Indicting The Messenger

In the future, everyone will be a cop for 15 minutes.

— Apologies to Andy Warhol

And if you don’t fulfill your duty, the government will indict you.  United Parcel Service decided it was a better business move to pay off the government, at a price tag of $40 million.  Federal Express refused. The government has now indicted FedEx for its refusal to capitulate.  Via Mike Masnick at Techdirt:

Apparently, FedEx was unwilling to fall on its sword and cough up a similar amount to the US government, so the DEA and DOJ have announced they’ve gotten a grand jury to indict the company for delivering drugs associated with internet pharmacies. You can read the full indictment, which tries to spin a variety of stories into evidence that somehow FedEx “knew” what was in those packages.

Maybe it did. Maybe it didn’t. So what?  FedEx is in the business of delivering packages. There is no crime in that.  It is not in the business of assessing the lawfulness of the contents of the packages it delivers.  And this is what pissed the government off.

FedEx is fighting these claims pretty aggressively, insisting that it’s crazy to make it responsible for what’s in the packages:

“We are a transportation company — we are not law enforcement.”

The indictment relates to internet “pharmacies,” that ship drugs to people who may have no prescription and without having been treated by a physician.  Not all internet pharmacies are evil, and not all prescriptions filled are wrongful, but the government nonetheless demands that delivery companies be not only its eyes and ears, but its arms and legs, in this battle of its war against crime.  If only corporate America would faithfully serve its master, it would make law enforcement’s job so much easier.

The indictment is the typical slinging together of vague back-end anecdotes which, when the salient details are studiously omitted, create the disturbing appearance of complicity, if not exactly wrong-doing.  After all, shouldn’t a delivery company know that it’s being used by criminals?  Because it’s their responsibility to spy on packages, or see into the hearts of recipients, or know each back office deal of their customers?

Ironically, it’s not that FedEx wants to deliver contraband, but that the government refused to cooperate.

Furthermore, the company notes that it has long asked the DOJ to provide it with a list of online pharmacies that it shouldn’t do business with, so that it didn’t have to just guess. The government did not provide the list, and seems to think that FedEx must be psychic (and should know what’s in all packages and whether or not they’re illegal.”

“We have repeatedly requested that the government provide us a list of online pharmacies engaging in illegal activity,” [VP Patrick Fitzgerald] said. “Whenever DEA provides us a list of pharmacies engaging in illegal activity, we will turn off shipping for those companies immediately. So far the government has declined to provide such a list.”

Apparently, FedEx doesn’t appreciate how busy the government is defending us from terrorists, and has no time to prepare lists for the likes of delivery companies. Yet they will make the time to indict.  Priorities.

The significance of this indictment in the Northern District of California won’t be lost on other companies, say telecoms or ISPs, for instance, who might be disinclined to bend over whenever the government puts the arm on them to do its patriotic bidding.  By questioning, challenging or, god forbid, refusing to do as the government commands, a corporation engaged in a fully lawful business could be accused of conspiracy for failure to serve its master well enough.  That’s a very powerful message.

The concept of secondary culpability is an extremely dangerous one.  It’s one thing to be an illegal internet pharmacy, sending out prescription drugs to anyone with a credit card.  Regardless of how one feels about the regulatory nation, the fact remains that its illegal to sell prescription drugs without a prescription.  They know what they’re doing, and know if they’re breaking the law in the process.  If so, and the evidence proves it, they take their heat.  That’s how crime goes.

But the secondary market offers a terrible way to fight crime, where government pressure forces companies engaged in lawful commerce to risk their fortunes on the legality of their customers, and become liable for not investigating and condemning anything with a whiff of impropriety at their own criminal risk.

There are a list of businesses the government squeezes to shut down those it can’t get legitimately.  Credit card companies are pressured to refuse payments to companies the government hates.  Banks are pressured to refuse their deposits.  Now delivery companies are pressured to refuse to deliver their goods.

Note that the primary means of attack, indict and prosecute the party who is alleged to be engaging in criminal conduct is no longer necessary, if they can be shut down via more compliant sources.  This saves the government from having to prove they committed a crime, and instead allows the government to strangle any business it pleases through secondary means.

So do you want FedEx deciding whether the contents of your parcel are worthy of their risk to deliver it?  Do you want the government shutting down businesses, perhaps industries, they decide are evil, or maybe just don’t like very much, by putting the squeeze on secondary providers to terminate their relationships and services?

And do you think FedEx should be held criminally liable for their refusal to play junior G-man at the government’s demand?  Remember, if the government can do it to FedEx today, without fear of this extension of conspiratorial culpability to a party engaged in wholly lawful conduct, it’s just a short slide to your door.  And it could happen overnight.

22 thoughts on “Indicting The Messenger

  1. RKTlaw

    I hear echoes of the Feds going after attorney fees (and attorneys) for having the temerity to defend those accused of drug crimes. Different, but the same.

  2. Brian Neathery

    The USPS also delivers prescription drugs. I wonder if they’ve been given a list? Or are they already performing the level of snooping that the DOJ requires?

  3. ecpa

    As you don’t allow links, I won’t link to an article on Google’s $500 million settlement with DOJ in 2011 based on Google’s acceptance of advertisements from Canadian online pharmacies selling to U.S. customers. According to the unlinked Wall Street Journal article, the government “cited internal emails from Google employees discussing the tactics used by illicit pharmacies to circumvent its controls. Other seemed to suggest in emails that they were actively working with illicit advertisers to prevent their ads from being disqualified.”

