Posts Tagged ‘crime and punishment’

Justice Dept. case against FedEx collapses mid-trial

Big news from federal court in San Francisco: we’ve repeatedly questioned the U.S. Department of Justice’s adventurous decision to charge Federal Express with crimes for, in essence, refusing to snoop into its customers’ packages and business. From our post two years ago:

The federal government has prevailed on a grand jury to indict Federal Express for servicing what it should have known were illicit online pharmacy operations. FedEx says it repeatedly asked the government to supply a list of shippers it considered illicit so that it could cut off service, but that the government refused; the Department of Justice contends that circumstantial evidence should have been enough to alert the package shipment company. …

And last month, quoting Washington Legal Foundation’s Cory Andrews:

“Federal prosecutors have accused FedEx of knowingly shipping illegal drugs in interstate commerce and laundering money by merely doing its job: delivering packages (in this case, from online Internet pharmacies) to their intended recipients and getting paid for the service. …To avoid the very sort of ‘gotcha’ prosecution at issue here, Congress inserted exceptions for common carriers in each of the relevant statutes” authorizing shipment of prescription medications and controlled substances when done in the usual course of business….

Now, this [Associated Press/ABC News]:

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, who had been highly critical of the government’s positions as the trial unfolded, granted the motion to dismiss: on Friday he called FedEx “factually innocent” and said the withdrawal of charges was “in the court’s view, entirely consistent with the government’s overarching obligation to seek justice even at the expense of some embarrassment.”

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.”

Many in the field of white-collar legal defense have warned large corporations, particularly those with businesses built upon relationships of public trust, to cut a deal with the federal government rather than try to withstand the full force it can bring to bear in a prosecution. But FedEx, for one, has shown that it is still possible to defy the authorities and win. Mike Koehler at FCPA Professor says that might help lay to rest what has been called the “Arthur Andersen effect” in which indictment is itself seen as tantamount to corporate death.

P.S.: Our friend James Copland of the Manhattan Institute has this observation (via email):

What’s remarkable here is that UPS agreed to a $40 million non-prosecution agreement — and to hire a new corporate officer and an independent auditor looking over their shoulder and reporting to the U.S. Attorney — for the same alleged conduct.

[cross-posted at Cato at Liberty]

More from Jim Copland and Rafael Mangual at Real Clear Markets: “Judge Breyer observed that the government had failed to show any ill intent, and he pointedly noted that prosecutors have not gone after the U.S. Postal Service for the same conduct…. glad FedEx called the government’s bluff and won.”

Feds overreach in prosecution of FedEx for failure to snoop

“Federal prosecutors have accused FedEx of knowingly shipping illegal drugs in interstate commerce and laundering money by merely doing its job: delivering packages (in this case, from online Internet pharmacies) to their intended recipients and getting paid for the service. …To avoid the very sort of ‘gotcha’ prosecution at issue here, Congress inserted exceptions for common carriers in each of the relevant statutes” authorizing shipment of prescription medications and controlled substances when done in the usual course of business.

While courts have generated no case law authoritatively interpreting these exemptions in the Controlled Substances Act (CSA) and the Food, Drug, & Cosmetic Act (FDCA), “the need to do so had never presented itself because no prosecutor had ever dared to bring such a dubious indictment in the previous 45 years of the CSA’s existence.” [Cory Andrews, Washington Legal Foundation; earlier (“Feds indict FedEx for not snooping into packages”)]

Justice Scalia’s jurisprudence

Scalia for the general reader: my new piece briefly explains his textualism, originalism, and rules jurisprudence [American Media Institute Newswire, syndicated] And in a new Cato Podcast, Caleb Brown interviews Tim Lynch and me about the Justice’s legacy in the areas of criminal law, regulation, and administrative law:

In his long battle against vagueness in defining crimes, Justice Antonin Scalia was a true hero of liberty and the rule of law. Harvey Silverglate discusses that here.

Crime and punishment roundup

  • “Professional Responsibility: Prosecutors Run Amok?” video of panel from Federalist Society Lawyers’ Convention, with Judge Alex Kozinski, John Malcolm, George Terwilliger III, Darpana Sheth, moderated by Justice Keith Blackwell of the Supreme Court of Georgia;
  • Criminal punishment with no showing of mens rea (guilty state of mind) is just fine with a certain faction of progressives and that’s revealing [Scott Greenfield, earlier and generally, new Right on Crime website on criminal intent standards]
  • “Bill Cosby And Eliminating Statutes Of Limitation: A Truly Terrible Idea” [Joe Patrice, Above the Law]
  • An “emerging narrative in law enforcement circles: Cops aren’t shooting people nearly enough” [Radley Balko]
  • Police officer is struck and killed by passing car while attending to scene following alleged drunk driving crash. Can driver charged with original crash also be charged with manslaughter and homicide arising from officer’s death? [Ken Womble, Fault Lines on Long Island case of People v. James Ryan]
  • Labeling sex offenders’ passports? Really, what next? [Lenore Skenazy/New York Post, David Post/Volokh] “Why America Puts 9-Year-Old Kids on the Sex Offender Registry for Life” [same, Reason] “What new mean thing can we do to sex offenders to show how serious we are?” [Radley Balko]
  • “If you ignore levels, and just look at rates of change, crime rates in Canada track those in the United States to an astonishing degree. How can that be?” [Tyler Cowen on forthcoming Barry Latzer book, The Rise and Fall of Violent Crime in America]

Occupy Malheur and the Bundy boys’ bait

My take on the Oregon standoff, this morning at The Federalist:

As my Cato Institute colleague Randal O’Toole skillfully explained, none of the protagonists in the Oregon standoff really deserve our admiration: the Hammond ranching family misbehaved, the federal government overcharged, and then the Bundy cranks arrived to spray kerosene on the glowing embers….

Unlawful protest occupations of public places and government buildings have long been a familiar part of American public life, and even those not involving arms sometimes have rather serious consequences for the health and well-being of innocent bystanders….

In the ordinary calculations of humanity, events like Waco and Ruby Ridge and the Philadelphia MOVE bombing represent a grotesque failure. Despite the spirit of the mob and the ever-present temptation to shoot first, most such situations in our country are resolved with legal consequences for the wrongdoers but not with loss of life and limb. We should be glad of that.

Read the whole thing here. I’ve covered the earlier Bundy Nevada standoff in this space, as well as the wider phenomenon I call folk law. For more coverage of occupations, blockades, and acts of physical intimidation that were resolved without bloodshed (and sometimes without later legal consequences to those who broke the law) see our tag on selective law non-enforcement, including this from 2011 about how some cheered when unionized Wisconsin police announced solidarity with protesters occupying the state capitol and refused orders to oust them.

More: Randal O’Toole has a new post up on the Hammonds’ actions and punishment.

“Timeline: Federal Erosion of Business Civil Liberties”