Texas Attorney General Ken Paxton is taking aim at Tylenol manufacturer Kenvue, seeking to block the company from paying dividends that he claims would deprive Texans of compensation for alleged harm caused by the popular pain reliever.
In a bold legal maneuver filed this week, Paxton asked a judge to prevent Kenvue from making its scheduled November 26 dividend payment, arguing the company is attempting to drain its coffers before facing potential penalties over misleading marketing of Tylenol to pregnant women. The lawsuit alleges the company knew acetaminophen increases the risk of autism and ADHD in children exposed during pregnancy but marketed the drug as safe anyway.
“I will not allow Big Pharma to ruin the lives of Texans with their lies and then refuse to pay the bill when it’s brought to account,” Paxton declared in a statement announcing the action. “Kenvue very well may be insolvent because of its own reckless actions, and it should no longer pay fraudulent dividends as a way to avoid paying future civil penalties.”
Corporate Shell Game?
The case isn’t just about Tylenol’s safety. Paxton’s lawsuit also targets Johnson & Johnson, claiming the healthcare giant’s recent spinoff of its consumer health division into Kenvue was a calculated move to dodge financial responsibility for potential damages. The attorney general contends the separation was an “illegal corporate spinoff that was designed to evade financial responsibility.”
At stake are potentially billions of dollars in civil penalties if Kenvue is found liable for what Paxton describes as “deeply unethical and unlawful behavior.” His motion seeks to prevent the company from paying any dividends or transferring assets until the case reaches final judgment.
The legal strategy reflects growing concern that corporations might use financial engineering to shield themselves from accountability. By stopping dividend payments now, Paxton aims to ensure Kenvue maintains sufficient capital to pay damages later — assuming the state prevails in court.
Broader Marketing Concerns
Beyond the dividend issue, Texas is seeking a broader injunction to halt what it calls Kenvue’s “illegal and misleading marketing practices” regarding Tylenol’s safety for pregnant women and children. The state alleges that the company’s combined legal exposure “totals billions of dollars” related to its marketing of acetaminophen products.
What makes this case particularly significant? Tylenol has long been considered among the safest pain relievers for pregnant women, often recommended by doctors as an alternative to ibuprofen and aspirin. If the allegations prove true, generations of women may have unknowingly exposed their developing children to increased risks of neurodevelopmental disorders.
Paxton has promised an aggressive pursuit of the case. “I will be relentless in working to secure a just outcome when companies hurt our citizens,” he stated, “and part of that process is ensuring that companies actually pay Texas when they break the law.”
Neither Kenvue nor Johnson & Johnson have publicly responded to the motion as of press time. The court has not yet ruled on Paxton’s request to block the November dividend payment.
