Opinion issued August 25, 2026
In The
Court of Appeals
For The
First District of Texas
NO. 01-25-00410-CV
EMPOWER CLINIC SERVICES, L.L.C. D/B/A EMPOWER PHARMACY,
Appellant
V.
SAMUEL PRAY, Appellee
On Appeal from the 234th District Court
Harris County, Texas
Trial Court Case No. 2024-85045
MEMORANDUM OPINION
This is an appeal from the trial court’s denial of a motion to dismiss under
the Texas Citizens Participation Act. See TEX. CIV. PRAC. & REM. CODE
§§ 27.001–.011. After Empower Clinic Services, L.L.C. d/b/a Empower Pharmacy
(“Empower”) sued its former employee to enforce a noncompetition agreement and other claims, the former employee, Samuel Pray, countersued alleging
retaliation under the federal False Claims Act, see 31 U.S.C. §§ 3729–3733, and
antitrust violations under the Texas Free Enterprise and Antitrust Act of 1983
(“TFEAA”). See TEX. BUS. & COM. CODE §§ 15.01–.52.
Empower moved to dismiss Pray’s counterclaims on the grounds that they
were based on or in response to Empower’s exercise of the right to petition. Pray
argued that the TCPA does not apply, his claims were statutorily exempt if it does
apply, and in any event, he proffered clear and specific evidence sufficient to make
a prima facie case as to each of his claims. The trial court denied the motion, and
Empower appealed, challenging the trial court’s denial of its motion and failure to
award monetary relief under the statute.
We conclude that the TCPA applies to both the retaliation and antitrust
claims, which are not statutorily exempt, and Pray failed to make a prima facie
case for either claim. Thus, the trial court erred by denying Empower’s motion to
dismiss.
We reverse and remand for further proceedings.
Background
I. Empower hires Pray.
Empower is a Houston-based compounding pharmacy that fills prescriptions
for “tens of thousands of clinics across the country,” and employs “[o]ver 1,200
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employees.” It is “the most advanced accredited 503A compounding pharmacy in
the country and an FDA-registered 503B outsourcing facility.” Samuel Pray did
not have a high school diploma, but he worked his way up in the pharmaceutical
industry, beginning as a pharmacy technician in 2010 and eventually overseeing
supply chain and logistics operations for several different pharmaceutical
companies. In 2019, Pray formed PSW Group, LLC (“PSW”), a company that
assists pharmaceutical companies with supply chain and logistics.
In May 2022 Empower hired Samuel Pray to be its Director of Supply
Chain. Empower alleged that it offered him “a six-figure starting salary; a $20,000
relocation bonus, the opportunity to earn an annual bonus in the amount of 12% of
his annual salary; full health insurance benefits, a 401(k) plan; life and AD&D
insurance, and paid time off.” Pray maintains that in addition to salary and
benefits, his supervisor, Rob Hopkins, expressly authorized him to use PSW as a
vendor to Empower. Pray asserts that this was part of the terms of his employment.
II. Pray signs two noncompetition agreements.
In May 2022, when Pray began working for Empower, he signed a
Confidentiality and Non-Compete Agreement (“the May 2022 non-competition
agreement”). The agreement recited that Pray, as an employee, would be “given
access to Confidential and Proprietary Information relating to Empower’s business
and affairs.” This agreement included a noncompetition provision that prohibited
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Pray from “engag[ing] in the manufacture, sale, and/or distribution of the same or
substantially similar pharmaceutical product lines, on behalf of any compounding
pharmacy” for three years “in Houston, Texas and its surrounding counties.” The
agreement also defined “prohibited activity,” which, among other things, included
“contribut[ing] knowledge . . . . to an entity engaged in the same or similar
business” as Empower, as well as “disclosure of trade secrets, proprietary
information, or Confidential Information.”
A couple of months later, Empower introduced an incentive compensation
plan (the “Phantom Stock” plan). Pray accepted an award of Phantom Stock and
contemporaneously signed a second “Confidentiality & Non-Compete” agreement
that the parties have referred to as the July 22 noncompetition agreement. The
restrictions in this agreement also ran for three years from the date of separation,
and it prohibited future employment with 21 listed companies—including Revive
Rx, LLC—anywhere in the United States.
III. Pray resigns after two years.
In a sworn declaration, Empower’s chief operating officer, Pejmon Jonathan
Abrarpour, stated that Pray “was charged with and expected to actively participate
in Empower’s process for ensuring its suppliers were properly vetted and its
products met regulatory standards” and Empower’s standards. Abrarpour said:
On a couple of occasions, Pray questioned the qualifications of a
potential supplier or raised a question about regulatory compliance in
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that capacity. At no point was Pray punished in any way for raising
these concerns. That was precisely what Empower wanted and
expected him to do. His concerns were appropriately received by
Empower and were considered and addressed.
Abrarpour recalled that “[f]or a brief period when its pre-existing vendors
were unable to keep up with demand, Empower engaged Pray’s company, [PSW],
to supply vials and stoppers (aka container closure components) to Empower.” He
stated that when other vendors became available, Empower decided to stop
purchasing from PSW because it was owned by an employee, not because of
“Pray’s alleged reports of FDA violations.”
Abrarpour stated in his declaration that around September 2023, several
Empower employees left the company to start a competing business, which
Empower alleged was done with “resources, opportunities, confidential
information, and trade secrets belonging to Empower.” An internal investigation
suggested that the departing employees had “conspired” with an Empower
consultant as they formed the new business. In October 2023, Empower sued those
individuals in federal court (the “Bio Filling case”). Two months later, Empower’s
outside counsel in the case interviewed Empower employees, including Pray, to
gather information for the pending lawsuit.
Pray maintains that while he worked for Empower, he discovered some
irregularities, including what he believed to be flagrant violations of FDA rules
done to maximize profits. For example, he maintains that management instructed
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him to buy low-cost noncompliant ingredients after an FDA audit. Pray maintains
that Empower believed it had a window of time after the audit in which its actions
would not be scrutinized.
Pray asserts that he lost a promised promotion and that contracts with PSW
were discontinued after he began telling upper management about the alleged FDA
violations. He described the interview concerning the Bio Filling case as an
interrogation and the working environment “toxic.” In his deposition, Pray said he
agreed to stay on after initially announcing his intention to resign in July 2024, but
by the end of August, “the relationship had deteriorated, and I just resigned.”
Abrarpour stated that Empower did not fire Pray. According to Abrarpour, in
July 2024, Pray announced that he was resigning to be closer to his family who did
not live in Houston. Abrarpour said that Pray was interested in staying through the
transition and in considering a remote working arrangement. Abrarpour denied
hearing any complaints about retaliation or the working environment from Pray,
saying: “He never said he was forced to resign because he had raised alleged FDA
violations or because Empower had silenced him or created a hostile work
environment.”
IV. Empower discovers irregularities and sues Pray.
Empower maintains that, after Pray left the company, “an internal
investigation revealed that, during Pray’s tenure, he had directed the theft of
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pharmaceutical products and caused Empower to engage in multiple financial
transactions in which Pray had significant undisclosed financial interests to its
[Empower’s] detriment.” Within days of his departure from Empower and
allegedly in violation of the 2022 noncompetition agreements, Pray went to work
for Revive Rx, LLC. In December 2024, Empower filed suit against Pray, PSW,
and others. Empower sued Pray for breach of fiduciary duty, conversion, fraud,
violations of the Texas Uniform Trade Secret Act, breach of contract, and civil
conspiracy.
