Labor & Employment

Whistleblower Leads to Shutdown of Infosys’ Alleged System for Avoiding California Taxes

  • California AG Xavier Becerra reached a settlement with India-based business consulting and outsourcing services company Infosys Limited and its subsidiary to resolve allegations stemming from a whistleblower’s qui tam lawsuit of visa misclassification and tax avoidance in violation of the California False Claims Act and Unfair Competition Law.
  • According to the AG’s office, Infosys allegedly misclassified its sponsored visas as B-1 rather than H-1B visas for approximately 500 employees between 2006 and 2017, and avoided California payroll taxes and the requirement to pay workers at the local prevailing wage through this misclassification.
  • Under the terms of the settlement, Infosys agreed to pay $800,000 to the State of California and $95,000 for the whistleblower’s attorney’s fees and expenses.

State AGs in the News

‘Tis the Season for Attorneys General Association Elections and Awards

  • Montana AG Tim Fox was elected President of the National Association of Attorneys General (“NAAG”) for 2020, replacing outgoing NAAG President Louisiana AG Jeff Landry. AG Fox selected “Transformational Leadership and Civility” as his presidential initiative.
  • Kansas AG Derek Schmidt received the annual Kelley-Wyman Award, NAAG’s highest honor, which is awarded for doing the most to achieve NAAG objectives.
  • The new president’s election and the award ceremony were part of NAAG’s annual Capital Forum, held December 9-11 in Washington, D.C.

2020 AG Elections

State Delegate Isaac Sponaugle Announces Bid for Democratic Nomination for West Virginia Attorney General

  • Isaac Sponaugle, a member of West Virginia’s House of Delegates, declared his candidacy for the Democratic nomination for West Virginia AG in 2020.
  • Sponaugle, an attorney from Pendleton County, stated that he will not run for reelection to the House of Delegates, where he currently serves as Assistant Minority Whip.
  • As previously reported, private-practice attorney Samuel Petsonk is also seeking the Democratic nomination for AG, and Republican incumbent AG Patrick Morrisey has not formally announced whether he is seeking reelection.

Consumer Protection

Phantom Debts Result in Real Liability for Allegedly Crooked Debt Collectors

  • The Federal Trade Commission (“FTC”) reached a settlement with debt collection company Global Asset Financial Services Group, LLC and related individuals (collectively “GAFS”) to resolve allegations of using illicit debt collection tactics in violation of the FTC Act.
  • The FTC’s complaint alleged that GAFS pressured consumers into making payments on phantom debts by threatening to take legal action in the case of non-payment while pretending to be attorneys, using harassing robocalls, and placing threatening calls to victims’ friends and family.
  • Under the terms of the settlement, GAFS is banned from debt collection, debt brokering activities, credit repair activities, misleading consumers, and impersonating attorneys. The settlement also includes monetary judgments of approximately $25.5 million, all but $3.1 million of which are suspended due to the defendants’ inability to pay.

New York Attorney General Wins $16 Million Court Decision Over Fraudulent Magazine Subscription Solicitations

  • New York AG Letitia James won a lawsuit against marketing company Orbital Publishing Group, Inc. and related companies (collectively “Orbital Publishing”) in the New York State Supreme Court over allegedly fraudulent mailings of unauthorized subscription notices in violation of New York’s consumer protection law, which prohibits deceptive business practices and false advertising, and which also requires magazine renewal solicitations to disclose the month and year that the consumer’s subscription expires.
  • The complaint, filed by former AG Eric Schneiderman as part of a multistate law enforcement effort, alleged that Orbital Publishing sent out millions of magazine and newspaper subscription solicitations nationwide for well-known publications such as The Wall Street Journal, the New York Times, and National Geographic—without the publications’ permission—quoting inflated subscription prices while claiming that the offer was for one of the lowest subscription prices available, and pocketed the difference between the inflated price and the actual subscription price set by the publications. Consumers also found it virtually impossible to cancel their subscriptions.
  • The Court awarded the AG’s office more than $16 million in restitution and penalties, and permanently enjoined Orbital Publishing from engaging in the misleading practices described in the complaint.

Pharmaceuticals

There’s No Daylight Among Attorneys General When It Comes to Their Opinions About Fentanyl

  • In a rare show of unanimity, all 56 AGs from every state, territory, and the District of Columbia, led by Michigan AG Dana Nessel and Ohio AG Dave Yost, sent a letter to the Senate Committee on the Judiciary in support of the Federal Initiative to Guarantee Health by Targeting (FIGHT) Fentanyl Act, which seeks to permanently classify fentanyl and related compounds as Schedule I drugs—defined as drugs with no currently accepted medical use and possess a high potential for abuse.
  • In the letter, the AGs opine that the FIGHT Fentanyl Act is crucial to efforts to curb the opioid epidemic and note that approximately 40% of the 72,000 drug-related deaths in 2017 in the United States involved fentanyl or fentanyl-related substances.
  • The AGs’ bipartisan letter articulates an official position adopted by NAAG and was sent on NAAG letterhead.