FedEx says it can’t face charges for illegal drug shipments
By Ross Todd, From The Recorder
SAN FRANCISCO — FedEx Corp. has taken its first swing at knocking out a federal criminal case alleging it shipped drugs for illegal Internet pharmacies.
FedEx’s lawyers at Arguedas, Cassman & Headley and Skadden, Arps, Slate, Meagher & Flom argued in a court filing Wednesday that in its role as a common carrier the company is shielded under federal law from the government’s claims. FedEx’s motion to dismiss also claims the government’s charges amount to a violation of the company’s Fifth Amendment right to fair warning that its conduct ran afoul of the law.
FedEx pleaded not guilty last year to government allegations that it willfully broke the law by shipping drugs for two Internet pharmacy networks which allowed customers simply to fill out an online questionnaire to receive a prescription without a face-to-face meeting with a physician. FedEx rival United Parcel Services Inc. agreed to forfeit $40 million in 2013 as part of a nonprosecution agreement with the U.S. Attorney’s office for the Northern District of California to avoid similar charges.
FedEx’s case, however, dwarfs that of UPS. The superseding indictment against FedEx filed in August claims the company’s drug shipments generated $820 million in gross gains, a figure that could be doubled under federal law.
FedEx’s lawyers, headed up by Arguedas Cassman’s Cristina Arguedas and Skadden’s Allen Ruby, claim in Wednesday’s filing that evidence at trial would show the company didn’t act with the knowledge or intent required for a conviction. But trial isn’t necessary, they maintain, since as a common carrier FedEx is shielded from the government’s charges by the Controlled Substances Act and the Food, Drug and Cosmetic Act.
“Common carriers, as transporters for the public at large, cannot reasonably be expected to police whether any of the millions of packages tendered for shipment each day encloses a commodity that might somehow violate one among the thicket of federal, state and local laws and regulations that might apply to the shipment or shipper—including the complicated rules that apply to the prescription and dispensation of medications,” they write.
Since FedEx was operating under the assumption that its actions fell within the exemptions available to common carriers, they argue the charges violate FedEx’s Fifth Amendment rights.
“Even if this court were to interpret the exemptions in such a way as to permit criminal liability, retroactive application of that interpretation to FedEx’s conduct would violate due process,” they write.
In a separate motion filed on Wednesday, the company’s lawyers sought to subpoena records from various law enforcement agencies—including the FBI, U.S. Customs and Border Protection and the U.S. Postal Inspection Service—that contacted FedEx during investigations of online pharmacies.
Arguments on FedEx’s motions are scheduled for May 13 before U.S. District Judge Charles Breyer.