    1. SHG Post author

      There is a difference in quality between the Google settlement and the FedEd prosecution. Google adwords facially targeted consumers for illegal Canadian controlled substances. It didn’t involve Google peaking into parcels, but was precisely what Google was selling. It’s not the same.

  4. ExEMT

    [Ed. Note: Comment deleted. Reiterating at length what’s already been said in the post is not a good use of my bandwidth.]

  5. Eric Braden

    This seems to mirror the conversations around net neutrality. Well, back when the main topics were about ISPs being forced to police packets they passed through, instead of the “fast lane” mantra of the moment.

  6. DanQ

    Black lists again.

    I wonder if such actions, viewed 60 years from now, will have a similar judicial record (and social taint) to them as those McCarthyism spawned.

  7. Mark Draughn

    I’ve been waiting for your post on this since I first read the story. So it’s called “secondary culpability,” huh? To me, this seems similar to the laws which go after owners of properties where people are using drugs, supposedly to shut down crack houses, but also used on owners of nightclubs and cheap hotels on the theory that they are profiting by making space available for people using or selling drugs. Plus seizing those properties looks good on the books. Or is that something else?

    1. SHG Post author

      In rem property forfeiture has similar conceptual underpinnings of liability for the conduct of others, but it’s unfair to draw a direct comparison for many reasons. As bad law goes, few things approach the depths of in rem forfeitures.

  8. Pingback: UPS capitulates, but FedEx will fight « Quotulatiousness

  9. Marc R

    It’s just a money grab by the feds. They want their cut of any proceeds; perhaps UPS pushed them to even the playing field. I thought the comparison above to attorney fees is inappropriate. You have a 6th Amendment right to counsel and, while you can argue you have a right to freedom of contract, there’s no specific protection that you can ship goods. The “secondarily” criminality is more akin to indicting an internet service provider for selling anonymous routers to known child porn distributers than to attorneys and fees under say 18 USC 1957.

    I don’t find the Fed Ex argument “we asked for a list of bad pharmacies” to be persuasive. If I’m a pawnbroker and I ask the government for a list of known dealers in stolen property and they don’t provide it to me does that somehow mitigate my duty to check on the validity of sellers to my store?

    1. SHG Post author

      While you’re right about the 6th Amendment right to counsel, that didn’t do much good for Golderberger & Dubin when it came to protecting their source. The question isn’t the senders right to privacy, but the duty of the delivery company to know what it’s delivering or suffer culpability.

      As to FedEx’s request for a list, that’s more persuasive in mitigation than you give it credit for. FedEx is saying, we’re not the cops. We’ll cooperate, but we’re not assuming your responsibility. I think it’s a very persuasive point.

    2. Rick Horowitz

      I think (in addition to what I see Scott already said in his response to this) that there is a difference between pawn shops and shipping companies for more than one reason.

      For one, pawn shops are typically buying (or loaning money on) goods that they receive, ultimately for themselves. Because when the goods are stolen, the seller/borrower isn’t coming back; it’s going to become the property of the pawn shop. The shipping company is merely doing what shipping companies do: shipping from one entity to another.

      For another, the item the pawn shop receives is not an unknown quantity. The pawn shop examines it — and the person bringing it in — and has more information available to it to make a determination as to whether the items are stolen, or not. Plus, at least in my area, law enforcement (and/or someone else) frequently does contact the pawn shops to warn them of goods that may come their way. (One of my friends is a pawn shop owner, and I rent two parking spots from his shop for my office.)

      At best, all the shipping companies would know is that someone is shipping something from a pharmacy. And that’s “at best.” What if the pharmacy is deliberately disguising its name? Is the government really saying that the shipping company should look inside each package to see if it contains pharmaceuticals? And then go a step further to determine whether those pharmaceuticals are legit? And that their sale & purchase is legit?

      Because, if so, that makes this different from pawn shops in another way: at least where I live, if they buy (and thus possess) stolen goods, they are required to know they are stolen.

      Seems like there’s a missing scienter element here for FedEx. Which makes the “list” issue a little more persuasive, as Scott said, than you are making it.

  10. Fubar

    From discarded carbon paper of a policy memorandum for general departmental distribution, found near a dumpster behind 950 Pennsylvania Avenue NW, Washington, D.C.:

    We’re Department of Justice. We care.
    Any crime, any time, any where —
    If someone didn’t do it,
    But failed to intuit,
    We still will indict ’em. So there!

  11. KronWeld

    Seems like the Feds should go after the banks and PayPal for secondary culpability I mean they are processing the payments. Stop the payments and the pharmacies are out of business.

  12. Andrew

    So Amy Alkon riffs off this post, mostly just quoting you at length, and then uses your quotes to extol the virtues of Marc Randazza and Popehat’s Ken White as defenders of civil liberties. (Delete if inappropriate)

    Then Walter Olson at Overlawyered writes about Amy Alkon’s post, without mention that her post was all your quotes, but doesn’t mention you at all. (Same)

    Why do Amy Alkon and Walter Olson hate you so much?

  13. Bruce Coulson

    Government shakedown, aka unofficial tax. There’s no feasible way FedEx could possibly search every package, or check out the bonafides of every shipper of goods, and the government has to know that. The refusal to provide information on suspect suppliers means the government is both trying to increase revenues and avoid any liability for interfering with/searching/delaying legitimate shipments. “Hey, we didn’t search your package; it was that evil shipping company!”

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