Court Says Case Against Megaupload Can Continue, Despite Not Being Able To Serve The Company
from the moving-on dept
We've covered one of the sideshow issues in the larger Megaupload case: whether or not the US DOJ could get away with charging Megaupload (the company) without it being located in the US. This wouldn't have impacted the individuals who were indicted separately, but the case against the company entity itself ran into a problem. Since Megaupload has no corporate presence in the US, and the letter of the law is pretty clear that you have to serve companies accused of criminal law violations in the US, there were concerns if Megaupload could even be charged. The DOJ argued that none of this mattered, because in spirit, it should be able to treat foreign companies as if they're in the US. Megaupload hit back, noting that the DOJ shouldn't get to just make up what it thinks the law should be when the law says otherwise.Unfortunately -- but perhaps not too surprisingly -- the court has sided with the DOJ, saying that the case against Megaupload, the company, can move forward, even though the company was not served in the US.
Judge O'Grady echoes the government's belief that the rules weren't intended to be interpreted for the evasion of foreign defendants. He writes, "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."I can see the judge's reasoning here, but it seems like a pretty slippery slope argument, basically allowing some pretty broad powers to the US to go after countries all around the world. Imagine how the US government would act if other governments around the globe claimed the same thing? It seems that if Congress really intended the DOJ to be able to go after foreign companies, then it should have made that clear in the law.
The judge goes onto to make his own interpretation of Rule 4, saying that mailing a summons to the address of corporation's alter ego is the same as mailing the summons to the corporation itself. Often, that means mailing it to the domestic subsidiary of the foreign company; here, it could mean Kim Dotcom if he's ordered to be extradited at a later point.
"So long as the government could prove that an individual defendant is an alter ego of the corporate defendant, the government could satisfy Rule 4's mailing requirement by mailing a copy of the summons to one of the individual defendants once that defendant is extradited to this district," writes the judge.
It sounds as though Megaupload is planning to appeal this ruling, to get a higher court to look into this issue.
In the end, though, this still remains a tangential issue, and one that doesn't impact the case against the individuals. But, for now, the government's argument has won the first round.
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Filed Under: doj, jurisdiction, kim dotcom
Companies: megaupload
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Ham Sandwich Award
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A Slogan for the Ages
I think that should be our national slogan. I don't know, maybe slap it on a logo with a motherfucking eagle or something. That's what we're all about
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Re: A Slogan for the Ages
"America - ignoring the sovereignty of other countries just because we feel like it, since 1776, bitches!"
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Re: A Slogan for the Ages
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Re: A Slogan for the Ages
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U.S. world law
So let me get this straight, the judge thinks that everyone in the world has to obey U.S. laws? If I don't live in your country, I can break any stupid law you make all I dang well please! What the heck makes this judge think Congress even has the power to choose whether or not to "approve" a law that would try to force the entire world to bow to U.S. wishes???
The only thing at issue here is that people in the U.S. were able to do business with a corporation that was outside the U.S. without having to actually go there, and we apparently can't handle that idea.
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Re: U.S. world law
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Re: Re: U.S. world law
If you do not want US jurisdiction then DO NOT use .com or have a US bank account. Meggaupload did both of these and look what happened.
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The US Judge in his infinite parochial wisdom (/sarc) has just wiped out centuries of comity which is great it means I can take action against any US company that breaks Australian trade & consumer laws that doesn't have a presence within Australia.
Amazon here I come!
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Re: Re: Re: U.S. world law
Large corporates may assess the risks and determine that the profit potential outweighs them, but it seems as though America is going to shaft it's small businesses, creators and consumers in the long run when the state effectively becomes an isolated kingdom.
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Re: Re: Re: Re: U.S. world law
That would also suggest foregoing US customers as well... and foregoing all US created content as well.
I think Mega probably would have been a failure without all of those things.
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Re: Re: Re: Re: Re: U.S. world law
I think Mega probably would have been a failure without all of those things.
The US holds 5% of the worlds population, 25% of the worlds population reside where the countries economy is actually BETTER than the USA's.
hmmmmm I Wonder where it's actually more profitable and more logical to do business. Yep NOT the USA
Oh and US created content is becoming less and less relevant nowadays. In fact even Hollywood is relying on foreign ideas to use/steal.
Most internet business models of companies outside the USA actually do not rely on selling to the USA at all and would rather sell to places like India, Russia, Asia (central and SE) and Oceania and South America. Better market, more potential for growth, and less political bullshit when dealing with innovative technologies.
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Re: U.S. world law
No, the judge is saying that if you do business in the US, you are subject to US laws, plain and simple.
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Re: Re: U.S. world law
Are they now subject to Chinese law?
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On the plus side, that means that the UK can now shut down NewsCorp, whose registered Head Offices are in NY.
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At what point does Dotcom not equal Megaupload? If Dotcom = Megaupload, then surely, logically, the rule about needing a US address would apply to Dotcom the person...wouldn't it? Then he can't be extradited. The US courts can't have it both ways - they can't say the person equals the company, so the company can be charged, because if they say that, then the person can't be charged!
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That depends. Was any MAFIAA content involved?
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A bad precedent...
The Supreme Court is hearing a case about Shell being charged in Nigeria for crimes of torture.
Now we have someone saying a business can be charged in the US with no precedence in the US. Which is it? Can we discriminate against businesses that are foreign or are they all the same?