V. Pray counterclaims, alleging retaliation and anticompetitive actions.
Pray answered and pleaded counterclaims. The first 25 numbered paragraphs
comprise the introduction and address Pray’s allegations of Empower’s FDA
violations and retaliation against him. In paragraph 14, Pray stated:
Soon after Mr. Pray confronted Empower executives about its illicit
purchases of API [active pharmaceutical ingredients], Mr. Pray was
unexpectedly hauled into a conference room in January 2024 with
multiple internal investigators. Rather than investigating Empower’s
purchase and use of adulterated API, Empower interrogated Mr. Pray
about recent employees who left Empower to form a separate
business. Empower recorded Mr. Pray’s responses. Empower’s
motive was clear: instill fears into Mr. Pray and apparently try to
gather ammunition against Mr. Pray if he continued to raise concerns
about the adulterated API.
Pray pleaded that another executive raised the same issues and was
terminated within a week. Pray alleged that for several weeks after the January
2024 meeting with investigators, he “remained silent . . . over concerns about being
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sued and/or his employment being terminated.” Pray stated that he again told
Empower about violations he observed in April and May 2024. Pray alleged that
soon after this meeting, Empower terminated its relationship with PSW,
“effectively reducing Mr. Pray’s pay.” Pray pleaded that “Empower had also
launched a campaign of suing or threatening to sue employees who left the
company and attempted to work elsewhere.” Pray was conflicted between
continuing to work for a company about which he had concerns, or continuing to
raise concerns or even leave the company, because “he knew that Empower would
continue to reduce his pay or fire and sue him.” He also alleged that Empower sued
him to silence and threatened him and similarly situated employees to silence them
about perceived legal violations.
Pray alleged that Empower required him to sign two noncompetition
agreements.
66. After Mr. Pray’s employment began, Empower required Mr.
Pray to sign a confidentiality and non-competition agreement on May
17, 2022.
67. The confidentiality provision expressly states that “Confidential
Information shall not include information that is generally available to
and known by the public[.]”
68. The document also included a vastly overbroad noncompetition
agreement. For instance, the non-competition agreement purports to
prohibit the employee from working for any compounding pharmacy,
whether a competitor of Empower’s or not, in any capacity for three
years.
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69. On July 18, 2022, on the heels of several c-suite and director
level employees departing, Empower Operations, LLC created a
“Phantom Stock Plan.”
70. However, the Phantom Stock Plan did not offer Mr. Pray any
stocks or shares.
71. The Phantom Stock Plan included an even broader three-year
noncompetition agreement that covered the entire United States and
U.S. territories and similarly prohibited the employee from working
for any pharmaceutical company in any capacity for three years.
Pray alleged Empower violated FDA rules in the process of compounding
drugs. He alleged violations of recordkeeping and reporting requirements, failing
to properly source raw materials, failing to properly produce compounded drug
products, failing to have proper licenses, approvals, policies and practices, and
generally “creating and enforcing a culture of disguise [and] noncompliance.” Pray
also alleged that he was instructed to purchase from suppliers that he believed had
potential quality issues, and that Empower falsified reports to the FDA to hide the
true source of the raw material ingredients. Pray alleged that Empower retaliated
after he confronted executives about the purchase of noncompliant API, lack of
documentation, other violations of FDA regulations, and the risks posed to
Empower’s clients who used those products.
90. Soon after Mr. Pray confronted Empower executives regarding
its adulterated API, Mr. Pray was unexpectedly hauled into a
conference room in 2024 with multiple internal investigators, who
were recording Mr. Pray’s responses to their questions.
9
91. Rather than investigating Empower’s purchase of adulterated
API, the Empower investigators interrogated Mr. Pray about recent executives who left Empower (or whom Empower terminated) and
formed a separate business.
97. Specifically, on the heels of Mr. Pray raising concerns about Empower’s illegal conduct, Empower’s COO instructed Mr. Pray to
stop using PSW to properly sanitize equipment and order quality API– effectively reducing Mr. Pray’s pay.
98. Meanwhile, Empower had also launched its campaign of suing
or threatening to sue employees who left the company and attempted to work elsewhere.
99. Empower’s interrogation of Mr. Pray, termination of other
employees who raised concerns about Empower’s illegal activities, and Empower cutting Mr. Pray’s pay created a work environment that, by design, instilled fear into and silenced Mr. Pray.
100. Mr. Pray was unsure of where to turn next. Mr. Pray knew that, if he continued to work at Empower, he risked criminal penalties
because of his knowledge of Empower’s use of adulterated API that consumers were not only consuming orally but also injecting via
syringes. On the other hand, if Mr. Pray continued to confront
Empower executives, he knew that Empower would take any and all
measures to silence Mr. Pray, such as by continuing to reduce his pay, terminating him, and suing him to prevent him from working
elsewhere in the industry that he was valuable.
101. Ultimately, as a result of the pay cut and toxic work
environment deliberated [sic] created by Empower, Mr. Pray was
forced to resign.
102. Now, as anticipated, Empower has launched this lawsuit against Mr. Pray as a method of trying to silence Mr. Pray, instilling fear into other director and executive level employees that departing Empower will be the end of that employee’s pharmaceutical career, and sending the message that confronting Empower about its violations of federal
10
regulations will result in Empower inflicting pain and disruption on
the whistleblowing employee.
Pray alleged claims for whistleblower retaliation under the federal False
Claims Act, 31 U.S.C. § 3730(h) and for violation of the Texas Free Enterprise and
Antitrust Act (TFEAA) related to the two noncompetition agreements he signed.
V. Empower seeks dismissal of Pray’s counterclaims under the TCPA.
Empower moved to dismiss Pray’s counterclaims under the TCPA.
Empower alleged that Pray’s claims were based on or in response to its right to
petition. It also argued that Pray lacked clear and specific evidence to support a
whistleblower retaliation claim under the federal False Claims Act and an antitrust
claim under the TFEAA.
Empower argued that Pray’s retaliation claim was “based on” and “in
response to” both the filing of its lawsuit and its communications pertaining to a
separate lawsuit. Empower’s chief operating officer, Abrarpour, stated in a
declaration that the so-called interrogation in Pray’s pleadings was actually an
interview related to an unrelated and then-ongoing lawsuit against former
employees.
Empower argued that Pray’s TFEAA claim was based on and in response to
its lawsuits against Pray and others who breached their contracts with Empower.
Empower also argued that the numerous references in Pray’s pleading to
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“attempted enforcement” of noncompetition agreements can refer only to lawsuits
to enforce contractual provisions.
In response, Pray argued five reasons to deny the motion. First, he argued
that his counterclaims were exempt from the TCPA under the employer-employee
and fraud exemptions. Second, he argued that Empower did not demonstrate that
the TCPA applies to his counterclaims, which he asserts were based on Empower’s
pre-lawsuit conduct. Third, he appears to argue that the TCPA does not apply when
a claim is only partly based on conduct protected by the statute. Fourth, he argues
that he can make a prima facie case for both claims based on his pleadings and
deposition testimony. Fifth, he argues that Empower did not assert a meritorious
defense or other reason it is entitled to judgment.
