DOJ Tries To Explain How It Can Get Around Requirement To Serve Megaupload In The US

from the tapdancing dept

Wed, Jul 18th 2012 8:18am — Mike Masnick

Back in April, a US judge pointed out that US criminal law requires serving those accused of criminal activities and Megaupload, as a foreign-based corporation, might not be subject to such service -- potentially killing the lawsuit against the company (though, not against the individuals who run the company). The Justice Department has now hit back with a filing mocking the idea that Megaupload could avoid criminal charges as a company (pdf and embedded below).

The filing focuses on how Megaupload had extensive operations in the US, including having many of its servers hosted here -- and even had two separate CEOs at various points who reside in the US (including Swizz Beatz, who the filing notes, has refused to cooperate). It further argues that there is no rush to serve the company, and that it can do so once the execs are extradited to the US -- or it can serve them at the office listed in Hong Kong. Admittedly, part of this fight is really about process technicalities, so I wouldn't make too big a deal of them. However, there are legitimate jurisdictional questions about what the standards are if the US can go after a company anywhere in the globe, just because it's online. That could certainly come back to haunt the US, as US companies are frequently targeted by other countries. Having a case like this could be used as justification to retaliate against US companies.

The filing also highlights something that is somewhat self-contradictory about the US's case. In an effort to argue US jurisdiction, the DOJ argues that Megaupload has been involved in civil lawsuits (on both sides) in the US. That is true... but that seems to weaken another contention in the DOJ's wider case: that it had to take the actions it did because Megaupload was somehow "unreachable" as an offshore "rogue site." The actual evidence, as noted by the DOJ itself in this filing, proves otherwise.

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Filed Under: copyright, jurisdiction, united states
Companies: megaupload

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John Doe, 18 Jul 2012 @ 8:37am

We are heading quickly down a slippery slope
First we, the US, blocked the UK from filing libel tourism lawsuits against US citizens. Next we go after UK and other foreign citizens for IP infringement. How do we justify the 2 situations? What will come next is the US government handing over it's citizens to foreign countries for violating there laws from US soil. We will have governance at the lowest common denominator; whatever is illegal in one country will become illegal in all countries. Is that what we, or any other country, really wants? Speaking for myself I can say NO!
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Anonymous Coward, 18 Jul 2012 @ 8:39am

"The actual evidence, as noted by the DOJ itself in this filing, proves otherwise."

Not really. If the case falls apart over jurisdictional issues, trust me this will come back to haunt everyone. SOPA will look like a walk in the park compared to what will be piled up as a result of any failure in this case.

Quite simple, the economic interests in the US and the concern of US law makers regarding illegal activities coming from overseas into the US via the internet is already fairly high, and a failure to get Mega and it's founder into a US court would be more than enough to overcome any whining you can do online about SOPA style laws.

Quite simple, you better hope they slaughter Mega, the alternatives are way worse.
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Nathan F (profile), 18 Jul 2012 @ 8:47am

Re:
The only way we are going to get real and meaningful change is for something as big and visible as this to explode into all kinds of messes. Hopefully when all the horses and men put everything back together we get something better then what we started with.
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Anonymous Coward, 18 Jul 2012 @ 8:48am

basically, what the DoJ is trying to do here is change anything and everything it wants to suit the circumstances it wants. like stated, they need to be very careful here. they certainly cant expect the world to cooperate and let them do as they like then, when the shoe is on the other foot, refuse to cooperate with the world. that could lead to some deep shit being thrown around and i doubt whether the US bravado will keep it or US companies safe then! the US have gotten away with extraditing people from other countries on the flimsiest of evidence and when no law has been broken in those other countries. they need to be extremely careful how far they try to push this. sooner or later they will be slapped down, and hard!! remembering on whose behalf the DoJ is going down this road should lead them to act responsibly and realise that the conflict that could easily come out of showing such contempt to other countries laws is not worth it, over a friggin movie or music file. wake up, smell the coffee, and admit to the monumental fuck that has been made and move on!!
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Anonymous Coward, 18 Jul 2012 @ 8:50am

Re:
Are you saying that if they make a law that is worse then SOPA it will have a better chance of passing?
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Anonymous Coward, 18 Jul 2012 @ 8:51am

Re: We are heading quickly down a slippery slope
"How do we justify the 2 situations?"

Simple - legal tourism is a horrible thing, and has nothing to do with where the supposed libel took place. The IP infringement case is different, as the material is distributed worldwide including back into the US. Since the content generally comes from the US or involves a US company, and the content is made available in the US, there is plenty of standing.

You really cannot draw parallels here.
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Anonymous Coward, 18 Jul 2012 @ 8:51am

Admittedly, part of this fight is really about process technicalities, so I wouldn't make too big a deal of them. However, there are legitimate jurisdictional questions about what the standards are if the US can go after a company anywhere in the globe, just because it's online. That could certainly come back to haunt the US, as US companies are frequently targeted by other countries. Having a case like this could be used as justification to retaliate against US companies.

I don't think there's really much question about whether the court has personal jurisdiction over Megaupload Ltd. (and over the individual defendants as well). The issue here is only over service of process on Megaupload Ltd. (and not the individual defendants).

The purpose of service of process is provide notice to the defendant. Megaupload Ltd. obviously has notice--they're in federal court arguing this very motion. So it's not like Megaupload Ltd. isn't getting their constitutionally-guaranteed notice of the suit. Due process doesn't demand that actual service be made. It is only required that reasonable efforts are made--and the government spells out lots of ways it can reasonably attempt notice. But considering the fact that Megaupload Ltd. has ACTUAL notice here, the whole argument about notice is silly.

Nonetheless, Megaupload Ltd.'s very expensive lawyers are making the argument...

Federal Rule of Criminal Procedure 4(c)(3)(C) provides: "A summons is served on an organization by delivering a copy to an officer, to a managing or general agent, or to another agent appointed or legally authorized to receive service of process. A copy must also be mailed to the organization's last known address within the district or to its principal place of business elsewhere in the United States."

