IN THE UNITED STATES COURT OF APPEALS

FOR THE FIFTH CIRCUIT

No. 14-10923

NIGEN BIOTECH, L.L.C., a Utah limited liability company, 

 Plaintiff - Appellant

v.

KEN PAXTON, in his official capacity as the Attorney General for the State 

of Texas, 

 Defendant - Appellee

Appeal from the United States District Court

for the Northern District of Texas

Before DAVIS, JONES, and CLEMENT, Circuit Judges.

EDITH H. JONES, Circuit Judge:

A manufacturer and distributor of over-the-counter dietary 

supplements, Isodrene and The HCG Solution, appeals the district court’s 

order dismissing its constitutional and state law claims against the Attorney 

General of the State of Texas on the sole basis of state sovereign immunity.

We conclude that it is at least partially correct that NiGen’s claims are not 

barred from federal jurisdiction on the basis of Ex parte Young; federal 

jurisdiction plainly exists over most of the constitutional claims pled; and 

United States Court of Appeals

Fifth Circuit

FILED

September 30, 2015

Lyle W. Cayce

Clerk

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NiGen has standing to sue. Accordingly, we affirm in part, and vacate and 

remand in part for further proceedings.

BACKGROUND

NiGen makes and sells dietary supplements, two of which contain the 

“individual amino acid building blocks” of prescription-drug ingredient hCG.1 

The company labels the packages of these products with the term “hCG,” which 

the Attorney General of the State of Texas (the “AG” or the State) determined 

was “false, misleading, or deceptive” in violation of the Texas Deceptive Trade 

Practices Act (“DTPA”) because, among other reasons, “the claim is trying to 

mimic claims that FDA considers off-label for the prescription drug.” In 

October 2011, the AG sent letters to this effect to NiGen and its retailers, 

including CVS, Walgreens, and Wal-Mart, intimating that formal enforcement 

was on the horizon for both NiGen and the retailers. The retailers pulled the 

products from their shelves in Texas and other states, allegedly costing NiGen 

millions of dollars in lost revenue.

NiGen filed suit in December 2011 under 42 U.S.C. § 1983, alleging 

violations of its rights under the First Amendment, Fourteenth Amendment 

Due Process and Equal Protection Clauses, the Commerce Clause, and the 

Supremacy Clause. The company also alleged a state law claim of tortious 

interference with existing business relations. NiGen sought 1) a declaration 

that its labeling did not violate federal law and that it was entitled to use 

“HCG” on its labels; 2) preliminary and permanent injunctive relief; 3) money 

damages; and 4) costs and attorneys’ fees.

 1 hCG is an acronym for human chorionic gonadotropin hormone, a protein found in 

pregnant women that is an ingredient in prescription drugs sold under the brand names 

Novarel, Ovidrel, and Pregnyl.

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The AG moved for dismissal, alleging both jurisdictional and pleading 

defects. As for the jurisdictional claims, the AG argued that the plaintiff 

lacked Article III standing because the only injury to NiGen was the result of 

third-party action; that the “federal statutory claim” was non-justiciable 

because NiGen asked for a declaration that its labeling did not violate FDA 

law, though the AG was never attempting to enforce federal law; and that state 

sovereign immunity barred the money damages and state law claims. The 

AG alternatively averred that NiGen’s claims fail to state a claim as required 

by Federal Rule of Civil Procedure 12(b)(6). Substantial briefing and pretrial 

motions preceded the submission of these motions to the court in July 2012. 

For reasons not apparent in the record, the district court did not rule for 

almost two years. Then, despite the plethora of jurisdictional issues before it,

the court dismissed the entire case as barred by state sovereign immunity. 

NiGen seasonably appealed.

STANDARD OF REVIEW

We review the trial court’s jurisdictional determinations de novo.

Fontenot v. McCraw, 777 F.3d 741, 746 (5th Cir. 2015). “The question of 

whether state defendants are entitled to sovereign immunity is likewise 

reviewed de novo.” Moore v. La. Bd. of Elementary & Secondary Educ., 

743 F.3d 959, 962 (5th Cir. 2014); see also Hale v. King, 642 F.3d 492, 497 (5th 

Cir. 2011) (per curiam). We review the court’s rulings on Rule 12(b)(6) 

motions de novo and must determine whether the pleaded facts state plausible 

claims that are cognizable in law. Bell Atl. Corp. v. Twombly, 550 U.S. 544, 

570, 127 S. Ct. 1955, 1974 (2007). Federal courts may analyze arguments 

that question our jurisdiction in any order. In this unusual situation, all of 

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the jurisdictional arguments must be addressed for NiGen’s suit to proceed in 

federal court.

