Supplement Marketer NiGen BioTech, Texas State AG Close to Settling Lawsuit

NiGen BioTech LLC, a manufacturer and distributor of dietary supplements, is close to settling a lawsuit that it filed years ago against the attorney general of the State of Texas.

The “case has settled in principle, pending state approvals," according to a joint status report that was filed last month with the federal district court in Dallas. “Upon receipt of such approvals, the parties intend to jointly move for dismissal of this action, the terms of which are agreed."

NiGen filed a lawsuit in December 2011 after Texas’ state attorney general notified the company that use of the term “hCG" in dietary supplement packaging and labeling was false, misleading or deceptive. The office of Greg Abbott, the state attorney general at the time and currently governor of Texas, also contacted NiGen’s retail customers, prompting CVS Pharmacy, Walgreens and Wal-Mart to remove the weight-loss products—purportedly costing NiGen millions of dollars.

NiGen sued Abbott, claiming he was responsible for violations of its constitutional and civil rights. The company also sought injunctive relief and asserted tortious interference with existing business relations. A federal judge in 2014 dismissed the case, finding it was barred by the 11th Amendment to the U.S. Constitution, or the doctrine known as sovereign immunity insulating states from lawsuits.

Last fall, as INSIDER reported, a federal appeals court partially revived the case, sending it back to the trial court to decide certain constitutional claims.

It now appears the lawsuit will not make it to trial. The parties intend to notify the court on the status of settlement talks by April 1 if they don’t move for dismissal by then, according to a Feb. 12 court document.

Citing pending litigation, the Texas Attorney General’s Office declined to comment. Jason Kerr, a lawyer representing NiGen, did not respond Monday to a request for comment.

The lawsuit is in the U.S. District Court for the Northern District of Texas, Dallas Division, 3:11-cv-3341-G.