By Sheila Dang, Jonathan Stempel and Tom Hals CARTHAGE, Texas (Reuters) -A Texas judge won't block Kenvue from paying its scheduled $398 million shareholder dividend on November 26, rejecting a request by state Attorney General Ken Paxton, lawyers for the consumer health company and state told Reuters on Friday. Paxton, a Republican who is running for a U.S. Senate seat in 2026, sued Summit, New Jersey-based Kenvue on October 28, accusing it of concealing the risks to children when pregnant women use Tylenol. The lawsuit asked state Judge LeAnn Rafferty to block Kenvue from paying the dividend and to refrain from marketing Tylenol as safe for pregnant women. Rafferty indicated during the hearing in the Panola County courthouse in Carthage, Texas, near the Louisiana border, that she would likely issue a ruling on the marketing request on Friday afternoon. The lawsuit was filed five weeks after Republican President Donald Trump and U.S. Health and Human Services Secretary Robert F. Kennedy Jr. repeated the scientifically unproven claim that using the popular medication during pregnancy can cause autism. In September, the U.S. Food and Drug Administration told doctors to alert patients to what it said was growing evidence suggesting Tylenol use during pregnancy has a link to autism. Medical societies dispute a Tylenol link to autism. The agency is considering new labels for Tylenol and its generic versions. Kenvue repeatedly has said Tylenol is safe. It is unusual for a local court, applying state law, to exercise power over issues fundamental to a multinational company's business model, including its ability to communicate with the public and pay shareholders. Republicans have traditionally presented themselves as proponents of smaller governments that were less likely to interfere in the decisions of businesses and consumers. That stance has shifted somewhat during the Trump era, with Republican officials wading more aggressively and regularly into decisions on health and tariffs, for instance. KENVUE CAN MOVE FORWARD WITH DIVIDEND Rafferty dismissed the claims related to the payment of the dividend, Kim Bueno, a lawyer for Kenvue, said in an interview following the hearing. Bueno said the problem with Texas trying to block Kenvue's dividend is that the company is based in New Jersey and incorporated in Delaware. "There was no jurisdiction to challenge that," she said. When asked if Kenvue would move forward with issuing the dividend, Bueno said "Yes, absolutely, as they should. That is a distribution that's being made as part of the normal course of business." Paxton's office did not immediately respond to a request for comment. J.J. Snidow, an attorney representing the state, confirmed to Reuters that the judge decided she did not have jurisdiction over the dividend issue. Texas also sued Johnson & Johnson over issues related to its 2023 spinoff of Kenvue, including Tylenol. Concerns about the drug have been an overhang for Kimberly-Clark's planned $40 billion takeover of Kenvue, which was announced six days after Paxton sued. That merger would let the maker of Kleenex and Huggies diapers expand into higher-margin categories such as skin care and pain relief, by acquiring Kenvue brands including Band-Aid, Johnson's Baby Shampoo, Listerine and Neutrogena. Snidow said protecting public health justified temporary limits on what Kenvue could say about Tylenol, citing scientific studies that he said backed a link between using the painkiller during pregnancy and autism. Bueno disputed there was any science supporting such a link, adding that the FDA rather than judges should review the matter. (Reporting by Jonathan Stempel and Sheila Dang; Additional reporting by Patrick Wingrove in New York and Tom Hals in Wilmington, Delaware; Editing by Noeleen Walder, Caroline Humer and Paul Simao) (The article has been published through a syndicated feed. Except for the headline, the content has been published verbatim. Liability lies with original publisher.)
