Texas Attorney General Ken Paxton has filed a motion to block pharmaceutical company Kenvue—the manufacturer of Tylenol—from issuing a scheduled dividend payment later this month. The move comes as the state pursues a high-profile lawsuit against Kenvue and its former parent company, Johnson & Johnson, alleging deceptive marketing practices tied to the use of Tylenol during pregnancy.
The dividend, set for distribution on November 26, has become the latest flashpoint in a widening legal battle between Texas and the pharmaceutical industry. In his filing, Paxton argued that allowing the payout could significantly deplete the company’s resources, potentially preventing the state from collecting any financial penalties should the court rule against Kenvue. “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 said in a statement.
At the heart of the lawsuit are claims that Kenvue and Johnson & Johnson misled consumers—specifically pregnant women—about potential developmental risks associated with acetaminophen, the active ingredient in Tylenol. The complaint alleges that the companies continued to market the product as safe for use during pregnancy despite studies suggesting links between prenatal exposure to acetaminophen and an increased likelihood of children developing autism spectrum disorder (ASD) or attention-deficit/hyperactivity disorder (ADHD).
Paxton’s office has also accused Johnson & Johnson of structuring Kenvue’s corporate spinoff in a way that could shield the parent company from legal and financial responsibility for such claims. The attorney general contends that the separation was designed to isolate liabilities related to long-standing consumer products like Tylenol, while Johnson & Johnson retained stronger financial stability.
“Kenvue should no longer pay fraudulent dividends as a way to avoid paying future civil penalties,” Paxton said. He is asking the court to issue an injunction prohibiting Kenvue from making any dividend distributions or large asset transfers until a final ruling in the case. The attorney general’s filing warns that the dividend, if approved, could leave the company insolvent should it be found liable for damages that could reach into the billions.
The state’s motion also seeks to halt what it calls “ongoing deceptive marketing practices” by Kenvue. Paxton’s office alleges that despite the growing body of research into potential risks associated with acetaminophen use during pregnancy, the company continues to market Tylenol in ways that downplay or ignore those concerns. The requested injunction would compel Kenvue to revise or suspend its advertising until the lawsuit’s claims are resolved.
This lawsuit is part of a broader wave of legal challenges facing manufacturers of acetaminophen products across the country. In recent years, thousands of families have filed similar claims in federal courts, asserting that drugmakers failed to warn consumers about potential developmental risks. Kenvue and Johnson & Johnson have consistently denied the allegations, citing decades of medical evidence supporting acetaminophen’s safety when used as directed and approved by the U.S. Food and Drug Administration.
Paxton, however, insists that the companies prioritized profit over public safety. “This case is about accountability,” he said. “Texans deserve to know that corporations cannot mislead consumers, harm families, and then shield their assets to escape justice.”
Legal experts note that if the Texas court grants Paxton’s injunction, it could set a precedent for other state-level actions targeting corporate dividend payments in the midst of consumer protection lawsuits. Such a ruling could also pressure pharmaceutical companies to reconsider financial moves made while facing pending litigation.
Kenvue, which officially separated from Johnson & Johnson earlier this year, has positioned itself as an independent consumer health company, overseeing brands like Tylenol, Band-Aid, and Listerine. However, the lingering legal exposure from legacy Johnson & Johnson products has complicated its first year of operations as a standalone entity.
The Texas attorney general’s case adds another layer of scrutiny to that transition. Paxton’s office has framed the motion not only as a legal maneuver but also as a moral stance—emphasizing the state’s duty to protect consumers and ensure companies are held accountable for alleged deception.
“The health of Texans, especially expectant mothers, must never take a back seat to corporate greed,” Paxton said. “We will pursue every measure to ensure justice is done and that no company can escape responsibility by hiding behind a new name or structure.”
The case remains pending in state court, with hearings expected in the coming weeks. The outcome could have significant implications for corporate liability, pharmaceutical transparency, and the financial strategies of major consumer health companies navigating litigation risks.