Megaupload Ltd. is basically arguing that since they have no mailing address in the U.S. that can be used to mail a copy of the summons, they get to break whatever laws they want in the U.S. and the U.S. can't do a thing. Good luck with that. The government's brief makes a lot of great counterarguments, but on its face, the argument is laughable. Rule 4 doesn't create a loophole for criminals to violate whatever U.S. law they want with impunity by simply not establishing a mailing address.
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John Fenderson (profile), 18 Jul 2012 @ 9:00am

Re:
Quite simple, you better hope they slaughter Mega, the alternatives are way worse.

I fail to see how surrender and advocating unfair prosecution of apparently innocent entities can lead to a better situation in anything. First, because I have a hard time being OK with sacrificing other people, but also because the Megaupload case has already opened a lot of people's eyes to what's happening in the big picture. It has damaged the credibility of the US justice system by making the corruption obvious. Getting the case into court would only further harm that.

The "alternatives" you speak of are nothing of the sort. That stuff is going to happen with maximal fury regardless of what happens with Megaupload.
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Anonymous Coward, 18 Jul 2012 @ 9:00am

Re:
I should add why I think their argument is so dumb (other than the fact that it leads to ridiculous results). Rule 4 says: "A copy must also be mailed to the organization's last known address within the district or to its principal place of business elsewhere in the United States." That obviously presupposes that such an address exists. When no such address exists, there is no need to mail the summons to that nonexistent address. That's it. It makes no sense to then argue that when there is no such address, the court has no jurisdiction over a criminal defendant. Give me a break. How many thousands of dollars was spent on this stupid motion?
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Anonymous Coward, 18 Jul 2012 @ 9:06am

Re: Re:
" because the Megaupload case has already opened a lot of people's eyes to what's happening in the big picture."

Yes, you are correct. The US has clearly identified a company that is EXACTLY the sort of thing SOPA was intended to address. People really didn't understand how the internet was being used to undermine local, state, and federal law in the US, and now they have a better idea.

People can understand cockroaches scurrying when the light is turned on. They can understand that Kim was trying really hard to keep his stuff across various jurisdictions to try to avoid the exact situation he finds himself in. He didn't think that anyone would go after a bunch of companies from various countries AND knock his door in NZ as well.

It's much easier to explain to a Senator or House member why new laws are needed to deal with the problem, because the structure and setup of Mega and it's sub companies shows how people can try to hide all their stuff offshore.

If the prosecution of Mega doesn't get at least part of the way there, the laws will likely be changed to deal with the situation.
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CompuTechX (profile), 18 Jul 2012 @ 9:10am

Doing Business in US makes you subject to US Law
I honestly don't know what the big debate is all about.
This IS NOT a foreign company, it is a Global Company.
If you do business in ANY country, you are subject to that Country's laws period.

"The filing focuses on how Megaupload had extensive operations in the US, including having many of its servers hosted here"
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G Thompson (profile), 18 Jul 2012 @ 9:15am

Re: Re: We are heading quickly down a slippery slope
You really cannot draw parallels here.

Unless of course you reside other than in the USA, then the parallels and the unequitable policies/statutes of the USA in regards to them vs "rest of the world" are striking!

How many US citizens are extradited each year to ANY country? hmmmm?

Defamation is a civil matter as is copyright (oh and yes Copyright can have a criminal component but strangely so can defamation and the bar is extremely high on both of them)
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Anonymous Coward, 18 Jul 2012 @ 9:15am

Re: Re: We are heading quickly down a slippery slope
Since the content generally comes from the US or involves a US company

That's pure hearsay. You have no idea where Megaupload's content generally came from, and you never will, assuming the DOJ gets away with destroying that evidence.
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Anonymous Coward, 18 Jul 2012 @ 9:20am

Re: Re: Re:
Only if you lie about what is happening there.
Than everything is easy.
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G Thompson (profile), 18 Jul 2012 @ 9:22am

Re: Re: Re:
People really didn't understand how the internet was being used to undermine local, state, and federal law in the US, and now they have a better idea.

When you acknowledge that that statement should be instead "People really don't understand how the internet might be used to undermine local, state, and federal law in all countries, and now they have a better idea" then we/I might have a meaningful conversationa and debate.

Until then your parochial nature is showing in that you want one law for the USA companies/citizens and another law for the rest of the world.

If the USA keeps going, especially if the mega case is lost (as it should be) then the rest of the planet will get to the point where the USA's economic existence will be in severe (if it isn't already) jeopardy since they will stop trading, supporting, or anything else the 5% that is the USA.

Start thinking holistically not US-centric when talking about international actions and consequences
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Anonymous Coward, 18 Jul 2012 @ 9:24am

Re: Re:
"How many thousands of dollars was spent on this stupid motion?"

... and how much longer does this sort of motion draw out the case, leading to Kim bitching about how long it takes?

More and more, he looks like a self serving twit.
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Ninja (profile), 18 Jul 2012 @ 9:26am

The whole case is a huge mess. The debate around is useless. WHERE IS THE EVIDENCE?

Nuff said.
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Anonymous Coward, 18 Jul 2012 @ 9:26am

Re:
You see people told congress what would happen if copyright was expanded again at the very, very least this is not the appropriate time to do anything, the MAFIAA poisened the public sentiment and granted monopolies are exclusionary in nature which means they can and are used routinely to undermine civil liberties which is an easy target, now I want to see any congress people try to do something that is against liberty and freedom and get away with it in the land of the free.

Even copycrap has limits, the public patience for it has run its course.

SOPA was just a taste to what it is to come, if idiots insist on this course of action, it will get uggly eventually and you don't want to be on the side of the MAFIAA that is not the side that is going to win this in the end, they don't have the man power to make it happen, they don't have the money and they don't have the influence and by that I don't mean political influence.
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Daniel Morritt (profile), 18 Jul 2012 @ 9:40am

Re:
Other countries would still have to sign up for it though, just because the US of A decide this is what they want, doesn't hold water with the rest of the world. We still have a lot of people that like our freedom from American prosecution, and that's not likely to change, America can't just decide the internet has to obey it's laws.
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Rikuo (profile), 18 Jul 2012 @ 9:42am

Re:
"Megaupload Ltd. is basically arguing that since they have no mailing address in the U.S. that can be used to mail a copy of the summons, they get to break whatever laws they want in the U.S. and the U.S. can't do a thing. "

I have no offices in Saudi Arabia and thus, I feel completely free to break whatever Saudi laws I want. MOHAMMED WAS A CHILD MOLESTER AND NOT THE PROPHET OF GOD.
Should I still be convicted under Saudi laws?

