Pubdate: Fri, 15 May 2015
Source: San Diego Union Tribune (CA)
Copyright: 2015 Union-Tribune Publishing Co.
Contact:  http://www.utsandiego.com/
Details: http://www.mapinc.org/media/386
Note: Seldom prints LTEs from outside it's circulation area.

FEDEX CAN'T GET OUT OF DRUG CASE

Judge rejects claim it can't be liable for shipping contraband

FedEx's claim it can't be prosecuted for contraband in its 4 million 
daily deliveries was rejected by a judge who allowed a case to go 
ahead over charges it conspired with "rogue" online drugstores to 
deliver illegal prescription drugs to dealers and addicts.

U.S. District Judge Charles Breyer in San Francisco on Thursday 
rejected the company's bid for dismissal of the case, in which the 
government may seek almost $1 billion in fines.

Breyer said the acts alleged by prosecutors do not fall under an 
exemption in federal drug law for transportation companies such as FedEx.

FedEx had argued that the exemption allowed it and other so-called 
common carriers to legally possess drugs in the normal course of its 
business. The Memphis, Tenn.-based shipping giant says it cannot 
reasonably be expected to police the millions of packages it ships each day.

Breyer, however, said FedEx is accused of engaging in a conspiracy to 
distribute illegal drugs, which isn't covered by the exemption. If 
that behavior were covered, what would stop a drug dealer from 
becoming a common carrier to distribute drugs without fear of 
prosecution, he asked FedEx's attorney. "It's not that it's an uphill 
battle," the judge said of the argument FedEx was making. "It's an 
impossible battle."

Separately, Breyer ordered the FBI and other agencies to turn over 
communications that FedEx says show it has long cooperated with the 
government's crackdown on companies that are shipping drugs without 
proper prescriptions. As a drug-trafficking and money-laundering case 
heads toward trial, the parcel-shipping service is trying to show 
it's being punished after doing the right thing.

The company said as far back as 2002, 12 years before it was accused 
of scheming with "rogue" online drugstores to deliver controlled 
substances to dealers and addicts, it was assisting federal agencies 
with investigations of pill purveyors. FedEx helped the government 
win convictions of the very companies the shipper is accused of 
conspiring with, defense lawyer Cris Arguedas said in court Thursday.

Prosecutors have charged FedEx with multiple drug counts alleging it 
conspired with two online pharmacies to ship powerful sleep aids, 
sedatives, painkillers and other drugs to customers it knew lacked 
valid prescriptions. FedEx has pleaded not guilty.

Breyer noted the case was unusual for the government's decision to 
bring criminal charges. Rival UPS paid $40 million in 2013 to resolve 
similar allegations that arose from a nearly decade-long crackdown on 
Internet pharmacies that ship prescription drugs to customers lacking 
medical clearance.

- - BLOOMBERG NEWS & AP
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