Kim Dotcom Wins Another Round Against U.S. in Court

New Zealand High Court Judge Winkelmann delivered a solid win to Kim Dotcom and his Megaupload codefendants late yesterday. Judge Winkelmann upheld District Court Judge David Harvey's order directing the U.S. to disclose evidence to the defense for use at the extradition hearing.

Kim Dotcom's extradition has become less certain after a judgment which will see the FBI having to prove it has the evidence to back up its charges - and a finding the legal document asking he be sent for trial in the United States did not comply with the law.


The case is [2012] NZHC 2076 - The United States of America v Dotcom & Ors. The 51 page order, dated August 16, 2012, is available here.

First, the Background:

The Government of the United States of America (the applicant) seeks the extradition of the first respondents on charges relating to the activities of the Megaupload business. It alleges that the first respondents were part of a conspiracy to operate websites which were intended to be used by others to illegally distribute copyrighted content, that the members of the conspiracy knew how their websites were being used, had themselves used the systems to upload, reproduce and distribute copyrighted content, and were aware that they had benefited financially from massive infringement of copyrighted material. Finally it is alleged that they conspired to "launder" the proceeds of that offending.

After Kim Dotcom and his codefendants were arrested, an extradition hearing was set. Dotcom and his codefendants moved for disclosure of items so that it could properly prepare for the hearing.

The District Court Judge, David Harvey, granted some of the disclosure requests. (That ruling is here. The U.S. sought judicial review of Judge Harvey's order and is represented by the Crown. AUSA Jay Prabhu, who is leading the criminal case in the Eastern District of Virginia, submitted an affidavit arguing the disclosure order was unreasonable.

[The U.S.] says that the orders made amount to general disclosure, which is unprecedented in New Zealand or elsewhere in the context of extradition, and wrong in law.

Judge Winkelmann has now ruled against the U.S. and dismissed its appeal and upheld Judge Harvey's disclosure order.

The critical issue being decided:

The critical issues raised by this proceeding are whether and in what circumstances disclosure may be ordered in extradition proceedings, and the proper extent of any disclosure ordered.

Judge Winklemann writes there are three phases to the extradition proceeding: The request for extradition and arrest; the eligibility phase (judicial determination of whether the person is extraditable) and the surrender phase.

As to the judicial phase:

[I]t is the court that must decide whether the person brought before it pursuant to an arrest warrant is eligible for surrender in relation to the offence or offences for which surrender is sought....the court must be satisfied that the evidence produced or given at the extradition hearing would "according to the law of New Zealand, but subject to this Act," justify the person's trial if the conduct had occurred within New Zealand.

Some countries are exempted and only have to provide a summary of the evidence, called a "record of the case" or ROC.

The Record of the Case (ROC) must include:

(a) A summary of the evidence acquired to support the request for the surrender ofthe person; and
(b) Other relevant documents, including photographs and copies of documents.

At the extradition hearing,

the court has the same jurisdiction and powers and must conduct the proceedings in the same manner as if the proceedings were a committal hearing for an indictable offence alleged to have been committed within the jurisdiction of New Zealand.

The proceedings are limited in scope, but they must be fair. Contrary to the U.S. argument, those sought to be extradited do have the right to present relevant evidence.

[The] outcome must nonetheless be considered substantively, judicially and fairly. The evidence contained in the ROC and supporting documents may be accepted uncritically but only insofar as reliability and evidence gathering processes are concerned.

Evaluation of the evidence remain[s] a judicial function, and that evaluation could be informed, not only by an evaluation of the ROC, but also by any additional evidence addressed by the requesting state or by the person sought.

Judge Winkelmann agrees with Judge Harvey that:

[T]he Bill of Rights Act is applicable to extradition proceedings, including the right ...to adequate time and facilities to prepare a defence, the right upon which [Kim Dotcom et. al.] relied to obtain disclosure.

As Judge Harvey wrote:

A denial of the provision of information that could enable a proper adversarial hearing in my view would amount to a denial of the opportunity to contest and that would effectively mean that the process is one sided and in reality becomes more of an administrative one based on the limited information provided to the Court by virtue of the ROC.

Effectively by its own actions the United States is saying that there can be no other evidence than the ROC that the Court can take into account, and it can say this with some confidence, given that all or any of the evidence upon which Mr Dotcom might wish to rely is in the hands of the United States or investigative authorities acting at their behest in New Zealand.

The U.S. is wrong, according to both judges. Extradition proceedings are of a criminal nature. The Bill of Rights Act applies to extradition proceedings.

Judge Winklemann writes, citing Judge Harvey:

It is clear that the ROC procedure was intended to smooth the evidentiary path for the requesting state. There is no indication, however, that it was intended to create an entirely new procedural scheme for extradition hearings which would exclude the possibility of a defendant calling evidence where it was relevant to the extradition issue...

