Charges dropped against FedEx in rogue pharmacy case

A federal judge has dismissed a sizeable chunk of the charges in a lawsuit against FedEx alleging that it knowingly shipped illegal pharmaceuticals.

The lawsuit - which centres on an indictment of FedEx by the federal authorities in 2014 - charged the shipping company with conspiracy to traffic in controlled substances and misbranded pharmaceuticals from rogue pharmacies operating outside the law.

In the latest chapter in the legal dispute, US District Court Judge Charles Breyer dismissed most of the charges against the company on a technicality, namely that the government had committed a blunder by naming the wrong defendant in a key pre-trial document.

Specifically, the US attorney's office and FedEx's defense lawyers had signed written agreements to defer legal deadlines in order to discuss a possible settlement. However, the documents erroneously named a FedEx subsidiary in place of the parent company and, as a result, the charges were filed past the statute of limitations.

According to the original indictment, from 2004 federal agencies informed FedEx that rogue pharmacies were using its shipping services to distribute illegal pharmaceutical products. It was also charged with conspiring with Internet pharmacy organizations to distribute drugs to customers without prescriptions.

While acknowledging the error, federal prosecutors accused FedEx's lawyers of gamesmanship in only revealing the error after the statute of limitations period had passed. Judge Breyer was however unswayed by their position, dismissing 14 of 18 charges against the company.

However, charges remain pending against subsidiary FedEx Express and parent FedEx Corp still faces some charges of conspiring with rogue pharmacies.

For its part, FedEx continues to insist that it is innocent of all charges and has been trying to cooperate with the US government in enforcing the law against illegal online distribution of medicines and controlled substances.

This is thought to be the first criminal case in the US focusing on shipping of illegal drugs by a third-party logistics company. However, in 2011, Google agreed to pay $500m to settle allegations by the Justice Department that it had profited from ads for illegal online pharmacies.