Pray attached excerpts from his own deposition as evidence, along with
copies of the contracts with Empower that he signed and a statement from a
supplier. In his deposition, Pray testified that when Empower hired him, he was
encouraged and authorized to run purchases through PSW “as terms of my
employment.” He also testified that he was “supposed to be elevated to vice
president” at Empower, but when the FDA removed a product from the market in
June or July 2023, his “VP opportunity was pulled” and “the relationship continued
to deteriorate over the next year as I was instructed to purchase the lowest cost
APIs regardless of quality in some cases.”
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After a non-evidentiary hearing, the trial court denied the motion to dismiss,
and Empower filed this interlocutory appeal.
Analysis
On appeal, Empower raises two issues challenging the denial of its motion to
dismiss and the denial of its requested monetary relief.
I. TCPA
A. Purpose
The TCPA’s statutorily expressed purpose is “to encourage and safeguard
the constitutional rights of persons to petition, speak freely, associate freely, and
otherwise participate in government to the maximum extent permitted by law and,
at the same time, protect the rights of a person to file meritorious lawsuits for
demonstrable injury.” TEX. CIV. PRAC. & REM. CODE § 27.002; Walgreens v.
McKenzie, 713 S.W.3d 394, 398–99 (Tex. 2025). The statute serves this dual
purpose “by authorizing a motion to dismiss early in the covered proceedings,
subject to expedited interlocutory review.” McLane Champions, LLC v. Houston
Baseball Partners LLC, 671 S.W.3d 907, 914 (Tex. 2023) (citing TEX. CIV. PRAC.
& REM. CODE §§ 27.003, 27.008).
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B. Burden Shifting Analysis for Dismissal
Trial courts review TCPA motions to dismiss in a multi-step process.
McLane Champions, 671 S.W.3d at 914; HouReal Corp. v. Rescue Concepts Inc.,
722 S.W.3d 145, 150 (Tex. App.—Houston [1st Dist.] 2025, no pet.).
1. The First Step
“A party moving for dismissal under the TCPA must demonstrate that the
TCPA applies to the ‘legal action’ against it—that is, that the action ‘is based on or
is in response to a party’s exercise of the right of free speech, right to petition, or
right of association.’” Walgreens, 713 S.W.3d at 399 (quoting TEX. CIV. PRAC. &
REM. CODE §§ 27.003, 27.005(b)); McLane Champions, 671 S.W.3d at 914.
Exercise of the right to petition is broadly defined by the TCPA, and as relevant to
this case, it means “a communication in or pertaining to . . . a judicial proceeding.”
TEX. CIV. PRAC. & REM. CODE § 27.001(4)(A)(i).
Although the Supreme Court has not settled on a comprehensive definition
of “based on or in response to,” it has stated that “phrases drawn from dictionary
definitions” such as “factually predicated on,” “a main ingredient of,” “a
fundamental part of,” and “in answer or reaction to” are “helpful in understanding
and applying” the statutory language. Walgreens, 713 S.W.3d at 398–99. However,
the protected activity need not be “the only ingredient,” and the legal action need
not be “solely dependent on proof of protected activity . . . or instituted solely in
14
reaction to protected activity.” Id. at 400–01. In determining whether the TCPA
applies, we can consider the proof that would be needed to support the claim. See
id. at 399, 401 (noting that NHTS claim “would require proof of the employer’s
negligence in hiring, training, and supervising the employee as well as the
employee’s subsequent negligent act or omission” and that “[w]hen either of the
alleged instances of negligence or other tortious conduct is based on or in response
to the exercise of a protected right, the TCPA applies”).
In determining whether the TCPA is applicable, we conduct “a holistic
review of the pleadings.” Adams v. Starside Custom Builders, LLC, 547 S.W.3d
890, 897 (Tex. 2018). “The basis of a legal action is not determined by the
defendant’s admissions or denials but by the plaintiff’s allegations.” Hersh v.
Tatum, 526 S.W.3d 462, 467 (Tex. 2017). The plaintiff’s petition is “the best and
all-sufficient evidence of the nature of the action.” Id. (quotations omitted).
If the movant fails to meet the initial burden to show that the challenged
action is based on or in response to the movant’s exercise of a statutorily protected
right, the motion to dismiss fails at this initial step. See TEX. CIV. PRAC. & REM.
CODE § 27.005(b).
2. The Second Step
If the moving party satisfies its initial burden, however, the second step
comes into play, shifting the burden of proof to the nonmovant to establish the
15
applicability of a statutory exemption or to establish by clear and specific evidence
a prima facie case for each essential element of its claim. See id. §§ 27.005(c),
27.010 (“Exemptions”); Walgreens, 713 S.W.3d at 399 (quoting TEX. CIV. PRAC.
& REM. CODE § 27.005(c)); McLane Champions, 671 S.W.3d at 914. A prima facie
case “refers to evidence sufficient as a matter of law to establish a given fact if it is
not rebutted or contradicted.” In re Lipsky, 460 S.W.3d 579, 590 (Tex. 2015). A
nonmovant presents clear and specific evidence of each essential element by
“provid[ing] enough detail to show the factual basis for [his] claim.” Id. at 591.
This standard requires more than mere notice pleading. Id. That is, a party
opposing a TCPA motion to dismiss must present actual evidence to establish by
clear and specific evidence a prima facie case for each essential element of the
claim in question: he may not rely on pleadings alone. See TEX. CIV. PRAC. & REM.
CODE § 27.005(c); Foley & Lardner LLP v. Dernick, No. 01-25-00109-CV, ---S.W.3d---, 2026 WL 1171546, at *12 (Tex. App.—Houston [1st Dist.] Apr. 30,
2026, no pet. h.); see also Buzbee v. Clear Channel Outdoor, LLC, 616 S.W.3d 14,
28–29 (Tex. App.—Houston [14th Dist.] 2020, no pet.).
If the nonmoving party fails to demonstrate the applicability of a statutory
exemption or if it cannot satisfy its burden to establish a prima facie case for each
essential element of its claim, the trial court must dismiss the suit. See TEX. CIV.
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PRAC. & REM. CODE §§ 27.005(b), 27.010; McLane Champions, 671 S.W.3d at
914.
3. The Third Step
Finally, if the nonmovant satisfies the second step, in the third step, the
movant has the opportunity to establish “an affirmative defense or other grounds
on which the moving party is entitled to judgment as a matter of law.” TEX. CIV.
PRAC. & REM. CODE § 27.005(d). If the movant satisfies the third step, the trial
court will dismiss the legal action.
C. Standard of Review
We review a trial court’s ruling on a TCPA motion to dismiss de novo.
Landry’s, Inc. v. Animal Legal Def. Fund, 631 S.W.3d 40, 45–46 (Tex. 2021). We
likewise interpret the TCPA and decide whether it applies to a legal action de
novo. See Youngkin v. Hines, 546 S.W.3d 675, 680 (Tex. 2018). In reviewing
whether a legal action is subject to or should be dismissed under the TCPA, we
consider the pleadings, evidence a court could consider under Texas Rule of Civil
Procedure 166a, and supporting and opposing affidavits stating the facts on which
the liability or defense is based. TEX. CIV. PRAC. & REM. CODE § 27.006(a). We
view the pleadings and evidence in the light most favorable to the nonmovant.