Megaupload never had offices or any physical presence in the US. Therefore, they are beyond US laws. That law that Kim's lawyers is quoting is important for a reason: its supposed to limit the US's authority to its own soil, not to the rest of the world.
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Rikuo (profile), 18 Jul 2012 @ 9:44am

Re: Doing Business in US makes you subject to US Law
"This IS NOT a foreign company, it is a Global Company."

What the hell is the definition of a global company? A company with offices and staff in every nation, including Antarctica?
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Anonymous Coward, 18 Jul 2012 @ 9:44am

Re: Re: Re:
New laws to enforce previous laws, which themselves enforce previous laws. Law law law.

I've got news for you, R. Daneel. Justice is not "that which exists when all the laws are enforced".
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Josh in CharlotteNC (profile), 18 Jul 2012 @ 9:49am

Re: Re: We are heading quickly down a slippery slope
as the material is distributed worldwide including back into the US.
and the content is made available in the US, there is plenty of standing.

...Wow.

That is exactly the same justification for the libel suits.

http://www.techdirt.com/articles/20120329/03303218286/uk-judge-attracts-libel-tourists-with-775k -award-to-new-zealand-cricket-player-over-defamatory-tweet.shtml
"The original Tweet was received by only a limited number of followers within England and Wales. One expert calculated that they numbered 95, the other 35. The parties have sensibly agreed that I should take the figure of 65."
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Anonymous Coward, 18 Jul 2012 @ 9:56am

Re:
The evidence is currently circling the drain.
I'm willing to go with Hanlon's razor on the DOJ wanting to destroy evidence that may or may not have looked bad for them, but I'm not sure how they intend to sue without evidence. Probably just scream "they were totally infringing!" and hope the judge buys it, then appeal a bunch of times if he doesn't.
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Rekrul, 18 Jul 2012 @ 9:58am

Re: Re: Re:
It's much easier to explain to a Senator or House member why new laws are needed to deal with the problem, because the structure and setup of Mega and it's sub companies shows how people can try to hide all their stuff offshore.

So what you're saying is that since US laws don't apply to the rest of the world, the US government will change its laws to ensure that they do apply world-wide?

If the prosecution of Mega doesn't get at least part of the way there, the laws will likely be changed to deal with the situation.

What situation? That other countries have their own laws which don't always line up with what the US government wants?
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Rekrul, 18 Jul 2012 @ 10:02am

Re:
Megaupload Ltd. is basically arguing that since they have no mailing address in the U.S. that can be used to mail a copy of the summons, they get to break whatever laws they want in the U.S. and the U.S. can't do a thing.

Can you please point out the federal statute that gives the US government the jurisdiction to file criminal charges against a foreign company operating in a foreign country?
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Anonymous Coward, 18 Jul 2012 @ 10:12am

Re: Re: Re: Re:
"So what you're saying is that since US laws don't apply to the rest of the world, the US government will change its laws to ensure that they do apply world-wide?"

No, not at all.

What I am saying is that US law (and the laws of most contries) are written to deal specifically with people who are physically in their jurisdictions. The internet changes that, making it possible for someone to be physically in another country, but operating a business or offering services directly to American citizens, right in their homes - with nobody responsible for those services actually being in the US.

So, as this example shows, the laws on "serving" business entities are perhaps not clear in regards to companies who exist only outside of the US, but who offer their services and products to Americans. Bringing those laws up to date, and plugging various loopholes that infringing sites use to play whackamole with is a key part of the US legal strategy going forward.

Like it or not, IP protectionism will only grow in the US as America goes further and further towards having an IP dependent economy.
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Anonymous Coward, 18 Jul 2012 @ 10:15am

Re: Re:
Perhaps you should read the embedded filing above, so you can see all the ties Megaupload Ltd. had in the U.S.: servers, banks, customers, etc. The issue you're reaching for is called personal jurisdiction. Google it.
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Anonymous Coward, 18 Jul 2012 @ 10:16am

Re: Re:
Megaupload Ltd.'s ties to the U.S. are outlined in the embedded filing. Give it a read.
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John Fenderson (profile), 18 Jul 2012 @ 10:20am

Re: Re: Re: Re: Re:
Like it or not, IP protectionism will only grow in the US as America goes further and further towards having an IP dependent economy.

I suspect this is correct. However, you should be hoping this doesn't happen, because the end result of it will be that the US will be increasingly marginalized and shut out of the world economy.
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Ninja (profile), 18 Jul 2012 @ 10:20am

Re: Re:
Precisely. They seized the equipment without a proper warrant (as the NZ courts found out and ruled later) and thus got hold of evidence on the infringing nature of the service. It's interesting that so far we are talking about a civil matter so far. They can't prove there was any infringing actions from the company itself in a massive scale.

Then they ramped up the accusations and introduced racketeering, money laundering and other accusations that are based precisely on the first mass infringement accusations. It is because of those criminal charges that the US Govt claims Kim Dotcom and his crew must be extradited to the US for a trial. Except that they can't PROVE the damned CIVIL charges to begin with. If you read the last few stuff related to the MU case you'll see that rulings in NZ address this issue. And I'm not even mentioning jurisdiction issues.

In the end the US Govt is already succeeding in killing the company which for me was the goal since the beginning. Putting Dotcom out of business (and behind bars just because they can) sends a serious chilling message all over the cyberlocker environment as we've seen. When this idiocy is over a few years from now and Dotcom is completely smashed to the ground under the burden of all the legal costs it won't matter if he won or lost. Courtesy of American taxpayers money.
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John Fenderson (profile), 18 Jul 2012 @ 10:23am

Re: Re: Re: Re: Re:
The internet changes that, making it possible for someone to be physically in another country, but operating a business or offering services directly to American citizens, right in their homes - with nobody responsible for those services actually being in the US.

This situation isn't new with the internet. The internet just makes it easier.

