U.S. Supreme Court Declines to Review Kim Dotcom Case

The indicted leader of Megaupload wanted the high court to consider how the U.S. government had made a claim to tens of millions in his foreign assets.
Nigel Marple

Megaupload's Kim Dotcom couldn't get a date with the U.S. Supreme Court. On Monday, the high court announced that it wouldn't be reviewing his challenge to the U.S. government's seizure of tens of millions of dollars in Megaupload assets.

Megaupload, once one of the world's biggest internet sites, was shut down in 2012 when the U.S. government charged its leaders with racketeering and criminal copyright infringement in connection with the distribution of movies, television shows, songs and other copyrighted content. Dotcom is still fighting extradition from New Zealand. In the meantime, prosecutors brought a forfeiture action in 2014 claiming that money held in bank accounts, luxury cars, big televisions, watches, artwork and other property were tied to the "Mega Conspiracy."

Dotcom argued that the court had no jurisdiction over foreign property and that his due process rights were being violated. He and former Megaupload associates lost the argument at a district court. The 4th Circuit Court of Appeals then affirmed the ruling.

It was held by the lower courts that although the Megaupload assets were in custody in New Zealand and Hong Kong, a Virginia federal court had authority to rule on forfeiture even if the U.S. couldn't guarantee that foreign courts would enforce the order. Additionally, it was decided that by evading prosecution via not surrendering himself to U.S. authorities (and commenting about this on social media), Dotcom had waived his right to be heard under the fugitive disentitlement doctrine.

In coming to the decision, the majority panel at the 4th Circuit noted that the jurisdictional issue had split courts throughout the nation. 

In the cert petition in Batato v. United States, the Megaupload defendants not only raised the issues of jurisdiction and fugitive disentitlement, but also asked the Supreme Court to examine whether a district court, consistent with due process, could resolve factual disputes and make credibility determinations. Dotcom's lawyers have been insisting that a judge should examine the criminality of secondary copyright infringement and also regard safe harbors for internet service providers in coming to a conclusion about whether he's been properly indicted.

The Supreme Court won't review it.

The justices are preparing for what many legal observers believe to be a monumental coming term, with cases concerning political gerrymandering, the divide between discrimination and religious freedom and the ability of corporations to force their workers to adjudicate disputes in arbitration, plus others. Before oral arguments begin today, the justices considered their future term at a conference in late September.

The high court accepted review of an important dispute involving public sector unions and fee collection, among others, but hasn't issued word on some other cases of possible interest in the entertainment and media industry. Among those is Nosal v. United States, a case interpreting the Computer Fraud and Abuse Act, which when it was decided at the 9th Circuit, led some observers to wonder whether it was now illegal to share passwords for Netflix and other websites. Another cert petition worth following is Antonick v. Electronic Arts, where the creator of the videogame, Madden NFL, sought to gain royalties for derivative versions of his original work. Robin Antonick had a $11 million jury verdict wiped out and wants the Supreme Court to consider a looser standard in determining copyright infringement of computer code. 

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