HouReal Corp., 722 S.W.3d at 151.
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Because “[d]ismissal under the TCPA is determined on a claim-by-claim
basis,” Union Pac. R.R. Co. v. Dorsey, 651 S.W.3d 692, 695–96 (Tex. App.—
Houston [14th Dist.] 2022, no pet.), we now consider each of Pray’s claims.
II. Retaliation Claim
A. First Step: TCPA Applies to Pray’s Retaliation Claim
We begin with Pray’s pleadings. Pray alleged that Empower retaliated
against him after he raised concerns about “illicit purchases of API [active
pharmaceutical ingredients].” He alleged Empower sought to silence him by taking
the following actions:
• “Interrogating” him in an unexpected, recorded interview with
multiple internal investigators in which he was questioned about
former employees who had recently left to form a separate business;
• Promptly terminating another executive who raised the same issues;
• Reducing his pay by terminating Empower’s relationship with PSW
shortly after Pray told Empower about additional violations he
observed in April and May 2024;
• Suing or threatening to sue employees who left the company and
attempted to work elsewhere;
• Suing him to silence him, and threatening him and similarly situated
employees to silence them about perceived legal violations.
• Causing him to resign due to the pay cut and toxic work
environment.
We also consider the factual allegations in the declaration of Empower’s
Chief Operating Officer. See TEX. CIV. PRAC. & REM. CODE § 27.006(a). He stated
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that the January 2024 interview that Pray claimed was Empower’s retaliatory
behavior “had nothing to do with” Pray’s alleged whistleblowing activity, but
instead was “an effort to develop the evidence pertaining to Empower’s thenpending lawsuit against other former employees” in the Bio Filling case.
Empower’s TCPA motion alleged that Pray’s claims were based on or in
response to its right to petition. Exercise of the right to petition includes a
communication in or pertaining to a judicial proceeding. Id. § 27.001(4)(A)(i). A
“‘communication’ includes the making or submitting of a statement or document in
any form or medium, including oral, visual, written, audiovisual, or electronic.” Id.
§ 27.001(1).
Some, but not all, of Pray’s factual allegations of retaliation are
communications in or pertaining to a judicial proceeding. First, the interrogation or
investigative interview was based on an actual, pending judicial proceeding, the
Bio Filling case. Thus, the interview was an exercise of the right to petition. See
Constellation Brands, Inc. v. Roach, No. 01-21-00155-CV, 2022 WL 17981666, at
*15 (Tex. App.—Houston [1st Dist.] Dec. 29, 2022, pet. denied) (mem. op.)
(holding that letter from in-house counsel regarding pending judicial proceeding
was an exercise of the right to petition). Suing other employees is an exercise of
the right to petition. See TEX. CIV. PRAC. & REM. CODE § 27.001(4)(A)(i). And the
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underlying lawsuit Empower filed against Pray is an exercise of the right to
petition. See id.
Termination of another employee, discontinuing a contractual relationship
with PSW, threatening to sue other employees, and creating a toxic work
environment, which allegedly prompted Pray to resign, are not factual allegations
based on or in response to the exercise of the right to petition. But the Supreme
Court has made it clear that a legal action need not be “solely dependent on proof
of protected activity . . . or instituted solely in reaction to protected activity.”
Walgreens, 713 S.W.3d at 400–01. Cf. Weldon v. Lilith Fund for Reprod. Equity,
735 S.W.3d 702, 708 (Tex. 2026) (considering “broader context” of factual
allegations to determine whether TCPA applied and stating, “When a TCPAprotected activity results in a legal action seeking to enjoin that activity, the legal
action is based on or in response to the protected activity.”).
In this case, Pray’s factual allegations demonstrate that a main ingredient or
fundamental part of his retaliation claim involves Empower’s exercise of the right
to petition, and the broader context of the factual allegations likewise supports this
determination. We conclude that this is sufficient to satisfy the first step of the
TCPA analysis, and we hold that the TCPA applies to the retaliation claim. See
Walgreens, 713 S.W.3d at 400–01.
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B. Second Step: Fraud Exemption Does Not Apply
The second step of the TCPA analysis shifts the burden to Pray to
demonstrate the applicability of an exemption or make a prima facie case. Pray
asserts that he did both, and unsurprisingly, Empower argues that he did neither.
Pray argues that the fraud exemption applies. The TCPA does not apply to
“a legal action based on a common law fraud claim.” TEX. CIV. PRAC. & REM.
CODE § 27.010(a)(12). “[W]hen a plaintiff’s cause of action, as pleaded, requires
proof of common law fraud as part of its elements, the claim is ‘based on a
common law fraud claim’ and is exempt from the TCPA.” Jetall Cos., Inc. v.
Sonder USA Inc., No. 01-21-00378-CV, 2022 WL 17684340, at *19 (Tex. App.—
Houston [1st Dist.] Dec. 15, 2022, no pet.) (mem. op.); accord Van Steenwyk v.
Applied Techs. Assocs., Inc., No. 14-24-00068-CV, 2025 WL 1692590, at *7 (Tex.
App.—Houston [14th Dist.] June 17, 2025, no pet.); Baylor Scott & White v.
Project Rose MSO, LLC, 633 S.W.3d 263, 282 (Tex. App.—Tyler 2021, pet.
denied).
Pray argues that his whistleblower retaliation claim is based on his
allegations that Empower acted to defraud the federal government. He asserts that
his refusal to participate in the allegedly fraudulent scheme (involving violating
FDA regulations pertaining to manufacturing compounded drug products) is proof
of his reasonable belief that a violation of the False Claims Act has occurred.
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Appellee’s Br. 37. We disagree with Pray because a claim for retaliation under the
False Claims Act does not require proof of common law fraud as part of its
elements. See Jetall Cos., 2022 WL 17684340, at *19.
The TCPA’s statutory fraud exemption applies to common-law fraud claims
and legal actions based on common-law fraud claims. Baylor Scott & White, 633
S.W.3d at 283. But the statutory exemption does not plainly apply the TCPA to
claims made under a federal statutory claim that is not based on common-law
fraud. See TEX. CIV. PRAC. & REM. CODE § 27.010(a)(12).
To prove common-law fraud, a plaintiff must prove the following elements:
(1) the defendant made a material misrepresentation; (2) that the defendant knew
was false or was made recklessly as a positive assertion without any knowledge of
its truth; (3) the defendant intended to induce the plaintiff to act upon the
misrepresentation; and (4) the plaintiff actually and justifiably relied upon the
misrepresentation and suffered injury as a result. JPMorgan Chase Bank, N.A. v.
Orca Assets G.P., L.L.C., 546 S.W.3d 648, 653 (Tex. 2018); Zorrilla v. Aypco
Constr. II, LLC, 469 S.W.3d 143, 153 (Tex. 2015).
The False Claims Act “is a fraud prevention statute.” U.S. ex rel. Patton v.
