Megaupload Points Out That The DOJ Has Contradicted Itself Concerning Legality Of Serving Megaupload

Say That Again

from the oops dept

Earlier this month, we pointed out that the Justice Department had asked the federal courts to amend the federal rules concerning issuing a summons on a corporation. As the filing made clear, they were concerned about being able to serve criminal complaints on foreign companies with no US presence, since the law clearly says that you need to send a summons to “the organization’s last known address within the district or to its principal place of business elsewhere in the United States.” If they can’t do that, they don’t meet the qualifications of the summons.

We thought it was noteworthy that the DOJ was looking to change that rule and wrote about it. It appears that the lawyers for Megaupload have noticed this same point… and quickly realized that this filing pretty clearly contradicted the DOJ’s own statements in the Megaupload case, where they insisted that the existing rules did not get in the way of serving Megaupload. Megaupload is using that to renew its request to have the indictment dismissed.

Back in January, it seems, the DOJ told the court that there was no issue at all with the fact that Megaupload had no US address. As Megaupload summarizes in its filing:

Among other things, the Government argued that, even if the individuals are never extradited to the United States, the Government can simply ignore Rule 4’s requirement that the summons be mailed to Megaupload’s “last known address within the district or to its principal place of business elsewhere in the United States” and instead mail it to an alternate destination. (See Dkt. 159 at 3-4 (suggesting that the Government could mail the summons to the Commonwealth of Virginia’s State Corporation Commission; or to the warehouse of third party vendor Carpathia Hosting; or to other third parties).) Previously, the Government had even suggested that Rule 4’s mailing requirement is merely hortatory, and that “[s]ervice of process in the corporate context . . . is complete upon delivering the summons to an officer or agent” of the corporation. (Dkt. 117 at 9-10.)

But that’s clearly contradicted by the DOJ’s own statement to the courts in the request for the rules change — which were filed before the DOJ’s request to the courts.

The Government’s letter is directly relevant to the Court’s consideration of Megaupload’s pending motion to dismiss without prejudice, as it contradicts the Government’s repeated contention that it can validly serve Megaupload—a wholly foreign entity that has never had an office in the United States—without regard for Rule 4’s mailing requirement. To the contrary, the Government explicitly acknowledges in the letter that it has a “duty” under the current Rule to mail a copy of the summons to a corporate defendant’s last known address within the district or to its principal place of business elsewhere in the United States. (See Exhibit 1 at 2.) Moreover, by seeking to have the mailing requirement eliminated, the Government implicitly admits it cannot validly serve Megaupload consistent with Rule 4 as currently written. Finally, contrary to the Government’s contentions before this Court that Rule 4’s existing provisions are mere accidents of drafting, the Government is acknowledging to the Advisory Committee that they are in fact well considered products of “the environment that influenced the original drafters of the Federal Rules of Criminal Procedure,” albeit an environment that the Government believes “no longer exists,” given what it calls the “new reality” of “federal criminal practice.” (Id. at 2- 3.) To the extent that the Government would urge this Court to work the same substantive modification of Rule 4 that it is urging upon the Advisory Committee, this Court should be forthrightly advised in the premises as to the nature of the Government’s request and the reasoning behind it.

The Government’s letter to the Advisory Committee thus confirms what Megaupload has argued all along—that the Government indicted Megaupload, branded it a criminal, froze every penny of its assets, took its servers offline, and inflicted a corporate death penalty, notwithstanding the fact that the Government had no prospect of serving the company in accordance with current law, yet to be amended. Megaupload should not be made to bear the burdens of criminal limbo while the Government seeks to rewrite the Federal Rules to suit its purposes.

Those darn pesky rules.

Filed Under: doj, kim dotcom, service
Companies: megaupload