The Justice Department's questionable battle against FedEx

The Justice Department is prosecuting FedEx for drug shipments.

Story highlights

  • Justice Department prosecuting FedEx over unauthorized shipment of drugs
  • Danny Cevallos: FedEx has a strong argument that it shouldn't be held responsible

Danny Cevallos is a CNN legal analyst, criminal defense attorney and partner at Cevallos & Wong, practicing in Pennsylvania and the U.S. Virgin Islands. Follow him on Twitter: @CevallosLaw. The opinions expressed in this commentary are solely those of the author.

(CNN)The United States Department of Justice has named a new defendant in the war on drugs, and the charges are serious indeed.

A 15-count indictment filed in federal court in California bristles with accusations of conspiracies, transporting prescription pharmaceuticals dispensed with illegal prescriptions, violations of the Controlled Substances Act, misbranding charges, and money laundering charges.
Who is this menace to society?
    FedEx.
    Danny Cevallos
    Yes, the courier delivery service.
    Wait, can companies even be charged with crimes? Where would a FedEx be incarcerated? Is there a corporate Shawshank Prison? How does one fit a company for a prison jumpsuit?
    It turns out a corporation can indeed be prosecuted like a person. It's a practice the Supreme Court has approved of for over a century. In fact, in many ways they are easier to prosecute than people. Corporations don't have all the same inconvenient constitutional rights as citizens accused of crimes. Imprisoning convicted citizens is expensive, but corporate convictions, on the other hand, turn tidy profits for the U.S. government, with zero prison overhead.
    Even if corporations can be held criminally liable, should a courier service like FedEx be held liable for "possessing" what bad guys may send through the service?
    The answer, according to FedEx, is not just "No," but a "No" so conclusive that this case should never see a courtroom. The company maintains that it is innocent.
    It has a point.
    "Possession" is an elusive concept. When it comes to drugs, the law recognizes two kinds of possession: actual and constructive. Actual possession is when you have physical control over the contraband. When you have a gun in your hand or drugs in your pocket, you "actually" possess those things.
    The somewhat hazier concept of "constructive possession" means you can "possess" something without even having it on your person, as long as you have ownership, dominion or control over the contraband or the property where it is found. For example, the government would argue that while you may not have actual possession of the 5,000 OxyContin pills in the trunk of your car parked in your driveway, you "constructively" possessed them.
    Conversely, sometimes you can be holding something in your hand or have it in your vehicle, but not "possess" it either actually or constructively, in the eyes of the law.
    Such is the case with couriers who routinely drive to your home, walk up to your door and hand you a package, completely ignorant about what is inside it. It's hard to argue the UPS guy intentionally "possessed" your subscription to porno mags, in their nondescript brown packaging. That is the idea behind the "common carrier" exception to possession, and a large part of FedEx's compelling legal argument.
    A "common carrier" is one who offers its services to members of the public -- without much discretion -- and is engaged in the business of transporting persons or property for compensation.
    The public policy reasons behind "common carrier" exemptions make sense; the industry simply couldn't function if every driver, courier and handler who touches a valid shipment of OxyContin had to obtain a prescription for opiates to be legally allowed to deliver it to your front door. That would lead to an absurd result.
    That's why the Controlled Substances Act and the Food, Drug, and Cosmetic Act allow common carriers to lawfully possess controlled substances, so long as it is in the usual course of their business.
    Of course, this is not a permission slip for drug runners to avoid liability by calling themselves "common carriers." That's why the "usual course of business" language acts as an additional safety measure.
    In court papers, FedEx's lawyers offer the example of an airline whose sole activity was flying controlled substances from Jamaica to Miami. This would not be acting in the usual course of business of a common carrier, since this imaginary airline is not offering its services to the public, generally.
    On the other hand, FedEx argues that it is indeed a common carrier, performing the normal duties of a common carrier, because (a) it is engaged in the business of transportation of property and (b) it offers its services to the public generally.
    It's hard to imagine extending liability to common carriers for possession of contraband. Does this mean a Greyhound bus driver becomes liable for marijuana possessed by a passenger? The bus driver would argue he has no reason to know if a particular passenger is carrying drugs. But if the guy boards the bus with a Grateful Dead T-shirt and a set of bongos, shouldn't the driver at least have a hunch? That seems dangerously close to profiling. Is this another illogical straw man argument? Maybe.
    Obviously, the Department of Justice disagrees, which is why it has brought this criminal prosecution.
    According to the indictment, from at least as early as 2004, the Drug Enforcement Administration, the Food and Drug Administration, and members of Congress put FedEx on notice that illegal Internet pharmacies were using its shipping services to distribute controlled substances and prescription drugs in violation of the Controlled Substances Act, the Food, Drug, and Cosmetic Act, and numerous state laws.
    The indictment alleges that as early as 2004, FedEx knew that it was delivering drugs to dealers and addicts. FedEx's couriers in Kentucky, Tennessee, and Virginia expressed safety concerns that were circulated to FedEx senior management. The DOJ is making the argument that even though FedEx carries and delivers whatever is handed to it by the public, FedEx knew or should have known in specific instances that it was involving itself in suspicious drug activity.
    It raises a larger question, though: Why do we prosecute inanimate objects that we can't even incarcerate? The answer is the same reason that the drug dealers deal drugs, and drug smugglers smuggle them: Money. Power.
    The government in these cases gets to impose its will and policy upon large corporations -- in this case, it would be to force FedEx to help law enforcement in policing shady pharmaceutical transportation. The government also gets to extract gargantuan sums of money from corporations in "deferred prosecution agreements."
    The reason you don't see a lot of corporate trials is because most companies prefer to enter into such agreements; for a company, a public prosecution alone would be tantamount to a death sentence, whether or not it's found guilty. Still, every defense attorney would love to offer the option to his or her human clients of avoiding felony conviction and a potential life sentence -- by agreeing to pay some fines.
    Don't get me wrong: I'm all about prosecuting the black market, especially if that means prosecuting the guys who send us those spam emails to our work accounts with "V1AGRA" in the subject line, for our co-workers to see while we go to the bathroom. I want those guys locked up for sure. I'm just not sure that FedEx has anything to do with the kingpins of the "FR33 CYALIS" email campaign.
    The DOJ's underlying intentions are noble enough -- this is an attack on the supply line of the illegal drug market by attacking the actual supply chain. It makes good strategic sense. It might seem like good financial sense in the short run, with the millions in fines extracted from corporations, but that money has to come from somewhere.
    It's just a matter of time before that trickles down to job cuts and less leg room on our flights. It probably doesn't make good legal sense either. Yes, we have been treating corporations as fictional "persons" for centuries in some ways -- but it's silly to treat them as persons in all ways. FedEx has a strong argument for dismissal in this case, but even if not, it won't be swapping its logo orange for prison orange anytime soon.