FedEx says lawsuits over illegal drug shipments dropped

A federal lawsuit against FedEx accusing the company of knowingly delivering illegal pharmaceuticals has been dropped.

The lawsuit - brought by the federal government - claimed that FedEx shipped illegal medicines from rogue online pharmacies for more than a decade despite knowing that the shipments were illegal and the websites were under scrutiny by the US Drug Enforcement Administration (DEA).

Federal prosecutors told the court in a trial that got underway last week that they have evidence in the form of internal email correspondence showing FedEx' involvement in shipping illegally prescribed drugs.

On Friday however the Department of Justice agreed to dismiss all remaining charges in the case against FedEx and its subsidiaries.

"FedEx is and has always been innocent," commented Patrick Fitzgerald, the company's senior vice president, marketing and communications. "The case should never have been brought. The government should take a very hard look at how they made the tremendously poor decision to file these charges."

Most of the charges against FedEx were dismissed in March on a technicality, namely that the government had committed a blunder by naming the wrong defendant in a key pre-trial document, so the latest verdict is a major victory for the logistics group.

Federal prosecutors had accused FedEx's lawyers of gamesmanship in only revealing the error after the statute of limitations period had passed.

FedEx has always argued that as a transportation company that ships goods for the general public it was protected from secondary liability as it was unreasonable to expect it to take responsibility for checking the 10m packages it handles every day.

"Many companies would not have had the courage or the resources to defend themselves against false charges," said Fitzgerald.

"The power of the government was greatly misused when the case was initiated, but the government’s integrity was redeemed by the decision to dismiss the charges," he added.

Two years ago, UPS agreed to forfeit $40m to settle charges it shipped drugs from illegal online pharmacies rather than take on the government in a federal lawsuit.