However, US law should not apply to such companies anyway. US law should only apply to US citizens or those operating in US territory. If the US decides that certain companies should not be allowed to service people in the US, then the only moral way to enforce this is to prosecute the people who are accessing the foreign services, not to try to prosecute the foreign services directly.
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John Fenderson (profile), 18 Jul 2012 @ 10:25am

Re: Re: Re:
All of which is legal justification for going after the us-based servers, banks, customers, etc. It is not justification for going after people in other countries.
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Josh in CharlotteNC (profile), 18 Jul 2012 @ 10:25am

Re: Re: Re:
People can understand cockroaches scurrying when the light is turned on. They can understand that Kim was trying really hard to keep his stuff across various jurisdictions to try to avoid the exact situation he finds himself in.

Even if you accept that Kim was doing something illegal (I don't), this is nothing new. Multinational corporations do this every day to limit their taxes burdens and legal liabilities.

Megaupload was siezed, and Kim was arrested for at worst civil copyright infringement. Yet HSBC was quite openly helping drug kingpins, terrorists, and rogue nations launder money, and the worst that has happened is that some of their executives resign from their positions with their fat golden parachutes intact.
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Anonymous Coward, 18 Jul 2012 @ 10:26am

Re: Re: Re:
well, if the laws get changed in the US, that will clarify the situtation, perhaps make companies base themselves offshore and clearly outside of US jurisdiction - instead of teh situation that we have right now, which is to declare something criminal after the fact. Megaupload, like other companies, was based on exisiting US law, including the digital millenium act.
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RD, 18 Jul 2012 @ 10:28am

Re: Re: Re: Re: Re:
"The internet changes that, making it possible for someone to be physically in another country, but operating a business or offering services directly to American citizens"

You DO realize that by just putting up a website on the internet, any company is providing its services to ANYONE ON THE PLANET, without regard for jurisdiction. The way you and the Corporate Government word this stuff, you are trying to change the perception of how the internet works from a "anyone can find/visit your site" to "promoting your stuff to a particular country/region." I'm sure all sites want to be accessible to the US and are interested in "offering their services" to US citizens, or the UK or whoever, but simply creating a site isn't the same as some kind of targeted business. To then use this as an argument to justify international jurisdiction of one country's laws into another is to fundamentally misrepresent how the internet works.
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John Fenderson (profile), 18 Jul 2012 @ 10:29am

Re: Doing Business in US makes you subject to US Law
If you do business in ANY country, you are subject to that Country's laws period.

This is certainly untrue as a blanket statement. If it were true, then if I sell my porn collection on eBay to someone in Guyana, the US should ship me there so I can serve my time in prison.
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Anonymous Coward, 18 Jul 2012 @ 10:32am

Re:
come on, you know full well why this rule exists...it's not just a technicality, and not ridiculous, but one of the cornerstones of private international law. It has suited the US to not have US companies prosecuted in foreign countries where they have caused substantial damage. The flipside of this is that foreign companies cannot automatically be prosecuted in the US - reciprocity applies. You can moan about the reversal of something that has protected US companies abroad for a long time, but that doesn't mean the principle isn't there for a reason.
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Anonymous Coward, 18 Jul 2012 @ 10:34am

Re: Re:
Here's the Supreme Court from the seminal case on personal jurisdiction:
Historically the jurisdiction of courts to render judgment in personam is grounded on their de facto power over the defendant's person. Hence his presence within the territorial jurisdiction of court was prerequisite to its rendition of a judgment personally binding him. Pennoyer v. Neff, 95 U.S. 714, 733, 24 L.Ed. 565. But now that the capias ad respondendum has given way to personal service of summons or other form of notice, due process requires only that in order to subject a defendant to a judgment in personam, if he be not present within the territory of the forum, he have certain minimum contacts with it such that the maintenance of the suit does not offend �traditional notions of fair play and substantial justice.� Milliken v. Meyer, 311 U.S. 457, 463, 61 S.Ct. 339, 343, 85 L.Ed. 278, 132 A.L.R. 1357. See Holmes, J., in McDonald v. Mabee, 243 U.S. 90, 91, 37 S.Ct. 343, 61 L.Ed. 608, L.R.A.1917F, 458. Compare Hoopeston Canning Co. v. Cullen, 318 U.S. 313, 316, 319, 63 S.Ct. 602, 604, 606, 87 L.Ed. 777, 145 A.L.R. 1113. See Blackmer v. United States, 284 U.S. 421, 52 S.Ct. 252, 76 L.Ed. 375; Hess v. Pawloski, 274 U.S. 352, 47 S.Ct. 632, 71 L.Ed. 1091; Young v. Masci, 289 U.S. 253, 53 S.Ct. 599, 77 L.Ed. 1158, 88 A.L.R. 170.45.

Since the corporate personality is a fiction, although a fiction intended to be acted upon as though it were a fact, Klein v. Board of Tax Supervisors, 282 U.S. 19, 24, 51 S.Ct. 15, 16, 75 L.Ed. 140, 73 A.L.R. 679, it is clear that unlike an individual its �presence� without, as well as within, the state of its origin can be manifested only by activities carried on in its behalf by those who are authorized to act for it. To say that the corporation is so far �present� there as to satisfy due process requirements, for purposes of taxation or the maintenance of suits against it in the courts of the state, is to beg the question to be decided. For the terms �present� or �presence� are *317 used merely to symbolize those activities of the corporation's agent within the state which courts will deem to be sufficient to satisfy the demands of due process. L. Hand, J., in Hutchinson v. Chase & Gilbert, 2 Cir., 45 F.2d 139, 141. Those demands may be met by such contacts of the corporation with the state of the forum as make it reasonable, in the context of our federal system of government, to require the corporation to defend the particular suit which is brought there. An �estimate of the inconveniences' which would result to the corporation from a trial away from its �home� or principal place of business is relevant in this connection. Hutchinson v. Chase & Gilbert, supra, 45 F.2d 141.