Shaw Servs., L.L.C., 418 Fed. Appx. 366, 369 (5th Cir. 2011). A party violates the
False Claims Act by taking various actions seeking payment from the government
that is not due and to which the party is not entitled. See 31 U.S.C. § 3729. Such
22
actions include “knowingly present[ing] or caus[ing] to be presented a false or
fraudulent claim for payment or approval” or “knowingly mak[ing], us[ing], or
caus[ing] to be made or used, a false record or statement material to a false or
fraudulent claim.” Id. § 3729(a)(1)(A)–(B). For the purpose of the False Claims
Act, a “claim” is defined as “any request or demand . . . for money or
property . . . .” Id. § 3729(b)(2). “The statute attaches liability, not to the
underlying fraudulent activity . . . but to the ‘claim for payment.” Patton, 418 Fed.
Appx. at 369 (cleaned up).
A retaliation claim under the False Claims Act requires proof that the
plaintiff was an employee, contractor, or agent, who was discharged, demoted,
suspended, threatened, harassed, or in any other manner discriminated against in
the terms and conditions of employment, because of lawful acts taken by the
plaintiff in furtherance of a civil action under the False Claims Act or because of
other efforts to stop one or more False Claims Act violations. 31 U.S.C.
§ 3730(h)(1); see Patton, 418 Fed. Appx. at 371–72 (“To bring an FCA retaliation
claim for his termination, Patton was required to show that he engaged in activity
protected under the statute, that his employer knew he engaged in protected
activity, and that he was discharged because of it.”).
Comparing the elements of a retaliation claim under the False Claims Act
with the elements of common-law fraud, we conclude that Pray’s claim is not a
23
legal action based on common-law fraud. See Baylor Scott & White, 633 S.W.3d at
283. A False Claims Act retaliation claim does not require proof of any of the
elements of common-law fraud. Compare 31 U.S.C. § 3730(h)(1), with JPMorgan
Chase Bank, 546 S.W.3d at 653. Accordingly, we hold that the TCPA’s fraud
exemption does not apply to Pray’s whistleblower retaliation claim.
C. Second Step: Pray Failed to Make a Prima Facie Claim for
Retaliation
Empower argues that Pray failed to make a prima facie case for retaliation,
specifically as to the first two elements of an FCA retaliation claim, and that Pray
failed to demonstrate that Empower’s stated legitimate, nonretaliatory reasons for
its actions were pretextual. Pray asserts that there was ample evidence to support
his retaliation claim.
In the second step of the TCPA analysis, Pray was required to present clear
and specific evidence that, if unrebutted, would support his claim for FCA
retaliation. See TEX. CIV. PRAC. & REM. CODE § 27.005(c). At a minimum, that
required evidence, not merely pleadings, (1) that Pray engaged in activity that is
protected by the FCA, (2) that Empower knew Pray engaged in activity protected
by the FCA, and (3) that Empower discriminated against him because of the
protected activity. See Patton, 418 Fed. Appx. at 371–72.
In response to Empower’s TCPA dismissal motion, Pray provided the
following evidence: (1) excerpts from his deposition; (2) the confidentiality and
24
non-compete agreement he signed in May 2022; (3) the confidentiality and noncompete agreement he signed in July 2022 as part of the Empower Phantom Stock
Plan; and (4) a statement dated September 2024 from Shezhen JYMed confirming
that LGM Pharma was its exclusive agent for US sales of tirzepatide, semaglutide,
and liraglutide from its Hubei JXBio manufacturing site.
We focus on the deposition excerpts because the two agreements and the
Shezhen JYMed statement are not relevant to the three elements of an FCA
whistleblower claim that Pray was required to support with clear and specific
evidence to avoid dismissal in the second step of the TCPA analysis. The
deposition excerpts show the following.
In 2022, Pray began work as a consultant and then a full-time employee of
Empower. Pray testified that he was “supposed to be elevated to vice president” in
late 2022 or early 2023. He said that he “pushed back” on regulatory issues,
specifically Empower’s continued use of semaglutide salt from Beijing that was
“sprinkl[ed]” with B12 after a memorandum from the FDA said compounding
manufacturers “should not be using semaglutide salt.” In June or July, the FDA
halted Empower’s production “for a couple of months.” Pray said that his “VP
opportunity was pulled,” and his relationship with Empower deteriorated. He
testified that he was “instructed to purchase the lowest cost APIs regardless of
quality in some cases.” Pray testified that he raised compliance issues in emails,
25
but he said that he did not know when he sent the emails and he did not have any
of those emails. When asked about the specific compliance issues he raised, Pray
testified: “Specifically on resuming the semaglutide base, the semaglutide salt and
the memorandum that came out stating semaglutide salt was not to be utilized.”
Because Pray presented selected excerpts of his deposition, the testimony is
discontinuous in places. After his response to the question about which compliance
issues he raised, the deposition pages attached to Pray’s TCPA response jump from
page 17 to page 56. On page 56, Pray’s testimony continues, but the question he is
answering is not in the record. Pray testified:
The FDA had just recently left our 503A option–or 503A, and
Shaun stated that the FDA won’t be at back for at least a year so we
have a window of opportunity. I didn’t agree with that.
Then after that that’s when the retaliation, several, yeah, so–
shortly after I was told not to utilize PSW Group and several of those.
That and several other things that appeared very retaliatory, and as
you can see, Shaun, without an NDA, engages with somebody off of
LinkedIn, provides our inventory numbers, negotiates with them and
then directs me to purchase it if it’s the cheapest option.
So knowing that it looked like there was some type of
retaliation or potential, I started seeing myself if there was any quality
issues or anything I could be held liable for.
Pray was asked, “what was the retaliation” after this meeting, which
occurred about a week after the meeting described above. Pray said: “I’m still
being directed to order product that could or could not be–there isn’t any mention
of appropriate quality measures or anything. It’s all predicated on the pricing.” The
26
transcript suggests that Pray was looking at an email that pertained to pricing of
APIs, but the email itself is not in the record. After that discussion, the deposition
excerpts jump from page 57 to page 77. On page 77, Pray is answering questions
about an Exhibit 12, a photo, which is not in the record on appeal.
The transcript then jumps ahead to page 82 of Pray’s deposition. Part of the
question posed to Pray is shown on page 82. On this page, Pray talks about a
memorandum the FDA issued in the first quarter of 2023 admonishing drug
compounding companies to discontinue use of semaglutide salt. Pray said that
Shaun Noorian, who was among Empower leadership, directed him to continue
producing compounded drugs using semaglutide salt despite the FDA memo. Pray
said he “strenuously” objected to that instruction. When asked for other examples
of being directed to do things that made him uncomfortable, Pray reiterated that in
the first quarter of 2024, after an FDA audit, he was pressured to buy cheaper API,
specifically GLPs. Again, the transcript shows that Pray was looking at an email
from Shaun Noorian, but the email itself is not in the record. Pray read part of the
email, which said: “Please add this provider to our list, give me an update and
procure the product if they are the lowest cost provider.” Pray understood that he
was directed to purchase a product regardless of whether it was compliant with
federal regulations. Pray said this directive circumvented the typical supplier
qualification and approval process.
27
Pray testified that he raised a concern about a supplier with a “Yahoo dot
com” email address with Noorian and Abrarpour, and their response was that it
went back to pricing. Apparently looking at the email, Pray said: “Looking at this
it looks like some type of middle man, Complete Medical Solutions at Yahoo
that’s trying to represent Beijing.”
