CARTHAGE, Texas (Reuters) -A Texas judge cleared the way for Kenvue to pay a $398 million shareholder dividend this month, a win for the U.S. consumer health company in a politically-charged legal battle over the safety of using Tylenol during pregnancy.

Texas Attorney General Ken 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 autism and other risks to children when pregnant women use Tylenol.

The lawsuit asked for an order blocking Kenvue from paying the November 26 dividend to preserve money for litigation claims and to refrain from marketing Tylenol as safe for pregnant women.

Judge LeAnn Rafferty concluded that she did not have jurisdiction over the dividend claim, according to a one-page order issued Friday afternoon.

The decision indicated an unwillingness by a local court to wade into issues fundamental to a multinational company's business model.

Rafferty, a judge in Panola County, Texas, near the Louisiana border, also rejected a request to temporarily order Kenvue to modify its marketing. Paxton's lawsuit had repeated the scientifically unproven claim that using the popular medication during pregnancy can cause autism.

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.

Paxton has aligned himself with Trump's agenda and is challenging incumbent U.S. Senator John Cornyn in next year's Republican primary.

Republicans traditionally have presented themselves as proponents of smaller government, which was less likely to interfere in the decisions of businesses and consumers. That stance has shifted somewhat during the Trump era, with Republicans wading more aggressively and regularly into decisions on health and tariffs, for instance.

KENVUE CAN MOVE FORWARD WITH DIVIDEND

Kim Bueno, a lawyer for Kenvue, said in an interview following the hearing that 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.

Texas also sued Johnson & Johnson over issues related to the 2023 spinoff of Kenvue.

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.

J.J. Snidow, an attorney representing the state, 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.