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MegaUpload lawyers call for criminal case to be dismissed again, citing DOJ letter

By | Published on Monday 22 April 2013


Lawyers for MegaUpload are having another go at getting charges against the controversial and now defunct digital company dismissed on the grounds the firm didn’t have a formal base in the US, so it is impossible for the American authorities to file charges against it.

As much previously reported, file-transfer and video-sharing site operator MegaUpload was taken offline in January 2012 after US authorities raided its American server facilities, froze most of the company’s assets, and seized its dot com domain. Charges were then filed against both the MegaUpload company, which was incorporated in Hong Kong, and various execs linked to the business, including mouthy founder Kim ‘Dotcom’ Schmitz.

Dotcom, of course, is now living in New Zealand and fighting efforts to have him extradited to face money laundering, racketeering and copyright infringement charges back in the US. His lawyers have long argued that the charges against Dotcom’s company are invalid because the business had no formal US base, making it impossible for prosecutors to formally file those criminal charges in writing, while the allegations made against Dotcom personally are not sufficient to justify extradition.

But last October a US judge disagreed, siding with the prosecution in the case who argued that it would be mad for the country’s criminal justice system to allow foreign corporations, trading in the USA over the net, to be able to break American laws without the risk of facing the consequences in a US court just because they don’t have a mailing address within the States. In his ruling on the matter Judge Liam O’Grady stated: “It is doubtful that Congress would stamp with approval a procedural rule permitting a corporate defendant to intentionally violate the laws of this country, yet evade the jurisdiction of United States’ courts by purposefully failing to establish an address here”.

But lawyers for MegaUpload have now noted a letter written by the recently departed Assistant Attorney General for the Criminal Division of the US Department Of Justice, Lanny Breuer, to the Advisory Committee On Criminal Rules in which he calls for a re-write of said rules regards the procedure for filing criminal charges against corporations. He notes that existing rules indeed assume that a company will have a US base if it is operating in the States, and that criminal charges are meant to be formally filed there.

But, he says, a lot has changed since the process was set in stone in 1946. Then “organisations, such as domestic corporations, were established, conducted activities, and expectedly maintained a presence in the United States”, but now “the economy is global. Electronic communications continue to displace ordinary mail. Organisations can maintain no office or agent in the United States, yet conduct both real and virtual activities here. This new reality has affected federal criminal practice fundamentally”.

Breuer then calls for an update to the rules allowing for alternative ways of serving notice of criminal charges against companies, presumably electronically, specifically mentioning the MegaUpload case in a footnote. Such a change is probably sensible, except – say Team Mega – the very fact Breuer is now calling for the rules to be altered proves that, as of January 2012, their interpretation of American criminal procedure, ie that MegaUpload could not be charged because it lacked US base, was indeed correct. And while those rules may now change, that doesn’t alter the fact that American prosecutors broke the rules last year.

In a new court filing, MegaUpload’s lawyers wrote last week that Breuer’s letter “contradicts the [US] 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 [Criminal Rules] mailing requirement”.

They continued: “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. By seeking to have the mailing requirement eliminated, the government implicitly admits it cannot validly serve MegaUpload consistent with [Rules] as currently written”.

It remains to be seen if this new attempt to have the MegaUpload case dismissed works.