The deposition excerpts then jump to page 91, where the questions and
answers pertain to vendors suggested to Revive and how he knew them. The
deposition excerpts then jump ahead to page 101, and Pray testifies that he
resigned around July 20, and he finally left Empower at the end of August. He said
that when he first joined Empower, he reported to Rob Hopkins, who hired him
and told him that he could run PSW simultaneously with his work at Empower.
Q. Who negotiated your contract at Empower, was it Rob?
A. Rob Hopkins.
Q. Was he involved with whether or not you could still use PSW
Group after you joined Empower?
A. 100 percent, yes.
Q. What did he tell you about that?
A. That’s why I moved to consulting. He wanted to hire me as a
full-time employee. I was fairly happy at my current job. I was
offered to run a PSW Group simultaneously which my
employer was happy with. He said you can absolute[ly] do that
here. In fact, I want to run everything through it as terms of my
employment.
28
Pray testified that he had Empower purchase from PSW from May 2022
until about April or May 2024. He said it stopped after the meeting when he was
told to purchase less expensive API. Pray said: “And when I pushed back on these
others that either had Yahoo or Gmail or Floridaeats or whatever accounts—that’s
when the comment came out that the FDA had just left and they just needed to
save money.” Pray clarified that PSW does not supply API, so he viewed the
instruction to stop buying from PSW to be punishment for his objections to
purchasing the lower cost API. Pray also testified that PSW never signed a
confidentiality or non-competition agreement with Empower. Pray said he had
access to confidential information, trade secrets, and pricing information, but it is
unclear whether he meant that he personally had that information or that PSW had
that information. He said the pricing information was “well-known.” No further
deposition excerpts appear in the record.
Pray has not made a prima facie case for his FCA retaliation claim because
even if his evidence was unrebutted, it does not satisfy the elements of an FCA
retaliation claim. In particular, he did not show that he engaged in activity
protected under the statute, that Empower knew that he did so, or that he was
discharged because of his protected activity.
This case is like U.S. ex rel. Patton v. Shaw Services, L.L.C., 418 Fed. Appx.
366, 369 (5th Cir. 2011), in which a carpenter on a partially government-funded
29
project brought a claim that his employer had received payment from the
government for allegedly substandard construction work in violation of the FCA.
See Patton, 418 Fed. Appx. at 367–68. Patton also pleaded an FCA retaliation
claim asserting that his repeated complaints to a supervisor about improper
construction methods constituted protected activity. See id. at 372. The Fifth
Circuit noted that “the substance of his complaints concerned Shaw’s allegedly
unsafe or improper construction methods, and not that Patton was concerned that
Shaw was defrauding the government.” Id. The court of appeals held that Shaw
was entitled to treat Patton’s complaints as suggestions for improvements, not a
precursor to litigation because the complaints about construction methods did not
show that Patton “put Shaw on notice that he was investigating fraud against the
government.” Id. “Mere criticism of Shaw’s construction methods, without any
suggestion that Patton was attempting to expose illegality or fraud within the
meaning of the FCA, does not rise to the level of protected activity.” Id.
Furthermore, the court of appeals concluded that Shaw could not have acted with
retaliatory intent without such knowledge.
Here, Pray’s evidence shows that he took actions internally to object to what
he believed was a violation of an FDA memorandum. According to his deposition,
the substance of Pray’s internal objections and complaints concerned Empower’s
alleged use of ingredients that did not comply with FDA regulations, not that he
30
was concerned that Empower was defrauding the government. Mere criticism of
Empower’s compounding methods, without any suggestion that Pray was
attempting to expose illegality or fraud within the meaning of the FCA does not
rise to the level of protected activity. See id. Nor does it demonstrate that Pray put
Empower on notice that he was investigating fraud against the government. See id.
Thus, Empower, like Shaw Services, could not have had the retaliatory intent
needed to support an FCA retaliation claim. See id.
We conclude that Pray failed to make a prima facie case for retaliation in the
second step of the TCPA analysis. We hold that the trial court, therefore, erred in
failing to dismiss the retaliation claim under the TCPA.
III. The Antitrust Claim
A. First Step: TCPA Applies to Pray’s Antitrust Claim
We again start with Pray’s pleadings. In his antitrust claim, Pray first
incorporated and realleged all preceding allegations from his pleading. Pray then
alleged that “Empower has engaged in contracts and conspiracies in restraint of
trade in violation of Texas’s Free Enterprise and Antitrust Act.” Pray’s allegations
focused on the “numerous noncompetition agreements, similar to the one that it
now seeks to enforce against Mr. Pray.” He alleged that Empower forced
employees to sign such agreements and sued or threatened to sue to enforce them.
Pray pleaded that this action was “unreasonable and has an adverse effect on
31
competition in the pharmaceutical industry.” Pray further alleged that it was
unreasonable for Empower to attempt to enforce these agreements through
litigation because “Empower has no legitimate business interests to protect, as the
information it seeks to protect is generally known in the industry,” and, in any
event, the “three-year prohibition on working for any competitor in any capacity is
unnecessary and lacks any relationship to protecting purported business interests.”
Pray alleged the following adverse market effects from the existence and attempted
enforcement of the noncompetition agreements:
• Lowering “the quality of products as evidenced by Empower’s
intentional approach of purchasing food and animal grade API” to
increase profit margin and market share;
• “[S]eeking to hide the pricing of pharmaceutical costs, leading to
price gouging”;
• “[P]reventing new companies from entering the market which
prevents or stalls innovation.”
Pray also alleged that he was injured personally by Empower’s “anticompetitive activity,” because he incurred expenses due to Empower’s attempt to
enforce the noncompetition agreements and to “effectively prevent him from
operating PSW.” He sought damages and to “enjoin Empower’s anti-competitive
activity.”
In his prayer for relief, Pray sought actual and exemplary damages, as well
as attorney’s fees, interest, and court costs. He also sought an injunction against
32
“Empower’s pattern of anti-competitive activity of forcing employees to sign
vastly overbroad noncompetition agreements and restraining trade (and damaging
the employee’s livelihood), as well as the competitiveness of the market after the
employee departs.”
Empower’s TCPA motion alleged that Pray’s claims were based on or in
response to its right to petition. Exercise of the right to petition includes a
communication in or pertaining to a judicial proceeding. TEX. CIV. PRAC. & REM.
CODE § 27.001(4)(A)(i). A “communication” includes the making or submitting of
a statement or document in any form or medium, including oral, visual, written,
audiovisual, or electronic.” Id. § 27.001(1).
In Weldon v. Lilith Fund for Reproductive Equity, 735 S.W.3d 702 (Tex.
2026), the Texas Supreme Court considered whether the TCPA applied to a suit for
declaratory judgment that also requested an injunction to prevent the defendant
(Weldon) from continuing a suit based on a prior Rule 202 petition for presuit
investigation. The Court first determined that the Rule 202 petition was an exercise
of the right to petition because it was a communication in a judicial proceeding.
735 S.W.3d at 707. In determining whether the TCPA applied, the Court stated:
“Whatever the outer bounds of ‘based on’ and ‘in response to,’ this case falls
comfortably within them. When a TCPA-protected activity results in a legal action
33
seeking to enjoin that activity, the legal action is based on or in response to the
protected activity.” Id. at 708.
