Megaupload Founder Fights Jurisdiction in Federal Court

ALEXANDRIA, Va. (CN) - Prosecutors on Friday urged U.S. District Judge Liam O'Grady to uphold their charges against the file-hosting site Megaupload.

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In January 2012, Megaupload's founder Kim Dotcom and six others were arrested in New Zealand after police raided a lavish birthday party held for in Dotcom's honor. The seven were promptly indicted on criminal copyright violations and fraud. In the aftermath of the arrests, the company was taken offline and its vast assets frozen.

After a New Zealand court delayed an extradition hearing for Kim Dotcom until 2013, his attorneys claimed the court violated the Federal Rules of Civil Procedure by failing to mail a summon to their client's last known address in the United States.

They further argued that U.S. prosecutors have no legal jurisdiction over Megaupload since the company is a foreign entity with no official presence in the United States.

"They wiped out a foreign company that does not reside in the United States by bringing a criminal case against it," Megaupload attorney Willaim Burck said during Friday's hearing. "If this were a person ... there would be little argument that there were due process violations."

Prosecutors countered that the rules entitled them to simply mail summons to the offices of Dotcom's stateside legal counsel, to Dotcom's prison cell following his eventual extradition, or to Carpethia Hosting, a Virginia-based company that leased servers to Megaupload.

Additionally, they suggested that aspects of the Mutual Legal Assistance Treaty were applicable to the case and would enable them to send summons to Megaupload's address in Hong Kong.

As to possible due process violations, the Justice Department's Ryan Dickey said that Congress has "made it crystal clear" that they intend to address global copyright crime.

"The heart of [this] issue is whether a foreign defendant ... can commit crimes in the United States ... and never be brought to justice," Dickey said.

He went on to add that, as there's no time limit in play, they plan on serving Dotcom and his employees with criminal charges whenever they are extradited to the United States.

During the proceedings, federal prosecutors also cited precedent in a District of Columbia case where authorities successfully emailed notice to FARC, a Columbian terrorist organization.

Megaupload's legal counsel claims that the circumstances of the case are incomparable, in no small part because FARC is not a corporation.

As the hearing concluded, Burck requested that Judge O'Grady "dismiss indictment without prejudice" and force the Department of Justice to refile charges, an action that Dickey claimed "would be a huge waste of resources."

Shortly thereafter, Kim Dotcom's Twitter account released the following statement: "Lets see if the judge will respect current law or if the DOJ will gain new powers never intended by the US Congress. We will know soon."

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