Megaupload Asks Hong Kong Court To Drop Restraining Order On Megaupload Assets, Claiming Legal Violations

from the frozen dept

In the continuing global legal fight over Megaupload, the company apparently is asking the Hong Kong high court to set aside the restraining order on the company’s assets that was put in place over two years ago, following a request from the US Justice Department. Megaupload was always legally based in Hong Kong, even if the company itself was based in New Zealand. Megaupload appears to be claiming that the Hong Kong Justice Department did not properly follow the law in going along with the US DOJ’s request. The main issue, which has been debated back in the US, is that, technically, the DOJ cannot serve Megaupload (the company) since it has no US employees or presence. The DOJ can go after foreign individuals, but when it comes to foreign companies, the law is pretty explicit that they can’t. While the DOJ is actively seeking to change that law, it doesn’t change the basic problem with the original request.

Megaupload is pointing out that the US DOJ’s request to the HK DOJ depended on Megaupload being served the criminal summons. But since that hasn’t been satisfied, it argues the HK DOJ has no basis for restraining Megaupload’s assets:

The order was granted on the basis of an ex parte application by the HK DOJ made at the request of the US DOJ. The grounds for discharge of the order is the failure by the HK DOJ—acting on the basis of information provided by the US DOJ—to fully and frankly disclose in that ex parte application serious legal issues relating to the US DOJ’s inability to serve Megaupload with a criminal summons in accordance with United States federal law. Among other things, the US DOJ failed to explain how it intended to comply with the service of process requirements imposed by the Federal Rules of Criminal Procedure, which, as argued in Megaupload’s application, are an essential prerequisite to initiating any criminal proceedings against Megaupload and cannot be satisfied for a corporation that has no physical presence or subsidiaries in the United States. Megaupload has submitted those filings with its application to the High Court.

Megaupload claims it’s seeking to free the assets in order to attempt to regain control over the leased servers from Carpathia, which the DOJ has been hoping would be destroyed (leading to the destruction of evidence in a criminal case, at the DOJ’s urging). While the issue of serving Megaupload is something of a technical snafu, it’s one in a rather long line of sloppy lawyering by the DOJ throughout this case.

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Comments on “Megaupload Asks Hong Kong Court To Drop Restraining Order On Megaupload Assets, Claiming Legal Violations”

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Anonymous Coward says:

It seems odd to me that the US Federal Government itself, is trying so hard to chase down and convict a New Zealand businessman, who resides outside their jurisdictional authority.

Thinking about countries around the world trying to extend their jurisdictions onto American soil, is truly horrifying.

My mind keeps wandering back to that movie titled, ‘Team America: World Police’. I never watched this movie, and I found the movie title to be somewhat offensive. I never would have imagined that the DOJ would take this movie title, and raise it to a whole new level.

Anonymous Coward says:

Re: Re:

“It seems odd to me that the US Federal Government itself, is trying so hard to chase down and convict a New Zealand businessman, who resides outside their jurisdictional authority.”

It’s always about money and power. Megaupload was the biggest cyberlocker/cloud-storage provider out there, it was about to go IPO, it accounted for approx 4% to 5% of all internet traffic, and it had plans to provide free content. We’re talking about a valuation of billions (with a b), and plans to widely expand into other areas (music streaming, advertising revenues, deals with media companies such as Disney etc). AND it was not in American hands. So it was destroyed by any means, and many other such services were also hounded and/or scared away either entirely or they changed their models. And then .. voila … it’s all replaced by thriving services provided by USA companies – Google Drive, MS OneDrive, Apple iCloud, Amazon S3, DropBox etc – regardless of their existence/plans prior to the Megaupload shutdown. And being US companies, the USA/MAFIAA can “probably” exercise more control. I’m almost entirely convinced that the free content, music service touted by Megaupload was the catalyst. But don;t underestimate the billions of lost revenue to the USA (albeit double dutch irish sandwiched).

ltlw0lf (profile) says:

Re: Re: Re:

You should watch the movie because it’s one of the funniest films of the last decade.

I agree. I like some of South Park, but really haven’t cared much for anything else that Trey and Matt have produced, but this movie is awesome, not only on being funny, but on being political satire on the current attitudes and opinions about the US governments reach in areas of law and politics vs the rest of the world. If anything, it makes fun of American views of the rest of the world.

And I’d say it very much is life imitating art imitating life.

PaulT (profile) says:

Re: Re: Re: Re:

Ditto. It’s a hilarious film, not mocking America per se, but mocking the jingoistic, militaristic mindset of many in the country. It was a pretty fitting satire considering everything that was happening at the time, even in between sex, gay and dick jokes (and, for the thin-skinned, it mocks North Korea, Al Qaeda and left-wing celebrity campaigners just as much as anything inherently American).