That logic applies with equal force in this case. Pray’s antitrust claim
complained of the enforcement or attempted enforcement of the noncompetition
agreements, including Empower’s lawsuit against him, which is an example of
such enforcement or attempted enforcement. Empower’s suit against Pray is an
exercise of the right to petition because it is a communication in a judicial
proceeding. See TEX. CIV. PRAC. & REM. CODE § 27.001(4)(A)(i); Weldon, 735
S.W.3d at 707. Pray’s claim also sought an injunction against “Empower’s anticompetitive activity.” Because Empower’s exercise of its right to petition resulted
in Pray’s legal action seeking to enjoin it, Pray’s antitrust claim is based on or in
response to Empower’s suit, and the TCPA applies. See Weldon, 735 S.W.3d at
708.1
B. Second Step: Employer-Employee Exemption Does Not Apply
The second step of the TCPA analysis shifts the burden to Pray to
demonstrate the applicability of an exemption or make a prima facie case. Pray
argues that the employer-employee exemption applies to his antitrust claim, and
Empower argues it does not.
1
In addition, the gravamen of Pray’s antitrust claim was Empower’s use of
litigation, specifically the suit against Pray, to enforce noncompetition agreements.
See Walgreens v. McKenzie, 713 S.W.3d 394, 400 (Tex. 2025). Under Walgreens,
the TCPA applies to Pray’s antitrust claim.
34
The TCPA does not apply to “a legal action arising from an . . . employeeemployer . . . relationship that . . . seeks to enforce . . . a covenant not to compete.”
TEX. CIV. PRAC. & REM. CODE § 27.010(a)(5)(B). In this case, the legal actions
under scrutiny for the exemption analysis are Pray’s counterclaims, not Empower’s
lawsuit. See Human Power of N Co. v. Turturro, No. 03-24-00305-CV, 2024 WL
4643931, at *3 (Tex. App.—Austin Nov. 1, 2024, no pet.) (mem. op.). Despite
Pray’s tortured logic that his claim seeks to enforce the parties’ agreement “in
compliance with the Antitrust Act,” his antitrust counterclaim plainly seeks to
avoid Empower’s attempt to enforce the agreement. Appellee Br. 38. We therefore
conclude that the employee-employer exemption does not apply.
C. Second Step: Pray Failed to Make a Prima Facie Case for
Antitrust Claim
Empower argues that Pray failed to make a prima facie case for his antitrust
claim. In the second step of the TCPA analysis, Pray was required to present clear
and specific evidence that, if unrebutted, would support his antitrust claim. See
TEX. CIV. PRAC. & REM. CODE § 27.005(c).
The purpose of the Texas Free Enterprise and Antitrust Act of 1983
(“TFEAA”) is “to maintain and promote economic competition in trade and
commerce occurring wholly or partly within the state of Texas and to provide the
benefits of that competition to consumers in the state.” TEX. BUS. & COM. CODE
§ 15.04. We construe the Act “in harmony with federal judicial interpretations of
35
comparable federal antitrust statutes to the extent consistent with this purpose.” Id.;
see Coca–Cola Co. v. Harmar Bottling Co., 218 S.W.3d 671, 688–89 (Tex. 2006)
(“Because our own caselaw is limited, we rely heavily on the jurisprudence of the
federal courts.”).
The TFEAA provides that “[e]very contract, combination, or conspiracy in
restraint of trade or commerce is unlawful.” TEX. BUS. & COM. CODE § 15.05(a).
Despite the broad language of this provision, the TFEAA prohibits only
unreasonable restraints of trade that adversely affect competition in the relevant
market. AMC Entm’t Holdings, Inc. v. iPic-Gold Class Entm’t, LLC, 638 S.W.3d
198, 207 (Tex. 2022). We determine whether a restraint is unreasonable by
applying the “rule of reason” which requires us to “examin[e] a defendant’s
purpose in implementing the restraint and the restraint’s effect on competition”
along with related relevant factors. Id. (quoting Orson, Inc. v. Miramax Film
Corp., 79 F.3d 1358, 1367 (3d Cir. 1996) (citing Board of Trade of Chicago v.
United States, 246 U.S. 231, 238 (1918))); see also DeSantis v. Wackenhut Corp.,
793 S.W.2d 670, 688 (Tex. 1990) (holding that post-employment noncompetition
agreements “must be analyzed under the rule of reason”).2
2
Under the facts of this case, we apply the rule of reason. We note, however, that
the rule of reason is not in general the exclusive standard for determining whether
a restraint of trade is unreasonable. E.g., AMC Entm’t Holdings, Inc. v. iPic-Gold
Class Entm’t, LLC, 638 S.W.3d 198, 207 (Tex. 2022) (“Some kinds of
36
The Texas Supreme Court compared the rule of reason test to the
reasonableness analysis under common law in DeSantis:
Rule of reason analysis under antitrust laws must not be
confused with reasonableness analysis under the common law. Rule of
reason analysis tests the effect of a restraint of trade on competition.
By contrast, whether a noncompetition agreement is reasonable
depends upon its effect on the parties, the competitors, as it were. The
two standards are not directly related. An agreement may be
reasonable as between the parties and nevertheless violate antitrust
laws. Conversely, an agreement may be unreasonable as between the
parties and yet not violate the rule of reason test under the antitrust
laws.
DeSantis, 793 S.W.2d at 688 (citations omitted).
The TFEAA includes the following provision about the enforceability of
covenants not to compete:
Notwithstanding Section 15.05 and subject to any applicable
provision of Subsection (b) and Section 15.501, a covenant not to
compete is enforceable if it is ancillary to or part of an otherwise
enforceable agreement at the time the agreement is made to the extent
that it contains limitations as to time, geographical area, and scope of
activity to be restrained that are reasonable and do not impose a
greater restraint than is necessary to protect the goodwill or other
business interest of the promise.
TEX. BUS. & COM. CODE § 15.50(a).
Because the TFEAA limits the ability to bring suit to persons “whose
business or property has been injured by reason of any conduct declared unlawful
in Subsection (a), (b), or (c) of Section 15.05 of the Act,” TEX. BUS. & COMM.
conspiratorial agreements—a horizontal agreement to fix prices, for example—are
considered per se illegal.”).
37
CODE 15.21(a)(1), an antitrust plaintiff must demonstrate standing to sue by
showing “(1) injury-in-fact, an injury to the plaintiff proximately caused by the
defendant’s conduct; (2) antitrust injury; and (3) proper plaintiff status, which
assures that other parties are not better situated to bring suit.” In re Mem’l
Hermann Hosp. Sys., 464 S.W.3d 686, 709 (Tex. 2015).
“To establish a violation of section 15.05(a) of the Act under the rule of
reason, a plaintiff must show (1) a contract, combination, or conspiracy (2) that
had an adverse effect on competition (3) in a relevant market.” Regal Entm’t Grp.
v. iPic-Gold Class Entm’t, LLC, 507 S.W.3d 337, 346–48 (Tex. App.—Houston
[1st Dist.] 2016, no pet.) (citing Bus. Elecs. Corp. v. Sharp Elecs. Corp., 485 U.S.
717, 723 (1988), and DeSantis, 793 S.W.2d at 687).
Pray’s argument focuses on the reasonableness of the restraint in the
noncompetition agreements with Empower. Appellee’s Br. 46–47. Whether the
restraint is reasonable based on duration, geography, or prohibited activities is
relevant to the question of enforceability of the agreement as between Pray and
Empower, but it is wholly separate from the question posed by the rule of reason
analysis for the purpose of an antitrust violation. See DeSantis, 793 S.W.2d 688.
