The Justice Department's dropping of the charges against FedEx

|The Volokh Conspiracy |

Cristina Arguedas; photo by Jason Doiy.
Cristina Arguedas (Photo by Jason Doiy)

I haven't been following this case closely, but it appears to be a huge win for defense lawyer Cristina Arguedas, whom I don't know personally but who I thought deserved congratulations. An excerpt from the AP story:

A criminal trial nearly two years in the making alleging FedEx knowingly delivered illegal prescription drugs to dealers and addicts ended suddenly Friday when prosecutors moved to dismiss all charges against the shipping giant….

Prosecutors claimed Memphis, Tennessee-based FedEx began conspiring with two internet pharmacy organizations in the early 2000s to ship powerful sleep aids, sedatives, painkillers and other drugs to customers who had not been physically examined by a doctor….

FedEx attorney Cristina Arguedas said the company did not reach any monetary settlement with the government in exchange for ending the case….

Courthouse News adds:

The government's motion comes after a day of blistering opening statements and two days of initial brief testimony involving a D.E.A. agent and a FedEx employee in its credit department, where Arguedas shredded the government's theory that FedEx knowingly and intentionally delivered millions of packages containing prescription drugs that had not been properly prescribed, in many cases to known drug addicts.

But FedEx had not conspired with the Internet pharmacies, Arguedas argued. In fact, it had actually helped the Drug Enforcement Administration in its investigation into the growing problem of shady Internet pill mills.

And from The Recorder:

In one impactful moment, Arguedas brought up an internal FedEx email that Hemann had presented during his own opening statement. The email had the seemingly callous subject line "here goes another one" and included video of a DEA bust of two online pharmacies.

What the prosecutor failed to note, Arguedas said, was that FedEx's internal security division had assisted the agency on the bust. Indeed, she said, the company had reached out to state law enforcement in Florida a year before the raid to report suspicious activity at one of the pharmacies.

"We called the cops," she said.

Impressive work on Arguedas's part. And here is the statement that Judge Breyer read from the bench when approving the dismissal (some paragraph breaks added):

I am deeply concerned with the tragic consequences caused by the sale of controlled substances to individuals, including children, who have not had an in-person and direct consultation with a licensed physician. It is my hope that the convictions in previous cases and imprisonment of those participants has discouraged others from engaging in this process.

The prosecution of FedEx, however, is entirely different. The Court has been asked to determine whether the defendant should be held criminally liable as a co-conspirator. As a result of the detailed opening statements by both the Government and Defense and accepting the factual assertions as uncontested, the Court concludes that the defendants are factually innocent. They did not have criminal intent.

To the contrary, they offered to and did cooperate with the Government during the course of its investigation. As FedEx said to the DEA from the inception of this alleged conspiracy and repeated over time, "Simply identify a particular customer who is shipping illegal substances, and we will not pick up or deliver his packages." DEA was either unwilling or incapable of providing that information to FedEx. Rather, the Government decided to bring this novel prosecution.

While the Court is critical of the decision to prosecute, it wishes to commend Government counsel, especially John Hemann, who was not part of the original decision to prosecute and who now seeks dismissal of these charges.

The dismissal is an act, in the Court's view, entirely consistent with the Government's overarching obligation to seek justice even at the expense of some embarrassment.

I also wish to acknowledge the professionalism and exceptional competence of Ms. Arguedas, Mr. Ruby, the entire Defense team; and I want to specially commend the manner in which all parties in this case presented their views. It was competent. It was professional. It made the Court's task much easier because it focused on the issues that were really germane, and that can only be achieved when attorneys step back from the fray and analyze the issues and address the issues as they have done in this case. It was exceptional. I've never had an experience like this in 20 years, and I deeply appreciate the efforts made by the Government and Defense counsel to bring that about.