...extradition constitutes a serious denial of liberty and security of the person. The person sought is forcibly removed fiom Canada to
another country to stand trial according to that country's rules. It followed that the principles of fundamental justice must be respected.

Judge Winklemann even goes further than Judge Harvey:

To read the Act as the applicant suggests would be to create a lopsided hearing. The applicant would retain flexibility and freedom as to how it presents its case... including the advantage of the ROC procedure and the ability to call supplementary evidence, whereas the person sought would be limited to attacking the reliability of the ROC or identifying inadequacies in the ROC in response. There seems no principled basis on which the person sought should be so constrained.

Judge Winkelmann, like Judge Harvey, finds that the court can order disclosure:

[T]the District Court has an inherent power to order disclosure as part of the powers it has to enable it to regulate its own proceedings, and prior to the coming into force of the Criminal Disclosure Act, disclosure was ordered in respect of committal hearings.

She goes on to address what the phrase "other documents" means in terms of the adequacy of the extradition request. She finds the U.S. request for extradition failed to include these "other documents."

[T]he country seeking extradition must have an obligation of candour which requires it to disclose to the extradition Court in the ROC any evidence gathered which could materially affect the extradition Court's assessment of whether the threshold has been met. This obligation flows from the fact that to conceal such evidence could amount to an abuse of the processes of the Court.

....It is apparent that the ROC as presently comprised does not comply with the requirements of s 25(2), as it does not addend the documents referred to directly or indirectly in the ROC in support of the request for surrender.

...By its language s 25(2) imposes upon the requesting state an obligation to include within the ROC both a document summarising the evidence acquired to support the request for surrender of the person and also other relevant documents that support that request. This suggests a ROC will typically he comprised of an overview of the case for extradition, a summary of the evidence of witnesses of fact. It will also addend documents which provide the basis for the summary or are referred to in it, those documents thereby becoming admissible without the requirement that their authenticity be proved in accordance with the usual rules of evidence.

Judge Winkelmann considers AUSA Prabhu's Affidavit and rejects his arguments. Instead, she finds:

In my view disclosure should be provided by the requesting state. The Act provides the person sought with a right to challenge whether the threshold for extradition has been met before he will be extradited. Consistent with the requirements of s 27 of the Bill of Rights Act to a fair hearing, the person sought should be given access to sufficient information to enable him or her to fully participate in that hearing on an equally informed basis. Without access to materials relevant to the extradition hearing phase, the person sought will be significantly constrained in his or her ability to participate in the hearing and the requesting state will have a significant advantage in terms of access to information.

She also rejects the argument that Kim Dotcom should have to make some kind of factual showing before being entitled to the documents. She said such a finding would put the person in a catch-22 and very rarely would he be able to meet such a threshold.

Finally, she gives the U.S. a little slap for arguing it would be too cumbersome to produce the documents:

The applicant points to the size of the burden thereby imposed. But on the evidence much of the material is already in electronic format. The size of the task also reflects... the complexity of the case. The size of the task in a particular case cannot be permitted to shape the general principle to be applied.

She concludes with a two page summary of her findings. From her conclusion:

Without disclosure the person sought will be significantly constrained in his or her ability to participate in the hearing, and the requesting state will have a significant advantage in terms of access to information.

Bottom line: The record of the case submitted by the U.S.in support of its extradition request was deficient and Kim DotCom is entitled to disclosure of the items Judge Harvey previously ordered disclosed, in order to prepare for the extradition hearing. The appeal of the U.S. is dismissed.

The two page list of items to be disclosed is here.

This is the second time Judge Winklemann has issued a ruling on Judge Harvey's order and the disclosure of documents. In June, she told the U.S. to start copying, pending her final ruling of what had to be disclosed. That ruling is here. She ordered that while the U.S. could wait to actually turn over the documents until the court has ruled on the validity of the disclosure order (which she did yesterday) it had to begin copying immediately.

This order is made on condition that, if the applicant has not already done so, it must immediately commence preparation of the disclosure that has been ordered.

Kim Dotcom was also in another court in New Zealand yesterday seeking the return of his assets to pay his lawyers. His legal fees are now at about $2.7 million and are expected to reach $5 million.

The team asked to borrow against his frozen $10 million worth of New Zealand government bonds, saying he had already run up legal bills of around $2.7 million.

The search warrants for the raid were declared illegal in June. That 56 page order is here. Further hearing on the raids were held last week. (More here.)

A ruling should come down any day in Virginia as to whether the criminal case against Megaupload should be dismissed for failure to effect service of the summons. There have been multiple briefs filed and a lengthy hearing was held at the end of July.