**159 67 �Presence� in the state in this sense has never been doubted when the activities of the corporation there have not only been continuous and systematic, but also give rise to the liabilities sued on, even though no consent to be sued or authorization to an agent to accept service of process has been given.
Int'l Shoe Co. v. State of Wash., Office of Unemployment Comp. & Placement, 326 U.S. 310, 316-17 (1945) (emphasis added).

The federal law that gives the U.S. government jurisdiction to prosecute violations of U.S. law is the very law that Megaupload Ltd. is being prosecuted under. They are listed on the face of the indictment. (You can Google it.) Those laws, in turn, are created pursuant to powers granted to Congress under the U.S. Constitution itself. See U.S. Const. art. III.

The extent of a court's jurisdiction is limited by the Due Process Clause. U.S. Const. amend. V. And that analysis begins by reading International Shoe (which is still good law, but it's not the only good law on the subject).

Answer your question?
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Anonymous Coward, 18 Jul 2012 @ 10:36am

Re: Re: Re: Re:
Wait, you want to go after the innocent intermediaries?
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Ninja (profile), 18 Jul 2012 @ 10:41am

Re: Re: Re:
I don't think the head o General Motors US would get criminal charges for something done in General Motors Argentina.

They rented servers in the US yes but let us consider for a moment you are using a rented server in Saudi Arabia and you host Mohammed caricatures like the Danish thing (with a bomb in his head). Technically you are violating Saudi Arabia laws but should you be extradited there? I don't think so. And given that the content MU had on US servers was most likely used and uploaded by US citizens then it's those people that are responsible for whatever infringements that happened. Considering MU complied DMCA takedown notices even though it wasn't obliged to under NZ laws or wherever their headquarters are.

Having economic ties to a country doesn't automatically subject you to the laws of that country. Before asking for extradition the US has to PROVE there were any crimes committed.
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Anonymous Coward, 18 Jul 2012 @ 10:51am

Re: Re:
I think the leasing of servers based in the district is really going to kill them in the jurisdiction fight. This is a substantial business relationship critical to their operation.

Otherwise, they have few ties to the VA district. Most of the other business relationships are shallow or in other districts.

The available in the US argument is full of issues and can really bite the US in the butt later. Basically anything on the internet can be viewed in any country, so if that was all that was required for jurisdiction US companies would be subject to potential legal issues in any country in the world. Same with money via a service like paypal. Paypal doesn't care where you are, only that you have a legitimate way to pay.
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Anonymous Coward, 18 Jul 2012 @ 10:55am

Re: Re: Re: Re:
Part of the thinking goes like this. Since Megaupload Ltd. took advantage of the U.S. legal system by doing so much business in the U.S., including the server farms, all the customers (each one a separate contract and point of contact), bank accounts, etc. Heck, apparently even megaupload.com's own terms of service selected California as a venue for disputes thereunder. Megaupload got all the benefits of U.S. law for all of these different contacts. The reverse side of the coin, though, is that each contact establishes that it's reasonable to hold Megaupload accountable in the U.S. as well. In other words, the cost of doing business in the U.S. is that if you get the rights AND the responsibilities. Megaupload Ltd. made millions of dollars from it's criminal dealings in the U.S. The argument that they're not liable for their crimes here is ludicrous.
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Anonymous Coward, 18 Jul 2012 @ 11:00am

Re: Re: Re:
The server farm seals it for sure.
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Dave Reed, 18 Jul 2012 @ 11:13am

Re: Re: Re: Closing Megaupload
That's the key point. On this issue the RIAA and the MPAA have already won. Megaupload is off the net and other lockers have changed/degraded their service or just plain closed.

I think, at this point, the MAFIAA and their puppets in the DOJ don't CARE whether Kim Dotcom wins, loses, comes to America or heads off to Antarctica. They DO want to scare him, to burn thru his resources (or lock 'em up where he can't get them.) His value to them is as scarecrow.

And on that issue; the battle is over and the bad guys won.

The only way the bad guys lose is if Megaupload rises from the dead. If he manages to get back online AND gets a judgement against his persecutors then he becomes a hero to the other lockers and a trailblazer in 'how to profit from getting arrested'. If he just gets out clean, then the chilling effect on other business will still exist.

I expect this won't stop cyberlockers from starting up. It will just stop 'em from offering their services to the US.
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Rabbit80, 18 Jul 2012 @ 11:18am

Re: Re: Re: Re:
You get my vote!
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Ninja (profile), 18 Jul 2012 @ 11:20am

Re: Re: Re: Re: Re:
Megaupload Ltd. made millions of dollars from it's criminal dealings

Where is the evidence?
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Anonymous Coward, 18 Jul 2012 @ 11:20am

I can hardly wait for the upcoming lawsuits and extraordinary renditions that will be filed against US persons/companies for violating other countries' laws. Maybe lawsuits and criminal prosecution against US oil companies violating foreign environmental laws?
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Rikuo (profile), 18 Jul 2012 @ 11:21am

Re: Re: Re: Re: Re:
" Megaupload Ltd. made millions of dollars from it's criminal dealings in the U.S."

So you've just pronounced them guilty without a trial or evidence? Haven't you been following the MU story at all, of how much fail there has been on the part of the prosecution? I sincerely hope you're not a lawyer or judge.
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Rikuo (profile), 18 Jul 2012 @ 11:23am

Re: Re: Re: Re: Re:
So they're innocent? The people uploading copyrighted works to MU are now innocent of copyright infringement but MU itself is still somehow guilty?
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The eejit (profile), 18 Jul 2012 @ 11:55am

Re: Re: Re: Re: Re:
So the solution is idiotically simple: don't try to extradite them. If there is no solid evidence of having jurisdiction (i.e. the physical location where the "crime" occurred, which would be the Chinese province of Hong Kong), then they shouldn't ba able to be touched by other laws, provided no other crimes took place in that country.
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Anonymous Coward, 18 Jul 2012 @ 12:15pm

Re: Re: Re: Re:
Who outside the walls of Fortress America Inc. gives flying fig about American "federal statutes"? (For the next sentence, the well-known American expression involving the phrase "where the sun don't shine" comes to mind.)
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Anonymous Coward, 18 Jul 2012 @ 12:45pm

Re: Re: Re:
"More and more, he looks like a self serving twit."

