http://hallofbeorn.com/Cards/Details/Followed-by-Night-RtR
When Revealed: The first player (choose 1): deals 1 damage to all allies in play and Followed by Night gains surge, or all enemies engaged with players make an immediate attack, if able.
Can you "choose" to do something that can not happen, if there is an option that can happen?
You have some 1 health allies in play, but have no engaged monsters... could you still choose option 2?