U.S. law enforcement really needs to stop playing global holy warrior and Congress needs to stop funding these investigations and prosecutions, whether it's drugs or copyright issues. They are costing the taxpayers huge amounts of money. The Megaupload charges are unprecedented -- it's far from clear there is secondary liability for a hosting company like Megaupload, and if there isn't, no crime was committed. If Hollywood is offended by Megaupload, let it hire lawyers to file a civil action abroad.

Kim Dotcom is rapidly acquiring underdog hero status all over the world. The Government seized $67 million in assets, and shut down and destroyed a hugely popular company that had no presence in the U.S. other than that some of the servers it leased were located here. It has refused to release money for legal fees. It opposed bail for all the defendants. It has objected to Megaupload's lawyers even entering an appearance in the case in Virginia.

Megaupload's lawyers, who have been working without pay, say the U.S. is alleging that every part of Megaupload’s business throughout the world for its entire 6 1/2 year existence was criminal, and it is demanding every dollar it has ever earned -- all under the rubric that the company and its founders and execs are criminally liable for allowing anonymous users to upload infringing copies of copyrighted files. They say the charges are an unprecedented attempt to apply the common-law theory of secondary civil liability in the criminal context.

So far the Government has lost at every turn in New Zealand. With appeals, these criminal charges and the extradition attempt will consume Kim Dotcom and his codefendants' lives for years.

The charges don't even have a deterrent value. Kim Dotcom is promising to start a new music sharing service by the end of the year.

The U.S. needs to let Hollywood fight its own battles. We taxpayers shouldn't have to fund them -- or approve of our government wiping out a company, seizing its assets, bankrupting its owners and upending their lives all before a trial or conviction. It's time the U.S. stopped acting like the Queen in Alice in Wonderland, running around declaring "Punishment first, Verdict Afterwards."

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  • Display: Sort:
    Couldn't agree with you more (5.00 / 1) (#3)
    by nycstray on Thu Aug 16, 2012 at 10:44:08 AM EST
    The U.S. needs to let Hollywood fight its own battles. We taxpayers shouldn't have to fund them -- or approve of our government wiping out a company, seizing its assets, bankrupting its owners and upending their lives all before a trial or conviction. It's time the U.S. stopped acting like the Queen in Alice in Wonderland, running around declaring "Punishment first, Verdict Afterwards."

    Well nobody here seems to much care (none / 0) (#1)
    by Slayersrezo on Thu Aug 16, 2012 at 10:12:45 AM EST
    Just a rich white guy (aren't we all according to some?) being victimized.

    Good news so far, but too bad this process might drag out. It's also great that Assange has been granted asylum. I find it amazing that neither the Swedes nor the US would work to "defuse" the whole issue by merely stating publicly that no extradition to the US was sought, but as this shows - that's the US government for you.

    Dotcom... (5.00 / 1) (#2)
    by kdog on Thu Aug 16, 2012 at 10:29:12 AM EST
    gets mad love here...check the archives Slayer.

    It's good to have the means to fight for your rights.


    Check the archives , kdog? (none / 0) (#4)
    by Slayersrezo on Thu Aug 16, 2012 at 11:06:31 AM EST
    As far as I know I've been one of a handful *and in one occasion the ONLY one)who have commented on the more recent update threads about Kim Dotcom. It's true that the TL commentariat as a whole does seem mostly supportive when they've commented but they seem rather bored with the story, and haven't bothered to do much commenting on it the last 3 or 4 threads despite Jeralyn's well-written updates.

    Could just be a case.... (5.00 / 1) (#6)
    by kdog on Thu Aug 16, 2012 at 11:23:04 AM EST
    of commenters reading the update and having nothing to add.

    My arse feels like a broken record as it is, trying to be a broken record in moderation at least;)


    that is true in my case (5.00 / 1) (#11)
    by ruffian on Thu Aug 16, 2012 at 11:48:20 AM EST
    In the government over-reach part of the story, I am letting Jeralyn speak for me on this one. All I would have to add is 'that's great' or 'that's horrible' as things develop.

    The Search Feature... (5.00 / 1) (#8)
    by ScottW714 on Thu Aug 16, 2012 at 11:27:59 AM EST
    ... here sucks.

    Google "talk left kim dot com (user name or whatever you are looking for)" to get better results.  No real comment, just letting you know Google is way better then TL Search.

    kdog has always been a champion against tyranny.

    And being the only commenter only really proves you at TL that day and felt like adding, hardly proof of anything meaningful.  I can't remember the last time I logged in on a weekend; doesn't mean anything more than I generally don't fire up my computer at home on the weekend.


    no it doesn't (none / 0) (#18)
    by Jeralyn on Thu Aug 16, 2012 at 07:55:43 PM EST
    the search works fine. Just type in Dotcom or Kim Dotcom and 31 posts come up. You can also click on the Kim Dotcom tag. Or type in MegaUpload.