DISCUSSION

The district court concluded that state sovereign immunity barred

NiGen’s entire suit and therefore pretermitted analysis of the AG’s other 

arguments. The district court cited Aguilar v. Texas Department of Criminal 

Justice for the broad proposition that “a suit against state officials that is in 

fact a suit against a State is barred regardless of whether it seeks damages or 

injunctive relief.” 160 F.3d 1052, 1053 (5th Cir. 1998) (quoting Pennhurst 

State Sch. & Hosp. v. Halderman, 465 U.S. 89, 102, 104 S. Ct. 900, 909 (1984)). 

This is deficient not least because shortly thereafter the opinion acknowledges 

the availability of Ex parte Young suits to enforce federal law.2 Rather than 

fully defend the district court’s reasoning, the AG resurrects its original

arguments against federal jurisdiction and raises new ones.

A. State Sovereign Immunity

The several states of our union retained those aspects of sovereignty that 

the people did not explicitly assign to the federal government. 3 Since the 

judicial article does not “create new and unheard of remedies,” Hans v. 

Louisiana, 134 U.S. 1, 12, 10 S. Ct. 504, 506 (1890), the sovereign states cannot 

be sued without their consent. See Papasan v. Allain, 478 U.S. 265, 276, 

106 S. Ct. 2932, 2939 (1986). As a result, “Federal courts are without 

 2 Moreover, Aguilar itself was filed not against an individual state officer acting in 

his official capacity, but against the Texas Department of Criminal Justice, a state agency 

that shares the sovereign immunity of the State of Texas.

3 Alden v. Maine, 527 U.S. 706, 713, 119 S. Ct. 2240, 2246-47 (1999); see also In re 

New York, 256 U.S. 490, 497, 41 S. Ct. 588, 589 (1921) (discussing state sovereign immunity 

as “the fundamental rule of which the amendment is but an exemplification”).

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jurisdiction over suits against a state, a state agency, or a state official in his 

official capacity unless that state has waived its sovereign immunity or 

Congress has clearly abrogated it.” Moore, 743 F.3d at 963. Texas has not 

consented by statute, and § 1983 does not abrogate state sovereign immunity. 

Quern v. Jordan, 440 U.S. 332, 340, 99 S. Ct. 1139, 1145 (1979).

“A suit is not ‘against’ a state, however, when it seeks prospective, 

injunctive relief from a state actor . . . based on an alleged ongoing violation of 

the federal constitution.” K.P. v. LeBlanc, 729 F.3d 427, 439 (5th Cir. 2013). 

Under the doctrine articulated in Ex parte Young,4 209 U.S. 123, 28 S. Ct. 441 

(1908), a state official attempting to enforce an unconstitutional law “is 

stripped of his official clothing and becomes a private person subject to suit.” 

K.P. v. LeBlanc, 627 F.3d 115, 124 (5th Cir. 2010). “Suits by private citizens 

against state officers in their official capacit[ies] are not, therefore, 

categorically barred.” Fontenot, 777 F.3d at 752. NiGen sued the Attorney 

General in his official capacity, satisfying the first requirement of Ex parte 

Young. 

Certain of NiGen’s claims fail, however, to the extent they request

retrospective money damages. A claim for money damages “seek[s] to impose 

a liability which must be paid from public funds in the state treasury.” 

Edelman v. Jordan, 415 U.S. 651, 663, 94 S. Ct. 1347, 1356 (1974). As the AG 

correctly points out, the Eleventh Amendment bars federal court jurisdiction 

over such claims. 

 4 Although the doctrine is universally associated with Ex parte Young, the central

conceit can be traced further back. See, e.g., United States v. Lee, 106 U.S. 196, 197, 1 S. Ct. 

240, 241 (1882).

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Further, NiGen’s state law claim for tortious interference with contract 

fails to establish federal jurisdiction because the Ex parte Young doctrine only 

reaches alleged violations of federal law. McKinley v. Abbott, 643 F.3d 403, 

406 (5th Cir. 2011); see also Pennhurst State Sch. & Hosp., 465 U.S. at 106, 

104 S. Ct. at 911.

A final prerequisite of Ex parte Young is that “the relief sought must be 

declaratory or injunctive in nature and prospective in effect.” Saltz v. Tenn. 