And it is separate from the prima facie case for the antitrust claim that Pray must
make to survive the second step of the TCPA analysis.
38
To survive the second step of the TCPA analysis, Pray was required to make
a prima facie case for his antitrust claim. To do so, Pray had to produce evidence
that, if unrebutted, would first prove his standing by showing (1) that he was
injured by Empower’s anti-competitive conduct, (2) an antitrust injury, and (3) that
he was the proper plaintiff to bring this suit because no other party is better situated
to bring this suit. See Mem’l Hermann Hosp. Sys., 464 S.W.3d at 709.3 Pray also
had to produce evidence that, if unrebutted, would prove the existence of (1) a
contract, combination, or conspiracy (2) that adversely effected competition (3) in
a relevant market. See Regal Entm’t Grp., 507 S.W.3d at 346–48.
Pray failed to make a prima facie case for an antitrust claim for several
reasons. First, he failed to produce evidence to show he had standing to sue under
the statute. To show he had standing to sue under the statute, he had to prove,
3
The concept of constitutional standing “deals with whether a litigant is the proper
person to bring the lawsuit.” Yasuda Fire & Marine Ins. Co. of Am. v. Criaco, 225
S.W.3d 894, 900 (Tex. App.—Houston [14th Dist.] 2007, no pet.) (quoting West v.
Brenntag Sw., Inc., 168 S.W.3d 327, 334 (Tex. App.—Texarkana 2005, pet.
denied)). Pray’s antitrust claim is a statutory claim that has specific statutory
requirements to confer standing to a litigant. See In re Mem’l Hermann Hosp. Sys.,
464 S.W.3d 686, 709 (Tex. 2015). “[T]he TFEAA does not operate as a qui tam
provision, but rather limits the ability to bring suit under the TFEAA to persons
‘whose business or property has been injured by reason of any conduct declared
unlawful in Subsection (a), (b), or (c) of Section 15.05 of [the] Act.’” Id. “Thus,
courts have held that standing to pursue an antitrust suit exists only if a plaintiff
shows (1) injury-in-fact, an injury to the plaintiff proximately caused by the
defendant’s conduct; (2) antitrust injury; and (3) proper plaintiff status, which
assures that other parties are not better situated to bring suit.” Accordingly, Pray
must produce evidence of an antitrust injury to show that he has standing to bring
his TFEAA claim. See id. Without such evidence, he cannot make a prima facie
case for his antitrust claim. See id.
39
among other things, an antitrust injury. See Mem’l Hermann Hosp. Sys., 464
S.W.3d at 709. As we said in section II.C., above, Pray’s evidence consisted of: (1)
excerpts from his deposition; (2) the confidentiality and non-compete agreement he
signed in May 2022; (3) the confidentiality and non-compete agreement he signed
in July 2022 as part of the Empower Phantom Stock Plan; and (4) a statement
dated September 2024 from Shezhen JYMed confirming that LGM Pharma was its
exclusive agent for US sales of tirzepatide, semaglutide, and liraglutide from its
Hubei JXBio manufacturing site. None of Pray’s evidence demonstrated an
antitrust injury.
“In order to successfully allege injury to competition, a . . . claimant may not
merely recite the bare legal conclusion that competition has been restrained
unreasonably.” Mem’l Hermann Hosp. Sys., 464 S.W.3d at 709–10 (quoting Les
Shockley Racing, Inc. v. Natal Hot Rod Ass’n, 884 F.2d 504, 507–08 (9th Cir.
1989)). Rather, a plaintiff must plead and prove “a reduction of competition in the
market in general and not mere injury to their own positions as competitors in the
market.” Id. at 709 (quoting NYNEX Corp. v. Discon, Inc., 525 U.S. 128, 134–35
(1998)). The plaintiff must plead and prove that the challenged restraint on trade
would adversely and unreasonably affect overall competitive conditions, and proof
may include specific “information about the relevant business, its condition before
40
and after the restraint was imposed, and the restraint’s history, nature, and effect.”
Id. at 710 (citations and quotations omitted).
Pray argues that the noncompetition agreements he signed would have
adverse effects, specifically in the market for compounding GLP-1 drugs. But he
did not produce any evidence about the condition of the market or businesses in the
market before and after imposition of the restraint, or the restraint’s history, nature,
and effect. Arguments of counsel are not evidence, and more so in this case, where
Pray’s arguments were relevant only to the enforceability of the noncompetition
agreements under section 15.50 of the TFEAA.
Moreover, even if Pray had demonstrated that he had statutory standing, we
would nevertheless conclude that he failed to make a prima facie case. Similar to
the analysis of an antitrust injury (for statutory standing), a plaintiff must plead and
prove an adverse effect on competition, not merely harm to an individual
competitor. Regal Entm’t Grp., 507 S.W.3d at 348. “In other words, a plaintiff
cannot demonstrate the unreasonableness of a restraint merely by showing that it
caused him an economic injury.” Id. (citations omitted). But an antitrust plaintiff
may satisfy his burden to show an adverse effect on competition “by proving the
existence of actual anticompetitive effects, such as reduction of output, increase in
price, or deterioration in quality of goods and services.” Id. (citations omitted).
41
In Pray’s response to Empower’s TCPA dismissal motion, and on appeal, he
argues about why the noncompetition agreements are unreasonable, but he makes
no argument or evidentiary proffer about an antitrust injury. This conflation of
what is necessary to satisfy a rule of reason analysis under antitrust laws and a
common law understanding of reasonableness (as applied to his defense to
enforcement of the noncompetition agreements) leaves Pray with no evidence to
satisfy a prima facie case for an antitrust violation. Cf. DeSantis, 793 S.W.2d 688
(explaining the difference between rule of reason analysis under antitrust law and
common law reasonableness analysis).
We conclude that Pray failed to make a prima facie case for an antitrust
claim in the second step of the TCPA analysis. We hold that the trial court,
therefore, erred by denying the TCPA as to the antitrust claim. We sustain
Empower’s first issue.
III. Remand for Award of Damages and Costs is Appropriate.
Empower argues that the trial court erred by denying its TCPA motion and
denying monetary relief available under the statute. The TCPA provides:
Except as provided by Subsection (c), if the court orders dismissal of
a legal action under this chapter, the court:
(1) shall award to the moving party court costs and
reasonable attorney’s fees incurred in defending against the
legal action; and
42
(2) may award to the moving party sanctions against the
party who brought the legal action as the court determines
sufficient to deter the party who brought the legal action from
bringing similar actions described in this chapter.
TEX. CIV. PRAC. & REM. CODE § 27.009(a). Because we have determined that the
trial court erred by denying Empower’s TCPA motion to dismiss, we will remand
to the trial court for additional proceedings under section 27.009(a). See id.
Conclusion
We reverse the trial court’s order denying Empower’s motion to dismiss,
and we remand the case to the trial court for further proceedings relating to
Empower’s attorney’s fees, costs, and expenses, and to order dismissal of Pray’s
retaliation and antitrust claims. All pending motions are dismissed.
Justice Susanna Dokupil
Panel consists of Justices Guerra, Caughey, and Dokupil.
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