    I Love Kim.Com (5.00 / 1) (#5)
    by ScottW714 on Thu Aug 16, 2012 at 11:13:19 AM EST
    ...and I was a heavy user of MegaUpload, just because I don't have anything to say about the US government getting it's A handed to them, surely isn't an indication that I am indifferent.

    Nice to know we don't own everybody, had this happened in another country I am pretty sure he would be in a US Prison.  It take cojones to not fold to the all mighty US Corporate Prosecutorial Machine.

    But if you are cool with the US government fumbling with the arrest of a non-US citizen in another country, by all mean include this with your next Ryan rant.  Please include the costs of these misadventures and the cost of imprisoning non-US citizens in Federal lock-up for crimes committed outside the US, and the ultimate costs they will pay after Kim.Com sues them.

    I have said from day one, the players involved were sure SOPA and PIPA were going to quietly pass.  With those tools this would be a slam dunk, but they failed to pass several days before the arrest, but they were all in and decided to go forward with the original plan.  

    Too bad Americans aren't quit as dumb as they assumed.  And this is one instance where the media awoke from it's normal catatonic state.


    Count me as another who (5.00 / 1) (#13)
    by nycstray on Thu Aug 16, 2012 at 12:10:38 PM EST
    always reads, but doesn't always comment. I do cheer him on from behind my screen though ;)

    DotCom (none / 0) (#15)
    by sj on Thu Aug 16, 2012 at 12:14:04 PM EST
    is the reason I am teetering on the edge of opening a twitter account.

    Don't fool yourself (none / 0) (#7)
    by sj on Thu Aug 16, 2012 at 11:25:54 AM EST
    Lots of us read every word and follow each link of Jeralyn's reports on DotCom.  It's just an issue that doesn't get the gun-toters all fired up so we're free to read without all that stuff getting in the way.

    Thanks for the heads up on Equador's decision to grant formal asylum to Assange.  I have some thoughts about that so I hope an Assange thread is put up.

    I'm glad that DotCom has the resources to defend himself and the forum to broadcast his plight to the entire world.


    Off Topic... (none / 0) (#9)
    by ScottW714 on Thu Aug 16, 2012 at 11:31:53 AM EST
    ...how are they going to get Assange out of the embassy, didn't GB say they were going to overrun the embassy if this happened.

    Here's a link (none / 0) (#10)
    by sj on Thu Aug 16, 2012 at 11:41:59 AM EST
    to the NYT article.  Somewhere in the comments (most of which are surprisingly good by the way; very few knee jerk responses one way or the other) there is some discussion about the implications of such a move on the part of GB.  For someone who is wanted for "questioning" and hasn't even been charged with a crime.

    new Assange thread (none / 0) (#16)
    by Jeralyn on Thu Aug 16, 2012 at 01:17:05 PM EST
    is here. Please put comments about him there. Thanks.

    Yes, I too read all the (none / 0) (#12)
    by fishcamp on Thu Aug 16, 2012 at 12:03:11 PM EST
    DotCom reports but the International legalese is a little difficult for me.  Naturally the original raids, seizures, jail, and the entire story of Megaupload were more interesting.  The greater story is the DOJ and their alphabet henchmen continually butting in to so many people, places, and things  in the world and costing we the people too much money.  

    great phrase (none / 0) (#17)
    by Jeralyn on Thu Aug 16, 2012 at 01:18:29 PM EST
    "alphabet henchmen" -- I may have to borrow it.

    Or do like the rest of us... (none / 0) (#20)
    by unitron on Fri Aug 17, 2012 at 06:43:26 AM EST
    ...and just call them the mafiAA.

    The case is in a holding pattern for sure. (none / 0) (#19)
    by EL seattle on Fri Aug 17, 2012 at 03:30:26 AM EST
    But other skirmishes continue in the war between traditional copyright stuff in the it should all be free on the internet era, so attention might move on to other tales and sideshows until either Kim Dotcom leaves the country or Hollywood stops shooting movies in New Zealand.

    As with politics, I think that legal discussion on websites seems to have become a form of tribal entertainent these days. What sets TalkLeft apart from almost every other site is the fact that the research and documentation is seriously presented here in ways that are actually useful. And that is always appreciated, even though anything about the Megaupload case can seem so trivial when placed between posts containing news from things like the Zimmerman case.

    But I still want to find out what happened to those fish.  

    Sort of off topic to this case, but appropriate to the current state of attention to the copyright sagas, there's a fresh post over at Copyhype about both Judge Posner's legal opinion and the new media coverage that folowed the announcement of the Flava Works, Inc. v. Gunter decision.

    But, of course, that post might just be MPAA ASCAP sock puppet boilerplate. They're crafty gangsters, those guys.