More and more, he looks like an innocent man being unduly persecuted...I mean prosecuted.
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PRMan, 18 Jul 2012 @ 12:47pm

Re: Re:
It's not dumb at all. It's (correctly) limiting US law to, you know, people who have AN ADDRESS IN THE US!!!
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Anonymous Coward, 18 Jul 2012 @ 12:55pm

Re: Re:
Got a link to this cornerstone of private international law?
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Thomas (profile), 18 Jul 2012 @ 1:10pm

Just what they are paid to do..
the entertainment industry owns enough attorneys in the DOJ and slips LOTs of money into the right pockets so that DOJ will come up with whatever contorted explanation they think will be believed.

I used to think government agencies like DOJ (and FBI/NSA/CIA) were not open to bribes, but I guess those days are long gone. Still wonder what size of bribes are needed?
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The Spork (profile), 18 Jul 2012 @ 1:26pm

Re: Re: Re: Re:
AC's claim that Mega is a criminal enterprise. That has not yet been proven in the court of law therefore your pitiful ramblings are moot, troll. until the DOJ Shows the evidence that Megaupload Ltd. is indeed a criminal enterprise, I reserve that ALL accusations related to the so called "Mega Conspiracy" are false because they are SUPPOSED to be considered Innocent until proven Guilty.
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John Fenderson (profile), 18 Jul 2012 @ 1:49pm

Re: Re: Re: Re: Re:
I don't want anyone to go after anybody who is innocent. If someone is breaking the law of the land they are in, then those people should be the ones getting the attention of law enforcement, not anybody else.
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John Fenderson (profile), 18 Jul 2012 @ 1:53pm

Re: Re: Re: Re: Re:
I hit submit too soon. In the case of the intermediaries, its' not really "going after" them, it's requiring that they stop doing business with the service.

I'm saying that if an entity in country A is doing something legal there, but illegal in country B, then the wrong way to deal with this is to try and attack that entity directly. If something really must be done, then that something must be limited to things in country B. Defensible actions would be to make it illegal for entities in B to do any business with the entities in A.
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That One Guy (profile), 18 Jul 2012 @ 1:55pm

Re: Just what they are paid to do..
I think the bribes in cases like these aren't so much 'X amounts of dollars', as that would be traceable and could get them in hot water, but a simple 'if you do this for us, when you stop working where you are now you'll have a nice, multi-million dollar a year job waiting for you with us'.

That way there's no paper trail that might lead back to anyone, just a verbal or implied contract, which would be all but impossible to prove or prosecute in court unless an investigator managed to get a recorded conversation or something flat out admitting it.
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Anonymous Coward, 18 Jul 2012 @ 1:59pm

Re: Re: Re: Re: Re:
Well, there was evidence presented to a grand jury which then returned an indictment: http://www.washingtonpost.com/wp-srv/business/documents/megaupload-indictment.pdf

You are correct to point out that they haven't yet been convicted. That much is obvious. And of course they are presumed to be innocent. But the fact is that there is enough evidence that they're not innocent that an indictment was handed down. An arrest warrant was issued, and extradition is in the works. While they haven't been convicted, there is certainly evidence one may draw conclusions from.
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Anonymous Coward, 18 Jul 2012 @ 2:01pm

Re: Re: Re: Re: Re: Re:
Some of it is mentioned here: http://www.washingtonpost.com/wp-srv/business/documents/megaupload-indictment.pdf

And the rest is in the hands of the DOJ. Where else would it be? Not sure you understand how this works...
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Anonymous Coward, 18 Jul 2012 @ 2:06pm

Re: Re: Re: Re: Re: Re:
Sigh. I've read the evidence in the indictment, and I've drawn my own conclusions. Yes. I have been following the case. Sites like Techdirt love to make it sound like the whole thing is in shambles. Don't believe everything you read, especially from pirate-apologist sources.
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Anonymous Coward, 18 Jul 2012 @ 2:11pm

Re: Re:
And how do you explain this bit from the Supreme Court explaining when there's personal jurisdiction over a foreign corporate defendant?

The Due Process Clause of the Fourteenth Amendment operates to limit the power of a State to assert in personam *414 jurisdiction over a nonresident defendant. Pennoyer v. Neff, 95 U.S. 714, 24 L.Ed. 565 (1878). Due process requirements are satisfied when in personam jurisdiction is asserted over a nonresident corporate defendant that has �certain minimum contacts with [the forum] such that the maintenance of the suit does not offend �traditional notions of fair play and substantial justice.� � International Shoe Co. v. Washington, 326 U.S. 310, 316, 66 S.Ct. 154, 158, 90 L.Ed. 95 (1945), quoting Milliken v. Meyer, 311 U.S. 457, 463, 61 S.Ct. 339, 342, 85 L.Ed. 278 (1940). When a controversy is related to or �arises out of� a defendant's contacts with the forum, the Court has said that a �relationship among the defendant, the forum, and the litigation� is the essential foundation of in personam jurisdiction. Shaffer v. Heitner, 433 U.S. 186, 204, 97 S.Ct. 2569, 2579, 53 L.Ed.2d 683 (1977).8

Even when the cause of action does not arise out of or relate to the foreign corporation's activities in the forum State,9 due process is not offended by a State's subjecting the corporation to its in personam jurisdiction when there are sufficient contacts between the State and the foreign corporation. Perkins v. Benguet Consolidated Mining Co., 342 U.S. 437, 72 S.Ct. 413, 96 L.Ed. 485 (1952); see Keeton v. Hustler Magazine, Inc., 465 U.S. 770, 779�780, 104 S.Ct. 1473, 1480�1481, 79 L.Ed.2d 790 (1984).
Helicopteros Nacionales de Colombia, S.A. v. Hall, 466 U.S. 408, 413-14 (1984) (emphasis added).