Dep’t of Emp’t Sec., 976 F.2d 966, 968 (5th Cir. 1992). Notably, in the trial 

court, the AG did not move to dismiss NiGen’s federal claims for declaratory 

and injunctive relief on the grounds that they failed to request prospective 

relief. Now, on appeal, the AG argues for the first time that even the 

injunctive and declaratory claims are ineligible for Ex parte Young because the 

plaintiff does not allege an “ongoing violation of federal law.” It is true that a 

complaint must allege that the defendant is violating federal law, not simply 

that the defendant has done so.5 See Green v. Mansour, 474 U.S. 64, 71-73, 

106 S. Ct. 423, 427-29 (1985). The State argues that whatever “smattering of 

present tense language” is in the complaint does not suffice to allege an ongoing 

violation of federal law. Assuming arguendo that the AG has not waived this 

argument by failing to raise it in the district court,6 we are unpersuaded, for 

the Supreme Court has explained that courts generally conduct a 

“straightforward inquiry into whether [the] complaint alleges an ongoing 

 5 This requirement is similar but not identical to the Article III minimum for standing 

to request an injunction, which requires ongoing harm or a threat of imminent harm. See 

City of Los Angeles v. Lyons, 461 U.S. 95, 105, 103 S. Ct. 1660, 1667 (1983).

6 See Union Pac. R.R. Co. v. La. Pub. Serv. Comm’n., 662 F.3d 336, 342 (5th Cir. 2011)

(state did not waive Eleventh Amendment immunity defense by not raising it in the district 

court, where it defended the suit on the merits).

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violation of federal law.” Verizon Md., Inc. v. Pub. Serv. Comm’n., 535 U.S. 

635, 645, 122 S. Ct. 1753, 1761 (2002) (alteration in original). NiGen points 

to the complaint’s straightforward allegations, of which there are many, that 

the AG’s continued refusal (now after nearly four years) to justify its 

threatening letters still inflicts, inter alia, an unconstitutional restraint on its 

commercial speech, punishment without due process, and other constitutional 

violations. These allegations are sufficient to demonstrate the ongoing nature 

of the alleged unconstitutional conduct, which a federal court could remedy 

through prospective relief. 

B. Federal Question Jurisdiction

The parties also join issue over this court’s subject matter jurisdiction, 

yet all of NiGen’s claims except for tortious interference are brought under 

§ 1983, a federal statute, and allegedly arise under the U.S. Constitution. “A

suit arises under the law that creates the cause of action.” Am. Well Works 

Co. v. Layne & Bowler Co., 241 U.S. 257, 260, 36 S. Ct. 585, 586 (1916).

The AG argues that all of the federal claims here are really defenses to 

its threatened DTPA enforcement action. According to the well-pleaded 

complaint rule, federal jurisdiction is absent when the federal issue appears in 

the guise of an anticipated defense. E.g., New Orleans & Gulf Coast Ry. Co. 

v. Barrios, 533 F.3d 321, 328 (5th Cir. 2008). And in an action for declaratory 

judgment, the inquiry is inverted: Since a declaratory judgment action is 

inherently anticipatory, the federal issue must form part of the hypothetical 

well-pleaded complaint that the declaratory judgment defendant would have 

filed but for the anticipatory action. See Skelly Oil Co. v. Phillips Petroleum

Co., 339 U.S. 667, 671, 70 S. Ct. 876, 879 (1950). 

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To the extent that NiGen seeks as its first cause of action a declaration 

that “its use of the letters ‘HCG’ on its packaging and labeling has not violated 

any federal law, and that Plaintiff is entitled to use the letters ‘HCG’ on its 

packaging and labeling for Isodrene and The HCG Solution,” the company’s 

allegations plainly assert a defense to a not-yet-commenced state enforcement 

action. Although the question whether NiGen’s product and labelling 

comport with federal FDA law may become a defense in such an enforcement 

action, this is hardly a sure thing; the State’s letters principally alleged 

potential violations of state deceptive trade practices law. This court’s recent 

decision in Singh v. Duane Morris LLP, 538 F.3d 334, 338 (5th Cir. 2008) set 

out a four-part test, determining that a federal court may exercise jurisdiction 

over a state law cause of action when: “(1) resolving a federal issue is 

necessary to the resolution of the state-law claim; (2) the federal issue is 

actually disputed; (3) the federal issue is substantial; and (4) federal 

jurisdiction will not disturb the balance of federal and state judicial 

responsibilities.” The party asserting jurisdiction has the burden to prove all 

of these elements. NiGen’s stand-alone pleading for declaratory relief plainly 

does not satisfy the first three tenets on the present state of the record.