If even the title of a silly puppet comedy offends, you probably have a lot of other problems and perspectives you need to address.

That Anonymous Coward (profile) says:

Re: Re:

You mean like the vast amounts uploaded from those claiming the sites only use was stealing from them?
Or that had different divisions of the company trying to get advertising deals?

I mean the DoJ was able to sift through PETAbytes in hours to get the “goods” but were unable to get anyone elses data back to them. One wonders if the links were provided to them by the uploaders.

Anonymous Coward says:

And when I say seriously wants deleted, I refer to the possibility that a party has put material on Mega servers that is embarrassing or criminal and is doing all it can to ensure it never sees the light of day.

What I have read about the DOJ’s actions in this matter make me think something else is going on…

That One Guy (profile) says:

Re: Coming soon to a file-locker near you: 'Doctor Dotcom vs. The World'

(Apologies in advance for the length, but an epic tale cannot be rushed or shortened, lest the heart be ripped from it)

It’s likely not that nefarious actually, though the sleaze and corruption factors more than make up for it.

Basically, the DOJ are, more often than not, good little Hollywood employees, and Hollywood had/has a real hate-on for Dotcom, and a flair for extravagance and the theatrical.

As they’ve done in the past, the DOJ took the claims made by Hollywood at face value and sprang into action, rushing to apprehend the nefarious ‘Doctor Dotcom’ before his plans of world domination and/or providing an alternative way for musicians to get their music out and sell it came to fruition, sure that their good buddies/bosses were right and that they’d find a treasure trove of evidence.

(Something to remember, the Dotcom raid went down shortly after SOPA was shot down, and while it likely wasn’t the deciding factor, it did quite likely lead to the whole thing being rushed, as Hollywood was less than pleased, and wasn’t exactly subtle in expressing this displeasure. And when the groups known for making substantial ‘campaign contributions’ start cracking the whip, the recipients of those ‘donations’ start getting jumpy.)

So, the DOJ sprang into action, and coned, bribed or just lied to the NZ government into supporting a SWAT-style raid, choppers in the sky and all, lest Doctor Dotcom flip the magic switch Hollywood assured the DOJ(or the DOJ assured the NZ police, can’t remember exactly) he had that would instantly wipe the servers, destroying all that evidence(the same servers they’re now trying to indirectly wipe, after cherry-picking evidence from. Funny how that works).

Luckily for us all, Doctor Dotcom had not only forgotten to install the magic switch, he had yet to make the technological breakthrough that would allow him to connect, from NZ to the US, to servers which had been disconnected before the raid.

For want of a horseshoe the world was saved(or something like that).

So, the evil Doctor was crushed, now it was just a simple matter of going ‘Pretty please?’ to the NZ government and Doctor Dotcom would shortly find himself on a one way plane to the US, there to stand trial(or ‘trial’ as the case may be) for his heinous crimes.

However, before the champagne could be popped, the unthinkable happened: the NZ government asked for proof of Doctor Dotcom’s terrible crimes.


As though the duplicity of the evil Doctor’s crimes weren’t evident enough, the foolish government wanted proof before handing him over! Truly, the NZ government had obviously gone mad, wasn’t Hollywood’s word and assurances good enough?!

However, all was not lost, for had not the ever-so-virtuous and honest Hollywood assured the DOJ of Doctor Dotcom’s guilt? Had they not even pinky swore it?

So, digging through the evidence they had gathered, and doing their best to ignore the trivialities the NZ courts were complaining about(something about ‘illegally removing evidence from the country’), the DOJ set about building their case, only to find out, to their horror, that the twisted Doctor had somehow triggered a second switch, one that magically created meg after meg, gig after gig, of non-infringing files.

The sheer shock in the offices of Hollywood’s greatest enforcers was indeed great that day.

This would not do. If the Doctor was allowed to access the servers and copy over evidence from them for his defense, all the carefully crafted planning would be for naught! After all, had not US law already found that if a service or technology has significant non-infringing uses, it was legal?

At all costs, the Doctor could not be allowed access to the servers.

Gloom and doom pervaded the office, and the valiant Defenders of Hollywood searched for a way to keep the case afloat, until, one day, a lowly agent came to a shocking realization.

Servers cost a significant amount to maintain…

Thanks to the actions against the vile Doctor Dotcom, his vast wealth was, for the most part, locked away, no longer available to him…

If the server costs were unable to be paid, then they would almost certainly be cleared of all data, and leased to another…

From that realization, a plan was hatched. With their own ‘evidence’ copied off the servers, the DOJ had no more need of the data on them, so all they had to do was stall. Stall and wait, until the day when the servers were cleared free of all that ‘inconvenient data’, and the DOJ would be the only ones left with evidence from them.

