.S. App. LEXIS 17223
| 5th Cir. | 2015Background
- NiGen, a dietary-supplement maker, labeled two products with "HCG." Texas AG sent letters declaring the labeling "false, misleading, or deceptive" under the Texas DTPA and threatened enforcement; major retailers pulled the products, causing alleged lost revenue.
- NiGen sued the Texas Attorney General in federal court under 42 U.S.C. § 1983, alleging First Amendment, Due Process, Equal Protection, Commerce Clause, and Supremacy Clause violations, and also pleaded a state-law tortious-interference claim; it sought declaratory and injunctive relief, money damages, and fees.
- The AG moved to dismiss on multiple grounds: Eleventh Amendment/state sovereign immunity, lack of Article III standing (including redressability), non-justiciability of the federal-question claim, and Rule 12(b)(6) failure to state a claim.
- The district court dismissed the entire action on Eleventh Amendment sovereign-immunity grounds without reaching other defenses; NiGen appealed.
- The Fifth Circuit affirmed dismissal only as to claims seeking retrospective relief, money damages, state-law claims, and a stand-alone declaratory-judgment claim directed at a threatened enforcement action; it reversed dismissal of NiGen’s constitutional claims seeking prospective declaratory and injunctive relief and remanded for further proceedings (including merits/12(b)(6) issues).
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether state sovereign immunity bars suit against AG in official capacity | NiGen: Ex parte Young allows prospective injunctive/declaratory relief against state officers for ongoing federal-law violations | AG: Entire suit is effectively against the State and barred by sovereign immunity | Court: Ex parte Young permits NiGen's prospective federal constitutional claims; immunity bars retrospective money damages and state-law claims |
| Whether NiGen asserts an ongoing federal-law violation sufficient for Ex parte Young | NiGen: AG’s continuing refusal to retract/justify letters causes ongoing injury and constitutional violations | AG: Complaint uses only past-tense facts; no ongoing violation alleged | Court: Complaint alleges ongoing harm sufficient to satisfy Ex parte Young inquiry |
| Whether federal-question jurisdiction exists over the claims | NiGen: § 1983 constitutional claims raise federal questions; injunctive relief supports jurisdiction despite potential state enforcement | AG: Claims are anticipatory defenses to a threatened state enforcement action, so no federal jurisdiction | Court: Except for the standalone declaratory-judgment claim, federal question jurisdiction exists for the constitutional claims; declaratory claim seeking a pronouncement about FDA compliance lacks required connection |
| Whether NiGen has Article III standing (redressability) | NiGen: Letters directly targeted NiGen and caused retailers to pull products; injunctive relief would likely allow return to market and redress injury | AG: Any redress would depend on independent third-party actions (retailers), so relief is speculative | Court: Redressability satisfied—letters directly affected NiGen and prospective relief could lift the alleged restraint; standing exists for injunctive/declaratory relief claims |
Key Cases Cited
- Ex parte Young, 209 U.S. 123 (1908) (doctrine permitting suits for prospective relief against state officers for ongoing federal-law violations)
- Pennhurst State School & Hospital v. Halderman, 465 U.S. 89 (1984) (limits on suits against states and on state-law claims in federal court)
- Edelman v. Jordan, 415 U.S. 651 (1974) (retrospective monetary relief from state treasury barred by Eleventh Amendment)
- Lujan v. Defenders of Wildlife, 504 U.S. 555 (1992) (standing requirements: injury, traceability, redressability)
- Verizon Maryland Inc. v. Public Service Commission, 535 U.S. 635 (2002) (straightforward inquiry into whether complaint alleges ongoing federal-law violation)
- Bell Atl. Corp. v. Twombly, 550 U.S. 544 (2007) (plausibility pleading standard under Rule 12(b)(6))
- Singh v. Duane Morris LLP, 538 F.3d 334 (5th Cir. 2008) (four-part test for federal jurisdiction over state-law claims implicating federal issues)
- A & R Pipeline Corp. v. Comm’r, State of Oklahoma, 860 F.2d 1571 (10th Cir. 1988) (injunctive claim coupled with declaratory claim supports federal jurisdiction)
- Braniff Int’l, Inc. v. Florida Public Service Commission, 576 F.2d 1100 (5th Cir. 1978) (seeking injunctive and declaratory relief on constitutional grounds can support federal jurisdiction despite possible state administrative remedies)