The AG more generally contends that all of NiGen’s claims are 

essentially anticipatory defenses to the threatened enforcement action, hence 

all are barred. We disagree with this proposition. A number of cases have 

held that where a plaintiff in NiGen’s position seeks both declaratory and 

injunctive relief, the Wycoff rule 7 does not prevent that plaintiff from 

 7 Public Service Comm’n. of Utah v. Wycoff Co., 344 U.S. 237, 248, 73 S. Ct. 236, 242-

43 (1952)(looking to whether federal jurisdiction exists over threatened action, not the 

defense, in a claim for declaratory relief).

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establishing federal jurisdiction. In A&R Pipeline Corp. v. Commissioner, 

State of Oklahoma, 860 F.2d 1571 (10th Cir. 1988) the court, when faced with 

an analogous case, sustained federal jurisdiction: 

We express no opinion concerning the dicta in Wycoff and its 

progeny because this suit is not based solely on a claim for 

declaratory judgment but also includes a claim for injunction. 

. . .

The district court’s jurisdiction to resolve the pipeline’s claim for 

injunction extends to enable the court also to resolve the issues 

raised by the declaratory judgment action.

We reached a similar conclusion in Braniff International, Inc. v. Florida 

Public Service Commission, 576 F.2d 1100 (5th Cir. 1978). In that case we 

stated:

We hold that where a party seeks injunctive and declaratory relief 

based upon the unconstitutionality of a state statute where there 

are no other concrete impediments to a proper exercise of federal 

question jurisdiction, the mere fact that the constitutional claims 

might be raised before a state administrative body charged with 

enforcement of the statute does not alone deprive the court of 

jurisdiction.

Regardless of the ultimate merit of NiGen’s claims, with the sole 

exception of the stand-alone declaratory judgment cause of action, there is 

federal question jurisdiction over the constitutional claims NiGen asserts 

under § 1983.

C. Standing

The State also challenges NiGen’s standing to bring this suit. It is true 

that “a plaintiff must demonstrate standing separately for each form of relief 

sought.” Friends of the Earth, Inc. v. Laidlaw Envtl. Servs. (TOC), Inc., 

528 U.S. 167, 185, 120 S. Ct. 693, 706 (2000). To have standing to sue, the 

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plaintiff must demonstrate injury in fact that is fairly traceable to the 

defendant’s conduct and that would be redressed by a favorable judicial 

decision. Lujan v. Defenders of Wildlife, 504 U.S. 555, 560, 112 S. Ct. 2130, 

2136 (1992). However, the complaint need only “allege facts from which it 

reasonably could be inferred,” Warth v. Seldin, 422 U.S. 490, 504, 95 S. Ct. 

2197, 2208 (1975), that it is “likely, as opposed to merely speculative, that the 

injury will be redressed by a favorable decision,” Lujan, 504 U.S. at 61, 

112 S. Ct. at 2137 (internal quotation marks omitted).

The injury-in-fact and traceability requirements are not disputed here. 

The AG has again taken a different tack on appeal and for the first time 

challenges redressability. We must address this contention as it goes to 

federal jurisdiction and cannot be waived, but the fact that it is late-raised 

reduces the credibility of the AG’s argument and disserves the efficiency of the 

judicial process.

In challenging redressability, the AG cites Lujan, which observed that 

standing to challenge government action “depends considerably upon whether 

the plaintiff is himself an object of the action (or forgone action) at issue.” 

504 U.S. at 561, 112 S. Ct. at 2137 (denying standing, in part because the only 

entities whose actions could redress the plaintiff’s alleged injury were 

nonparties that would not be bound by the judgment). Further, in Simon v. 

Eastern Kentucky Welfare Rights Organization, the plaintiffs complained that 

an IRS revenue ruling allowed favorable tax treatment for hospitals that 

treated indigents only in their emergency rooms (instead of also admitting 

them to inpatient care). 426 U.S. 26, 33, 96 S. Ct. 1917, 1922 (1976). The 

Supreme Court held that even an order forcing the IRS to change its policy 

would not necessarily result in the hospitals admitting indigent patients. Id. 

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at 43, 96 S. Ct. at 1926. The Court held that “unadorned speculation will not 

suffice to invoke the federal judicial power.” Id. at 44, 96 S. Ct. at 1927; see 

also Allen v. Wright, 468 U.S. 737, 758, 104 S. Ct. 3315, 3328 (1984) (IRS’s 

failure to enforce tax disadvantage against discriminatory private schools 

would not necessarily redress harm to students in segregated public schools). 

