Monday, August 4, 2014

FedEx defies the feds, fights Internet pharmacy indictment

Trucker or Cop?

That’s the question FedEx is asking in a legal battle with the U.S. Department of Justice. Charged by the feds in a criminal indictment with knowingly delivering prescription drugs from illegal Internet pharmacies, FedEx issued a defiant public statement in July:

“We want to be clear what’s at stake here: The government is suggesting that FedEx assume criminal responsibility for the legality of the contents of the millions of packages that we pick up and deliver every day. We are a transportation company – we are not law enforcement. We have no interest in violating the privacy of our customers.”

With a not-guilty plea in court last week, FedEx signaled a public fight based not on the specifics of the indictment, but on legal philosophy.

Comments on The Wall Street Journal website picked up on a conservative issue here. “Statism is the (government’s) goal,” wrote one reader of the FedEx indictment. “Control of everything that makes America free. If your neighbor is breaking the law, it is your responsibility to turn them in.”

The conservative Washington Times came out squarely in support of FedEx. “With millions of other Americans, we’re rooting for FedEx on its day in court,” the paper said.

Millions is an overstatement at this point. The FedEx case has yet to make waves in the general media. Maybe it will, maybe it won’t. Either way, FedEx has a point.

How responsible are carriers – or individual drivers for that matter – for the shipments in their trucks? Are they obligated to inform on customers they even suspect of illegal activity?

Last year, as part of the same war on illegal Internet pharmacies UPS decided not to fight the feds. The company accepted a $40 million fine and agreed to work with Drug Enforcement Agency and the Food and Drug Administration against the Internet pharmacies. Some conservatives in the WSJ site claim the company “caved.”

UPS is hardly alone. In another, similar controversy federal authorities also forced cooperation from Internet service providers, major corporations like Verizon and Comcast.

The issue is very similar: the feds wanted these companies to inform on customers who download illegal music, movies, and TV shows. The service providers negotiated a nuanced deal with the government allowing a series of warnings before an illegal downloader is denied Internet service altogether. But ultimately, that’s what will happen.

So in the end, Verizon, Comcast, et al, are in the law enforcement business – like it or not. This settlement cannot be a good precedent for FedEx.

A couple of questions: first, is the issue FedEx outlined here – the privacy of customer information – worthy of a constitutional battle (assuming FedEx will ultimately lay out a constitutional argument)?

Apparently FedEx thinks so. I’m not so sure, at least not in this context. If we were talking about heavy drugs like heroin or terrorist tools, it wouldn’t matter how many millions of packages FedEx handled. The government would demand cooperation and – without a doubt – FedEx would provide it. So just how illegal does a shipment have to be before FedEx cooperates?

And speaking of millions of packages, would an individual driver with a single truckload shipment be able to make the same privacy argument based on principle alone? I don’t think the State Police would buy it and, for that matter, neither would a judge. But that’s just my layman’s opinion.

So does FedEx stand a chance in court?

Probably not in the first round. The 33-page indictment makes it crystal clear that FedEx management knew exactly what it was delivering and for whom. At the initial hearing last week, the federal prosecutor noted that more particulars, more documented accusations, were on the way.

If the government’s charges are true – and there is every reason to believe they are – FedEx is going to have a hard time looking like a champion of individual freedom and not a greedy corporation skirting the law time and time again.

The judge in the FedEx case seems to sense a long battle. Urging speed on the attorneys, he is quoted as saying he wants to try this case “in my lifetime.”

The next hearing is in September.