Federal judge won't toss out indictment alleging FedEx knowingly shipped illegal drugs

A judge has rejected FedEx's attempt to toss out a federal indictment accusing the company of knowingly shipping illegal prescription drugs from two online pharmacies.

The Memphis, Tennessee-based shipping giant had argued that an exemption in federal law allows certain transportation companies to legally possess drugs in the normal course of business. FedEx says it cannot reasonably be expected to police the millions of packages it ships each day.

U.S. District Judge Charles Breyer said during a hearing in San Francisco on Thursday that prosecutors allege FedEx engaged in a conspiracy to distribute illegal drugs, which isn't covered by the exemption.

Prosecutors have charged FedEx with multiple conspiracy and drug counts and accuse the company of money laundering. FedEx has pleaded not guilty.