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THE TEXAS TRIBUNE \u2013 A judge in Panola County won\u2019t block the maker of Tylenol from distributing $400 million of dividends to its shareholders amid Texas Attorney General Ken Paxton\u2019s lawsuit against the company. Kenvue, the company that makes Tylenol, will proceed with issuing the payment on Nov. 26, according to reporting from Reuters. \u201cThat is a distribution that\u2019s being made as part of the normal course of business,\u201d the lawyer for Kenvue told Reuters.<\/p>\n
The lawyer also said Texas has \u201cno jurisdiction\u201d to block Kenvue\u2019s dividend, since the company is based in New Jersey and incorporated in Delaware.<\/p>\n
The state of Texas last month sued Kenvue, claiming it failed to inform consumers about the risk of having a child with autism if they took the medication while pregnant. Major medical associations said Paxton\u2019s allegation overstated the unsettled science surrounding a possible link between autism and Tylenol.<\/p>\n
Paxton asked Judge LeAnn Rafferty in Panola County to block the payments, arguing the company may need that $400 million to pay out its legal liabilities if the state wins its case. The state\u2019s lawyers acknowledged it was an \u201cextraordinary request,\u201d and one that legal experts say is extremely uncommon at such an early stage in a lawsuit.<\/p>\n
Corporations typically have wide authority over how they handle their shareholder dividends, and state intervention is rare. But Texas brought its claims under a narrow exception to that rule, a state law that stops companies on the brink of insolvency from paying shareholders with funds that may be needed to pay creditors.<\/p>\n
Paxton\u2019s office filed the lawsuit in Panola, a county of about 22,000 people on the border with Louisiana. Trump won the county by 67 points in 2024. Rafferty, a Republican who has been on the bench since 2016, is the county\u2019s sole judge.<\/p>\n
A spokesperson for Kenvue said before the recent decision that the company was taking immediate legal action to stop the state from \u201ccontinuing to drive these reckless and scientifically unsound theories.\u201d<\/p>\n
\u201cThese politically and financially motivated actions will have a detrimental impact on public health for our consumers in this state,\u201d the spokesperson said in a statement. \u201cWe will do everything in our power to stand up for sound, credible science.\u201d<\/p>\n
Forcing Kenvue to hold its payment could have had a detrimental impact on the company.<\/p>\n
This lawsuit came just a month after U.S. Health Secretary Robert F. Kennedy Jr. announced plans to change drug labels to warn pregnant women against taking Tylenol, or its generic, acetaminophen. While some large studies have shown a correlation between taking Tylenol and having a child with autism, others that look more closely at genetic factors or sibling outcomes have repudiated those findings.<\/p>\n
The day after Paxton filed his lawsuit, Kennedy walked back some of his and President Donald Trump\u2019s more definitive statements, saying the evidence on Tylenol \u201cis not sufficient to say it definitely causes autism. But it\u2019s very suggestive.\u201d He recommended that women consult with their physicians to decide which medications to take.<\/p>\n
But that has not slowed the crusade for Paxton, who is running to unseat U.S. Sen. John Cornyn in next year\u2019s Republican primary.<\/p>\n
\u201cI will not allow Big Pharma to ruin the lives of Texans with their lies and then refuse to pay the bill when it\u2019s brought to account,\u201d Paxton said in a statement when he filed his motion to stop the payment.<\/p>\n
The filing also asked the judge to stop Kenvue from airing advertisements that claim Tylenol is safe to consume while pregnant.<\/p>\n
Kenvue\u2019s stock has fallen 30% since Trump and Kennedy\u2019s comments, and the company is currently in negotiations for consumer products giant Kimberly-Clark to acquire it for $40 billion, a relative discount for the slate of products it oversees.<\/p>\n
A ruling that barred the company from paying dividends to shareholders was expected to plummet its stock price even further, potentially encouraging the company to settle the lawsuit, said James Spindler, a corporate law professor at the University of Texas at Austin.<\/p>\n
\u201cThis would put a lot of pain on the company in the short term,\u201d Spindler said. \u201cThe only real reason to own [stock in a] corporation is because it pays dividends, and if it can\u2019t pay dividends, no one would ever want to buy it.\u201d<\/p>\n
This aggressive push against a major multinational corporation stands at odds with Texas GOP leaders\u2019 push to lure more businesses to the state through promises of a friendly legal climate for businesses. In 2023, the Legislature created specialized business courts to offer \u201cpredictability and certainty\u201d to corporations, as Gov. Greg Abbott put it.<\/p>\n
This case happened in a local court, although litigation to enable the company to pay its shareholders their dividends might have fallen under a business court jurisdiction. But it\u2019s easy to see why Paxton\u2019s office, at least, would like to keep this in the local courts, Spindler said.<\/p>\n
Dozens of people have filed personal injury lawsuits against Johnson and Johnson, and its corporate spin-off, Kenvue, alleging adverse neurodevelopment outcomes for their children after taking Tylenol while pregnant.<\/p>\n
Ashley Keller, a private attorney the state hired to handle this case, previously said in a statement that he had hoped Rafferty would \u201csee through Kenvue\u2019s smokescreen and grant our injunction.\u201d<\/p>\n
Keller is also overseeing dozens of consolidated lawsuits against Kenvue and its parent company, Johnson and Johnson, brought by parents who believe their child\u2019s autism was caused by Tylenol.<\/p>\n
This article first appeared on The Texas Tribune.<\/p>\n","protected":false},"excerpt":{"rendered":"
THE TEXAS TRIBUNE \u2013 A judge in Panola County won\u2019t block the maker of Tylenol from distributing $400 million of dividends to its shareholders amid Texas Attorney General Ken Paxton\u2019s lawsuit against the company. Kenvue, the company that makes Tylenol, will proceed with issuing the payment on Nov. 26, according to reporting from Reuters. \u201cThat … Continue reading ETX judge denies request to block Tylenol dividends<\/span><\/a><\/p>\n","protected":false},"author":3,"featured_media":1458656,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"fifu_image_url":"https:\/\/ktbb.com\/post\/wp-content\/media\/2025\/11\/2025-11-15_155338-200x200.jpg","fifu_image_alt":"","footnotes":""},"categories":[177],"tags":[],"class_list":["post-1458341","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-local-news-archive-archives"],"publishpress_future_action":{"enabled":false,"date":"2026-06-07 14:19:03","action":"change-status","newStatus":"trash","terms":[],"taxonomy":"category","extraData":[]},"publishpress_future_workflow_manual_trigger":{"enabledWorkflows":[]},"fifu_image_url":"https:\/\/ktbb.com\/post\/wp-content\/media\/2025\/11\/2025-11-15_155338-200x200.jpg","_links":{"self":[{"href":"https:\/\/ktbb.com\/post\/index.php?rest_route=\/wp\/v2\/posts\/1458341","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/ktbb.com\/post\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/ktbb.com\/post\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/ktbb.com\/post\/index.php?rest_route=\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/ktbb.com\/post\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=1458341"}],"version-history":[{"count":8,"href":"https:\/\/ktbb.com\/post\/index.php?rest_route=\/wp\/v2\/posts\/1458341\/revisions"}],"predecessor-version":[{"id":1458685,"href":"https:\/\/ktbb.com\/post\/index.php?rest_route=\/wp\/v2\/posts\/1458341\/revisions\/1458685"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/ktbb.com\/post\/index.php?rest_route=\/wp\/v2\/media\/1458656"}],"wp:attachment":[{"href":"https:\/\/ktbb.com\/post\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=1458341"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/ktbb.com\/post\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=1458341"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/ktbb.com\/post\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=1458341"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}