SAN FRANCISCO – 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.
U.S. District Court Judge Charles Breyer in San Francisco granted the request in a two-page order that did not indicate why prosecutors were dropping the case.
The U.S. Attorney’s Office said it would have no comment on the decision.
FedEx was indicted in 2014, and the trial began on Monday.
In court on Friday, Breyer said FedEx was “factually innocent.” He said the company repeatedly asked the U.S. Drug Enforcement Administration to give it the name of a customer that was shipping illegal drugs so it could stop working with the person, but the agency was either unwilling or unable to do so.
“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,” he said, according to a transcript of the hearing.
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.
The trial was unusual because of the government’s decision to bring drug charges against a package delivery company and the lack of a settlement.
Rival UPS Inc. paid $40 million in 2013 to resolve similar allegations that arose from a government crackdown on Internet pharmacies that ship drugs to customers without valid prescriptions.
FedEx attorney Cristina Arguedas said the company did not reach any monetary settlement with the government in exchange for ending the case.
The crux of the government’s case was that FedEx knew the drugs were illegal and headed for dealers and addicts, some of whom died. FedEx Corp. was charged with conspiracy to distribute controlled substances, conspiracy to launder money and other counts.
FedEx said it only shipped what it believed were legal drugs from licensed pharmacies and that it helped investigators crack down on the two pharmacies that prosecutors say were involved in the scheme.
Breyer had asked prosecutors to present testimony from two DEA agents that FedEx said regularly talked to the company but never told it to stop shipping for any online pharmacies.
The agents, who were expected to testify Friday, were not on the government’s witness list, Arguedas had said.
Rory Little, a former federal prosecutor who teaches at the University of California, Hastings College of the Law, said the case against FedEx was “too big and too important” to not do perfectly.
“It’s just very disturbing that this case could go on for as long as it did and then get dropped days into the trial,” Little said.
The government’s case encountered setbacks and a skeptical judge. The case was before Breyer, not a jury.
The judge in March dismissed numerous charges against FedEx after prosecutors named the wrong defendant in an agreement that gave authorities more time to file charges and not violate the statute of limitations.
FedEx spokesman Patrick Fitzgerald said in a statement Friday that the company has always been innocent and 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,” he said. “Many companies would not have had the courage or the resources to defend themselves against false charges.”