Seems like exercising jurisdiction over foreign corporate defendants is settled law. I'm curious how you reconcile that with what you're saying.
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Rikuo (profile), 18 Jul 2012 @ 2:23pm

Re: Re: Re: Re: Re: Re: Re:
What "evidence"? The indictment included lovely bits like saying that Megaupload paying their Carpathia bills was evidence of money laundering. So I guess you shouldn't believe everything you read, especially from corrupt organizations.
So tell me, is the case in shambles? Here's a few things that should destroy the case
1) Warrants were illegal
2) Feds copied data from Kim's hard drives without letting NZ authorities know, AND most importantly, refuse to let Kim see that data as part of his defense
3) Feds Have said that Kim can't choose his own defense team.
4) Feds are making up laws to suit the charges
http://www.techdirt.com/articles/20120530/16055119130/megaupload-filings-show-massive-flaws -us-case-ask-court-to-dismiss.shtml
4)
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Rikuo (profile), 18 Jul 2012 @ 2:26pm

Re: Re: Re: Re: Re: Re:
That indictment? There's already been enough holes picked in that that it is laughable that you point to that in support of your argument .
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Anonymous Coward, 18 Jul 2012 @ 2:46pm

Re: Re: Re: Re: Re: Re: Re:
The fact remains that the case is still being prosecuted. If it was so full of holes, there wouldn't still be a case.
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Anonymous, 18 Jul 2012 @ 3:02pm

They have more important things to do, like running guns to Mexican drug gangs.
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DCX2, 18 Jul 2012 @ 3:11pm

Re: Re: Re: Re: Re: Re: Re: Re:
So you buy that whole money laundering charge? You really think that's serious?

Because without the money laundering charge, everything falls apart. It hinges entirely on the idea that paying Carpathia for the servers is money laundering, which makes this a criminal act. No money laundering, no criminal act. No criminal act, no extradition. No extradition, game over.
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DCX2, 18 Jul 2012 @ 3:14pm

Hmm
Ruin the world economy, scam billions of dollars from people's pensions, forge documents for foreclosure...no penalties at all.

Allegedly facilitate copyright infringement that numbers at most hundreds of millions? Extradited, tarred, feathered, imprisoned.

Thank you, Federal Government, for demonstrating your priorities.
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Anonymous Coward, 18 Jul 2012 @ 4:24pm

Re: Re: We are heading quickly down a slippery slope
Because of the internet, libel happens everywhere with the internet if it happens anywhere with the internet. People libled in the US are just as libeled to readers in London when they go online and read the libel.

If the excuse holds for one, then it holds for the other.
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Anonymous Coward, 18 Jul 2012 @ 4:29pm

Re:
Wow, how classy.
The US is now a such a rogue state with such a lawless government that we should just hope someone is arbitarily persecuted for at the whim of their pay-master over lords because otherwise the government will terrorize the people, destroy innovation, and act corruptly on a heretofore unseen level to give their cartel cronies what they demand?

And that's all cool with you?

Classy.
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That Anonymous Coward (profile), 18 Jul 2012 @ 6:15pm

Re: Doing Business in US makes you subject to US Law
Then why did Steve Jobs not die in prison for violating Child Labor laws?
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JMT (profile), 18 Jul 2012 @ 6:32pm

Re: Re: Re: Re: Re:
"Like it or not, IP protectionism will only grow in the US as America goes further and further towards having an IP dependent economy."

That sounds like a road to economic ruin, for two obvious reasons. The backlash against IP protectionism has already started and it too will continue to grow in direct response. And any economy that depends on 'imaginary property' in a world where digital data or already infinitely reproducible and physical goods are continually getting easier to copy (e.g. 3D printing) is setting itself up for failure.
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Chargone (profile), 18 Jul 2012 @ 6:56pm

Re: Re: Doing Business in US makes you subject to US Law
actually, being in antarctica is interesting: a number of countries claim jurisdiction over various parts of it (the largest (mostly) undisputed claim belonging to New Zealand, actually (lots of claims overlap at the edges)).
the US refuses to acknowledge any such claims, except it's own (which is 'everything... if we ever decide we actually want it.') and i Think Russia (or the USSR at least) refused to acknowledge the idea that Anyone could have a claim. (i may be misremembering, look that one up.)

there's currently a treaty in force that renders the Consequences of such claims to be absolutely zero (beyond who's courts you end up in if you murder someone down there or something... and that depends mostly on who owns the base and where you're from, not the territory, anyway... with good odds of ending up in an NZ court no matter which way you slice it.)
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Chargone (profile), 18 Jul 2012 @ 6:57pm

Re: Re: Doing Business in US makes you subject to US Law
not only that, but an aweful lot of US corporations would be completely fucked, i suspect.
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Anonymous Coward, 18 Jul 2012 @ 8:43pm

Re: Re: Re: Re: Re: Re:
Yes, I understand the basic workings of the internet. It's that basic working that is a real issue for governments all over the world.

"To then use this as an argument to justify international jurisdiction of one country's laws into another is to fundamentally misrepresent how the internet works."

The issue is that when a US citizen interacts with these websites, it does in some way become a jurisdictional issue.

Look at it this way: if Mega's service would be specifically illegal if operated in the US (and that appears to be the case), why should US law be usurped by them moving offshore and continuing to offer that same service in the US?

The laws of almost every country on the planet were not written with this sort of consideration.

The fact is that when you put a website on the internet, it is available to everyone - unless you specifically take action to limit it's availability. Mega could have chosen to exclude the US from it's business, in the same manner that most poker sites now do. They did not.
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Anonymous Coward, 18 Jul 2012 @ 9:22pm

Re: Re: Re: Re:
Umm, I am not suggesting that it is "US only", rather it is in the context of law US law and the process of lawmaking inside the US.

The point is only that while SOPA may have failed because of a public outcry, I feel that if the Mega process fails because of something that might have been handled under SOPA, that it will be used as a way to "teach" those in Washington who opposed the bill that they were "wrong" to do so, and that US interests are being harmed.

SOPA failed in part because the bad being addressed wasn't well defined. There was no specific target, no outrage to counter the (hyped up) fear of "censorship" that was pushed by this site and others. The issue was a ghost, not a specific person, site, or situation.

"Start thinking holistically not US-centric when talking about international actions and consequences"

When it comes to the IP world, especially in entertainment, the US is the big stick. Things are very much US centric here. The biggest movies? They aren't coming out of New Zealand, although some Hollywood companies have shot movies there. It would be incredibly hard right now to imagine a world with no US based IP. If it turned off tomorrow, there would be a huge hole that would take a very long time for others to fill, and possibly never to the same levels.

