New Zealand High Court Orders Urgent Review of Megaupload Case

"Kim Dotcom"

New Zealand's High Court is getting involved in the ongoing attempt to extradite Kim Dotcom and other Megaupload employees to the U.S. for trial.

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U.S. Government Ordered to Hand Over More Evidence in Pursuit of Megaupload

Last month, a New Zealand judge decided that it would only be fair to allow Megaupload's defense lawyers to see what evidence the American government had in its possession to prosecute Dotcom for copyright infringement and racketeering in the high-profile case. A hearing to decide whether Dotcom will be extradited will commence Aug. 6, so the judge ruled it was proper to allow the defense to have the "right to adequate time and facilities to prepare."

But the U.S. government objected, saying that the judge had overstepped its authority. Plus, U.S. authorities said that all the evidence, including 150 terabytes of data and 10 million intercepted emails, would take more than two months to compile, jeopardizing the Aug. 6 hearing date .

In a decision Friday, High Court Judge Helen Winkelmann says there are grounds for an urgent review, reports TVNZ. Other local news outlets report that the U.S. has to start to prepare evidence to be turned over but that a two-day hearing will take place soon.

Since launching criminal actions against Dotcom and other Megaupload employees in January, the U.S. government has been delicately dancing on multiple fronts to keep its prosecution alive, or as it puts it, "to uphold the status quo."

The dance has included an attempt to ensure cooperation from New Zealand's authorities. That hasn't been easy, especially because the matter is before a judge who has expressed a view that the case is "complex" and that the U.S. government is taking civil concepts into the criminal realm.

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U.S. Attorney Neil MacBride has objected to that assessment. On Wednesday, in a footnote to a legal brief submitted in Virginia court, he wrote that Dotcom's overseas lawyers had made an "attempt to exaggerate the complexity of the criminal charges."

Meanwhile, federal prosecutors like MacBride still are attempting to keep Megaupload's U.S. lawyers at bay.

On Wednesday, the government renewed an objection to a motion that would allow Megaupload's attorneys to appear before the court and have access to the seized funds. Prosecutors say that the proposed appearance by a lawyer for the Quinn Emanuel firm represents a conflict because the firm has represented many of the victims, including Hollywood studios such as Disney and Paramount. The judge also has been told that the motion to appear is premature given that defendants like Dotcom haven't been extradited and haven't appeared in court yet.

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One of the first things that Megaupload's lawyers wish to do with the requested access is to have charges against the company -- not to be confused with its employees -- dismissed because it is foreign-based and was not served papers. The U.S. government says that's outrageous. "This line of reasoning leads to the incredible conclusion that foreign corporations can commit crimes in the United States without risk of being brought to justice here," it says.

Megaupload's attorneys previously responded to many of these same arguments by saying, “If the government is to have its way in this case, the only lawyers before the court will be those representing the government."

The U.S. government's fight to hold on to evidence and keep lawyers representing Megaupload from appearing in court aren't its only troubles.

On Thursday, retired New York federal Judge David Sofaer stepped into the scrum over the issue of whether Megaupload files should be returned to its users. Sofaer is now working with the EFF, and together they submitted a brief arguing against the government's retention.

"What is clear is that if the government had seized a hotel or a bank -- or effectively shut that building down while executing a search warrant -- both law and equity would require the government to facilitate the return of third-party property," they argued. "Neither the law, nor the government’s responsibilities, should be any different where digital property is concerned."

STORY: U.S. Government Ordered to Hand Over More Evidence in Pursuit of Megaupload

The case against Megaupload might be taking a bit of a toll on government lawyers.

In MacBride's own court brief this week, he acknowledged that the outcome of extradition hearings in New Zealand could take "months, if not years, to resolve."

E-mail: Eriq.Gardner@thr.com

Twitter: @EriqGardner