It\u2019s an \u201cextraordinary request,\u201d the state\u2019s lawyers acknowledge, and one that legal experts say is extremely uncommon at such an early stage in a lawsuit. <\/p>\n
The state of Texas last month sued Kenvue<\/a>, the company that makes Tylenol, 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 say Paxton\u2019s allegation overstates the unsettled science surrounding a possible link between autism and Tylenol. <\/p>\n In a new filing Thursday, Paxton argued the company may need that $400 million to pay out its legal liabilities if the state wins its case. <\/p>\n Corporations typically have wide authority over how they handle their shareholder dividends, and state intervention is rare. But Texas is bringing 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 lawsuit against Kenvue was just filed last week. The judge has not yet scheduled a preliminary hearing on the case, let alone ruled on if and how much the company may have to pay. <\/p>\n \u201cPresumably, there hasn’t been a huge amount of evidence marshalled about this, so it would be relatively difficult to spitball whether the plaintiff is likely to win,\u201d said James Spindler, a corporate law professor at the University of Texas at Austin. \u201cIt would also be relatively difficult to spitball whether the company is going to be insolvent if it makes its payment.\u201d<\/p>\n A spokesperson for Kenvue said 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 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<\/a>, 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<\/a> 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. <\/p>\n The filing also asks 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 percent since Trump and Kennedy\u2019s comments, and the company is currently in negotiations with consumer products giant Kimberly-Clark to acquire the company for $40 billion, a relative discount<\/a> for the slate of products it oversees. <\/p>\n If the company is barred from paying dividends to shareholders, the stock price is expected to plummet even further, potentially encouraging the company to settle the lawsuit, Spindler said. <\/p>\n \u201cThis would put a lot of pain on the company in the short term,\u201d he said. \u201cThe only real reason to own [stock in a] corporation is because it pays dividends, and if it can’t 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<\/a>. <\/p>\n This case likely wouldn\u2019t fall under the business court jurisdiction, although litigation to enable the company to pay its shareholders their dividends might. 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 \u201cIf you have a sympathetic type of claim, or a scandalous type of claim, getting them in front of a jury might be a good goal,\u201d he said. \u201cYou\u2019re looking at possibly huge findings of damages if you\u2019re able to get this before a jury, and the business courts might be more likely to dismiss cases or to take matters away from the jury.\u201d <\/p>\n Paxton\u2019s office filed this suit in Panola County, a county of about 22,000 people on the border with Louisiana. Trump won the county by 67 points in 2024. The case will be heard by the county\u2019s sole judge, LeAnn Rafferty, a Republican who has been on the bench since 2016. <\/p>\n Ashley Keller, a private attorney the state hired to handle this case, said in a statement that he is hopeful Rafferty will \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 There has not yet been a hearing scheduled on Paxton\u2019s latest filing, although Keller said they have requested an expedited timeline. <\/p>\n Disclosure: University of Texas at Austin has been a financial supporter of The Texas Tribune, a nonprofit, nonpartisan news organization that is funded in part by donations from members, foundations and corporate sponsors. Financial supporters play no role in the Tribune’s journalism. Find a complete\u00a0list of them here<\/a>.<\/p>\n This article<\/a> first appeared on The Texas Tribune<\/a>.![](\"https:\/\/www.newsbeep.com\/il\/wp-content\/uploads\/2025\/11\/cropped-cropped-texas-tribune-favicon.png\")
<\/p>\n <\/p>\n","protected":false},"excerpt":{"rendered":"by Eleanor Klibanoff, The Texas Tribune November 6, 2025 Texas Attorney General Ken Paxton is asking a judge…\n","protected":false},"author":2,"featured_media":119929,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[33],"tags":[163,85,46,482],"class_list":{"0":"post-119928","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-medication","8":"tag-health","9":"tag-il","10":"tag-israel","11":"tag-medication"},"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/posts\/119928","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/comments?post=119928"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/posts\/119928\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/media\/119929"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/media?parent=119928"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/categories?post=119928"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/tags?post=119928"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}