The plan seemed to be working, any day now the servers would be cleared of data, and the case could be brought to bear, with the evil Doctor vanquished once and for all.

And then, like a bolt of blacked evil out of the sky, the heinous Doctor unveiled yet another of his plots, and pointed out to the Hong Kong courts that, in their haste, the righteous DOJ had perhaps… missed a few steps, forgotten to dot all the ‘i’s, cross all the ‘t’s, in their haste to put his evil to and end…

[To be continued in ‘Doctor Dotcom vs. The World 2: The Doctor’s Revenge]

Anonymous Coward says:

Re: Re: Coming soon to a file-locker near you: 'Doctor Dotcom vs. The World'

Ohhh, I get it. So that’s why this case has dragged on for over 2 years. The DOJ is trying to force service providers to delete all the evidence that would acquit Mr. Dotcom of the false charges filed against him.

I see. Thank you for taking the time to break down the DOJ’s criminal behavior for me.

That One Guy (profile) says:

Re: Re: Re: Coming soon to a file-locker near you: 'Doctor Dotcom vs. The World'

It’s not the only cause it’s been dragging out for so long, for example, the DOJ seems to have the strangest aversion to actually providing any evidence of Dotcom’s alleged crimes to the NZ courts*, in order to justify the extradition, and so the trial keeps getting pushed back while they ‘gather and prepare evidence’, but it’s very likely one of the reasons, yes.

*Which would, in turn, provide them to Dotcom’s legal team, a fact that very much has an affect on the DOJ’s disinclination of providing it, as evidence that has been presented is evidence that can be challenged.

zip says:

military blowback

MegaUpload’s case is helped by the recent border dispute flareup between China and Japan. Now that the US has taken Japan’s side — as well as threatening China militarily — the US DOJ should not expect more favors from Hong Kong being granted as easily as before.

If the military confrontation escalates, MegaUpload could very well get a free pass as a result.

Anonymous Coward says:

If the goal is to remove the data from circulation then their efforts make a bit of sense. I’m beginning to think this has nothing to do with copyright and wondering if this has something to do with data that the US Govt wants to keep out of someone’s hands and only has this clumsy method to accomplish it.

It’s all conspiracy theory, but I’m at a loss at all of this over stolen movies or songs. And there is no question the DOJ knew there were many legitimate users of Mega that would lose their data based on the DOJ’s actions.

Was WikiLeaks or Manning using Mega as a transfer point? Is there another leaker that we don’t know about that was using it? Or was there information a planned attack needed that is stored somehow on those servers (or they think it is).

All of what we have seen is way over the top and I wonder if there is an alternative to what we are being fed.

Anonymous Coward says:

Re: Re:

I’ll go with Hanlon’s razor combined with the sunk costs fallacy for now and assume the DoJ thought this was just going to be an open-and-shut easily-won feel-good case to keep Hollywood happy, leading them to fuck up massively, and now they just can’t drop it because it’ll make them look bad.

David says:

Re: Re: Re:

What a clever way to cover up the embarrassment of having picked up a turd it is to nonchalantly smear it all over your face. The U.S. government seems to employ that tactic a lot recently.

Drop it, wash your hands. Fire Clapper and prosecute him for lying to congress. Fire Holder, put somebody with a conscience and respect for the Constitution in charge of the Department of Justice, and prosecute Holder for contempt of congress, obstruction of justice and multiple perjury (what a mockery that he stayed in office as the head of the Department of Justice after indulging in illegal weapon trading in the Fast and Furious affair and lying about it to congress under oath). Drop the Megaupload debacle.

The U.S. government is a cesspitt of corruption and bribery, with legislation openly paid for by corporate and military interests and put through with blackmail.

Anonymous Coward says:

I feel like Hollywood never counted on Kim Dotcom and his associates to last out this long. His servers decided to continue storing everything despite how costly it is, and his lawyer is basically working for free for the time being. They tried to strangle him financially and failed. And it seems so full of holes that Hollywood must have planned this whole scheme in the 48 hours after SOPA was shelved and before the raid. It was all done to make an example of Megaupload, but all it seems is that Kim has been exposing all sorts of corruption, simply because Hollywood was angry is precious bill failed in Congress and rushed to go make an example of Mega.

6 (profile) says:

more than technicalities.

“While the issue of serving Megaupload is something of a technical snafu, it’s one in a rather long line of sloppy lawyering by the DOJ throughout this case.”

Actually the inability to serve a foreign corporation is much more than a “technical snafu”. It is an important protection for foreign corporations, just as we would wish our corporations be protected from other countries doing the same. You can serve individuals, but you cannot serve corporate “entities” as they are nothing but legal constructions of the state itself.

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