Kim Dotcom Wins Another Round in NZ Court

Despite a ruling by a federal judge in Virginia several months ago holding that Kim Dotcom cannot defend against the forfeiture of his assets because of the fugitive disentitlement doctrine, a New Zealand Court this week has granted DotCom's request for an Order prohibiting the Crown in New Zealand from proceeding to register the subsequent U.S. default forfeiture judgments against the assets in NZ. The opinion is here.

It's all pretty complicated, but in a nutshell: [More...]

Dotcom's properties were seized in Dec. 2012. The U.S. is seeking his extradition on criminal charges. Dotcom is fighting that request in the New Zealand Courts. In July, 2014, the U.S. initiated a civil forfeiture action against his assets. In February, 2015, the Virginia court said he has no right to access the courts in the U.S. to defend against the civil forfeiture actions because of the fugitive disentitlement doctrine. In March, 2015, the U.S. was granted a default judgment against his assets (available here.) Since most of the assets are in New Zealand and Hong Kong, the order stated all the NZ assets were to be forfeited to the NZ Crown. The Crown sought to register the judgments in New Zealand. Dotcom filed a proceeding to stop the registration. The Crown argued, among other things, that the U.S. court had barred his ability to access the courts for relief under the fugitive disentitlement doctrine.

This week the New Zealand court ruled the U.S. court's application of the fugitive disentitlement doctrine is inapplicable in New Zealand. Kim Dotcom is fighting the extradition attempt in the New Zealand courts. Thus, it granted Dotcom's request to stop the registration process with respect to the U.S. forfeiture judgments. However, this is only a temporary reprieve, pending further judicial review of the judgments. From the ruling:

"It is, I think, self evident from the above discussion that the plaintiffs have a substantial position to preserve and there will be very real consequences if it is not protected, pending final determination of the claim for review," Justice Ellis said. "If the provisional view I have formed about the unavailability of post-registration relief is correct, authorising the registration application to proceed now might deprive the plaintiffs of any ability to defend the extradition or to pursue their appeals against the forfeiture order in the United States."

Here's Kim Dotcom's shorthand version of the win:

US Judge ruled my assets belong to US. He ruled I'm a fugitive. NZ Court disagrees. I'm simply using my treaty rights to fight extradition.

He also tweets:

"We have a friendly Judge. Let's declare him a fugitive and steal all his global assets via default judgement." - Some idiot at the DOJ


Despite this reprieve, Kim Dotcom has many more battles to fight. In addition to his extradition case, which is set for September, he is trying to block an effort by the Crown to send his seized computers to the U.S. now that the NZ Supreme Court ruled the search warrants executed back in 2012 were valid.

Dotcom wants access to his devices for an expert to check they haven't been "trojanised" by US authorities, prior to their being seized, a practice that Mansfield told the justices was commonly used by the FBI.

Ars Technica has this explanation of why the extradition proceeding against Kim Dotcom is taking so long.

Also, the U.S. forfeiture case isn't the only case against Dotcom's assets. Hollywood ( the MPAA) has also filed a civil action for his and Megaupload's assets.

At the root of all of these cases is MegaUpload, the now defunct cloud storing service.

From Kim Dotcom's White Paper on the case:

One day after the U.S. Congress failed to enact the controversial Stop Online Piracy Act
(SOPA), the executive branch of the U.S. government commandeered Megaupload in a coordinated global take-down, and drew battle lines between digital rights advocates, technology innovators and ordinary information consumers on the one side, and Hollywood and the rest of the Copyright Lobby on the other.

Megaupload operated for seven years as a successful cloud storage business that enabled tens of millions of users around the world to upload and download content of the users’ own choosing and initiative.

The spectrum of content ran from (to name just a few) family photos, artistic designs, business archives, academic coursework, legitimately purchased files, videos and music, and – as
with any other cloud storage service – some potentially infringing material. Despite Megaupload’s lawful uses, the U.S. government has charged the company and its executives under the Racketeer Influenced and Corrupt Organizations (RICO) Act, and has branded the company, its personnel and its tens of millions of users a “criminal enterprise” dedicated solely to infringing U.S. copyright laws.

As to his legal defense:

The U.S. government’s case against Megaupload is grounded in a theory of criminal secondary
copyright infringement. In other words, the prosecution seeks to hold Megaupload and its executives criminally responsible for alleged infringement by the company’s third-party cloud storage users. The problem with the theory, however, is that secondary copyright infringement is not – nor has it ever been – a crime in the United States. The federal courts lack any power to criminalize secondary copyright infringement; the U.S. Congress alone has such authority, and it has not done so. As such, the Megaupload prosecution is not only baseless, it is unprecedented.

In May, the New Zealand court ordered hundreds of thousands of dollars of the seized assets be unfrozen so Kim Dotcom could use them to pay his lawyers and living expenses.

As I've written several times, I think the U.S. pursuit of Kim Dotcom is a waste of resources.

Kim Dotcom today tweets he is grateful for all the support he has received:

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