These cases, however, turned on remedying conduct that was not 

initially directed at the plaintiffs themselves. Here, the AG sent threatening 

letters not only to NiGen’s retailers in Texas but also to the company itself. 

As NiGen cogently explains, “these letters harmed NiGen directly because they 

amounted to a preliminary injunction against the lawful sale of NiGen’s 

products. NiGen’s retailers removed the products from their shelves only as 

a direct result of receiving the threatening letters from the Attorney General.” 

NiGen Reply Br. at 17. Further, because “NiGen itself continues to be 

effectively enjoined from selling its products,” a favorable court decision “would 

allow NiGen to again sell its products freely in Texas, whether directly, 

through its prior retailers, through other retailers, etc. It would allow NiGen 

to repair its damaged relationship with its retailers that has resulted from the 

Attorney General’s conduct. This is not speculative and is not dependent on 

the actions of third parties.” Id. at 17-18. As the Supreme Court has noted, 

where a plaintiff’s complaint alleges a continuing violation or the imminence 

of a future violation, a prayer for injunctive relief satisfies redressability. 

Steel Co. v. Citizens for a Better Env’t, 523 U.S. 83, 108, 118 S. Ct. 1003, 1019 

(1998).

Other court decisions cited by the Attorney General have found the 

“chain of forward causation” to be broken for redressability purposes, but they 

are distinguishable. For example, in Frank Krasner Enterprises, Ltd. v. 

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Montgomery County, the owner of an expo venue refused to grant a lease to a 

plaintiff gun vendor because of a law withdrawing local subsidies for shows 

where guns were sold. 401 F.3d 230, 232 (4th Cir. 2005). The Fourth Circuit 

held that even if the law were enjoined, the non-party owner might still decline 

to do business with the gun seller. Id. at 236. The court emphasized the 

absence of a case granting standing to a plaintiff that challenged a 

government’s decision not to subsidize a third party. Id. at 235-36. 

Similarly, in Glanton ex rel. ALCOA Prescription Drug Plan v. AdvancePCS 

Inc., 465 F.3d 1123, 1125 (9th Cir. 2006), the plaintiffs were beneficiaries of a 

mismanaged ERISA drug plan. But the court held that even if their suit 

against the manager’s misdeeds succeeded, it would not follow that the 

sponsors of the plan would reduce the price of the plaintiff’s benefits; 

consequently, the court could not redress their alleged injury. Id. at 1127. 

Of a similar nature is Pritikin v. Department of Energy, 254 F.3d 791, 799-801 

(9th Cir. 2001), in which the plaintiffs sued one federal agency on their claim 

that it had to fund another, with no guarantee that a favorable judgment would 

in fact cause the funding to occur. 

None of these cases sought, like NiGen’s, to lift a yoke of alleged 

unconstitutional conduct from the plaintiff’s own shoulders. None of them 

involved government enforcement threats against third parties. Were NiGen 

to succeed here and nullify the threats, the likelihood of NiGen’s success in 

returning its products to store shelves in Texas, given the normal marketplace 

incentives, is much greater than in these other cases. We make no predictions 

about the outcome of this case except to acknowledge that if NiGen succeeds in 

enjoining the AG’s conduct, which would require a retraction of the offending 

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letters and/or the instigation of procedurally adequate enforcement measures, 

NiGen could again conduct business as usual.

The district court did not rule on the AG’s Rule 12(b)(6) motion for failure 

to state a claim. For two reasons, we remand this ordinarily legal question to 

that court. First, nearly four years have passed since the delivery of the AG’s 

letters, and we cannot be certain that the facts concerning this case are the 

same as they were when suit was filed. Second, the dismissal motion seems 

to rely on discovery and matters outside the pleadings, suggesting that the 

entire record must be consulted, which is the province of summary judgment 

rather than a 12(b)(6) motion. The district court is the better venue for this 

analysis in the first instance. 

CONCLUSION

For the foregoing reasons, the judgment of the district court is 

AFFIRMED insofar as it dismissed NiGen’s claims for money damages, for 

state law violations, for retrospective relief, and for declaratory relief against 

a threatened enforcement action; the judgment is REVERSED insofar as it 

dismissed NiGen’s constitutional law claims; and the case is REMANDED for 

further proceedings.

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