Quite simply, the US is the biggest player, with the most of lose if things are not going their way. It's impossible not to consider things in a US centric way as a result.
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techflaws (profile), 18 Jul 2012 @ 10:56pm

Re: Re: Re:
how the internet was being used to undermine local, state, and federal law in the US

Which thankfully does not (yet) apply elsewhere. The fact that you seem to think other countries will not retaliate with applying their laws to US citizens using the same justifications is staggering.
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techflaws (profile), 18 Jul 2012 @ 11:15pm

Re: Re: Re: Re: Re:
None of which justifies the US extending their laws to the rest of the world. Other nations finally took notice and start pushing back.
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techflaws (profile), 18 Jul 2012 @ 11:19pm

Re: Re: Re: Re: Re: Re: Re:
The laws of almost every country on the planet were not written with this sort of consideration.

And for good reason which is what you seem to be unable to grasp. There is no logic in applying one country's laws beyond its borders. If the US could do this, so could Iran or Jemen. If you don't see the danger in this, you can't be helped.
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techflaws (profile), 18 Jul 2012 @ 11:24pm

Re: Re: Re: Re: Re: Re: Re:
Don't believe everything you read, especially from pirate-apologist sources.

Yeah, we rather believe shills that defame others as pirate-apologist sources who just happen to believe any bullshit their being fed. You would draw better conclusions if you wouldn't take anything the US prosecution (of all people) spins as fact.
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techflaws (profile), 18 Jul 2012 @ 11:27pm

Re: Re: Re:
So just because the US court says, its law applies to other countries, those other countries must simply bow down to it? That completely convices everyone.
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techflaws (profile), 18 Jul 2012 @ 11:29pm

Re: Re: Re: Re: Closing Megaupload
And on that issue; the battle is over and the bad guys won.

Piracy has stopped. Mission accomplished.
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Anonymous Coward, 19 Jul 2012 @ 12:47am

Re: Re: Re:
Wow, you give Americans a bad name. When they talk about entitled Americans, they mean you. The majority of the world are not hiding off shore from America. Most businesses in the world operate exclusively outside America. You're literally nuts.
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Anonymous Coward, 19 Jul 2012 @ 12:49am

Re: Re: Re: Re: Re:
It's fucking movies not food and shelter you moron.
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Anonymous Coward, 19 Jul 2012 @ 12:52am

Re: Re: Re: Re: Re:
The laws are perfectly clear. The legislators deliberately made it so civil suites could be served against such foreign businesses outside their jurisdiction and limited criminal jurisdiction to exclude them.

It coudn't be any simpler. This is possibly because they did not want the USA to become the next Cuba. No one will want do business with US businesses if it exposes them criminalization under US laws. Possibly there was a time your legislators thought the economy mattered.
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Tim Griffiths (profile), 19 Jul 2012 @ 4:28am

Re: Doing Business in US makes you subject to US Law
"If you do business in ANY country, you are subject to that Country's laws period."

One word, tax.

How many companies that trade or even are otherwise based in the US technically exist in a mailbox in a building with a bunch of other mailboxes on some island somewhere so they can avoid US tax rates?

If what you are saying it true then they should all be arrested and put in jail.
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Anonymous Coward, 19 Jul 2012 @ 6:13am

Re: Re: Re: Re: Re: Re: Re: Re:
A case being prosecuted is not a sign that a case is not full of holes. The prosecution knows that if they don't go through with the case they effectively took down a company on bogus claims; going through with the case is the only way they can remain legitimate, despite repeated procedural fuckups.
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Rekrul, 19 Jul 2012 @ 7:02am

Re: Re: Re: Re: Re:
What I am saying is that US law (and the laws of most contries) are written to deal specifically with people who are physically in their jurisdictions. The internet changes that, making it possible for someone to be physically in another country, but operating a business or offering services directly to American citizens, right in their homes - with nobody responsible for those services actually being in the US.

So, as this example shows, the laws on "serving" business entities are perhaps not clear in regards to companies who exist only outside of the US, but who offer their services and products to Americans. Bringing those laws up to date, and plugging various loopholes that infringing sites use to play whackamole with is a key part of the US legal strategy going forward.

Nude photos of women are illegal in most middle east countries. Companies like Playboy put such photos up on the net where they can accessed by anyone in the middle east. Therefore, by your logic the governments of any/all middle east countries should be able to criminally charge Playboy and its executives for violating their laws.

Or is the US somehow special? Do we get to enforce our laws against foreign companies while US based companies can violate the laws of other countries with impunity?
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edinjapan (profile), 19 Jul 2012 @ 10:42am

Re: Re:
This does open up a major can of worms. What would stop the Russian Federation from sending in a company of Spetsnaz and a few of the Special Prosecutors from their Ministry of Justice on the sly to "arrest" and "extradite" US businessmen accused of committing crimes in Russia?

Could you see the shitstorm that would ensue as a official spokesperson from the Russian Federation goes live on CNN as the raid is being carried out at the company HQ and the board, Chairman, CEO and his executive staff are being shown being arrested by the Russians and having the Russians stating that they are using the same precedents as created by the DOJ in their prosecution of Megaupload.
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Anonymous Coward, 21 Jul 2012 @ 12:22am

Re: Re: Re: Re: Re:
I hate to be two days late, but if mega is you biggest villain you got a problem. Kim didn't force anyone to go there hundreds of millions of people chose to go there daily.
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Corby (profile), 4 Oct 2012 @ 2:33pm

Re: Re: Re: Re: Re: Re: Re:
So you have seen and read all evidence and documentation with your own eyes or are you just reading and thinking that everything in the Indictment must be true?

None of the Evidence and documentation given and stated in the Indictment or gathered by the FBI etc has been proven as actual fact or proved as true in a court of law. It is so easy to trawl through documentation and take out all the shit and dirt from it to show that the person is guilty etc when in actual fact the person is innocent. The FBI can trawl through Little Red Hiding Hood and make her come across to be a psychotic schizophrenic murdering psycopath but on seeing all the film she is just a sweet innocent girl.
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