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Re: A bad precedent...
Well, sure, torture and killing of environmental activists is serious, but it's not like it's a crime against copyright (horrors!) involving the interwebs.
Now, if it had been a case of cyber-torture, on the other hand...
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Re: Re: A bad precedent...
Force them to get on 4-chan's /b/ board for a few hours.
THEN they'll know what cyber-torture is.
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Re: Re: Re: A bad precedent...
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Whats the point
Another nail in the coffin of corporate personhood, from the mouth of a horse which thinks they are people.
I also would like to note that if you want them to be subject to US laws, they are also subject to Innocent until proven guilty assumptions, which obviously isn't the case in the above quote.
What is the point of charging Megaupload as a company anyway? You can't close them down because they exist in another country. You can't fine them because you have all the assets. Seizing the assets? Already been done. What punishment can you assess against Megaupload in this trial?
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Re: Whats the point
But more specific to MU, I suspect that the goal is not to punish them any further as a company, the goal is to set a world-wide precedent and warning: "Don't mess with our Hollywood Sponsors".
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Re: Re: Whats the point
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Re: Whats the point
The court looks at a case and awards a temporary restraint on the ISP. (Temporarily unlimited so far. It has been in place for more than 10 years in some cases like thepiratebay!).
So far it has been seen as enough to DNS-block the site, but in a certain case where the ISP was not impartial (they have a competing service to grooveshark!), they used a "soft" DPI-technology to restict mobile phones from entering the site!
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While I agree that the U.S. is acting abusively against Megaupload, there are other situations where U.S. law is fairer than law in other countries, and the court system stronger. People have attempted to use U.S. courts to correct injustices that were committed elsewhere.
A particular example I have in mind -- I've forgotten the details -- concerned a South Korean company that was mistreating its employees, among other things not paying them. It was a typical abuse in South Korea, a country with weak labor protection (this was the 1980s) and a lot of corruption. The legal environment for labor issues was better in the U.S. Also, there was an arguable U.S. connection, like in the Megaupload case. I can't remember what it was, but among other things, the top guy of the company (or a company that wholly owned the company) lived in the U.S. and was visited there by some activists.
In the end, the court favored the more entrenched and powerful party, the South Korean company, against the poor workers, throwing the case out for lack of jurisdiction. It failed to qualify under the Alien Tort Claims Act of 1789.
The jurisdiction in that case had a different legal basis than the Megaupload case. But it leads us to suspect that if a court tries to pull Megaupload into U.S. liability, it could have unintended consequences, and they might not all be bad.
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"The United States has less than 5% of the world's population, yet has over 75% of the world's prisoners."
Pretty f*cked up when you think about it.
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"The United States has less than 5% of the world's population, yet has over 75% of the world's prisoners."
Pretty f*cked up when you think about it.
To be fair, if we had the same execution rate as some of those other countries, our prisons would have much more room.
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If Megaupload does business in the US, then it's IN the US.
The judge's logic isn't difficult to follow: Megaupload was doing business here -- getting money transfers, that is, from members for pirated data -- and no reasonable construction of law would make a corporation immune merely because it didn't establish an address here.
You're all just SO upset that one of the major pirate sites got shut down.
You should note that I pretty much predicted moves against "file hosts" last year, hint, hint.
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Re: If Megaupload does business in the US, then it's IN the US.
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Re: If Megaupload does business in the US, then it's IN the US.
At the moment Megaupload has not been found guilty or proved to be guilty in a court of law for being a major pirate site. Obviously Megaupload is guilty until proved innocent in your case. I doubt that Kim Dotcom will be extradited because of all the illegal action commited so far by both US and NZ in this case, the warrant, search, raid, transfering of data to US and now spying have all been ruled to being illegal. If there is no extradition then there will be no court case and Megaupload will not have been found or even proved to be juidciary guilty of anything.
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Re: If Megaupload does business in the US, then it's IN the US.
As for "Easy rule: follow the money"
You're a fucking moron for having said that. The US indictment "followed the money" and said that Megaupload paying its bill to Carpathia was evidence of money laundering. So please forgive me for pointing my finger at my head and rotating it, indicating you are insane.
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Re: Re: If Megaupload does business in the US, then it's IN the US.
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Re: Re: If Megaupload does business in the US, then it's IN the US.
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Re: Re: If Megaupload does business in the US, then it's IN the US.
In the extremely likely event you are simply parroting the official TD talking points, I invite you to read the indictment so as not to appear a complete fool.
http://www.scribd.com/doc/78786408/Mega-Indictment
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Re: If Megaupload does business in the US, then it's IN the US.
Megaupload ranked 7th, at best. So why go for low-hanging fruit if they have so much proof?
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Re: Re: If Megaupload does business in the US, then it's IN the US.
But then again, Dotcom is the one that was about to make the labels obsolete with the Megabox, and we can't have all those campaign dollars dry up and vanish, now can we?
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Re: Re: Re: If Megaupload does business in the US, then it's IN the US.
Of course, what they hadn't expected that whatever kind of character Kim Dotcom is, it couldn't overshadow the huge leaps and bounds in legal oversight they had to make just to SWAT team his house.
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Re: Re: Re: Re: If Megaupload does business in the US, then it's IN the US.
Of course, his previous convictions on crimes that amount to playing fast and loose with money and the law don't hurt either.
Quite simply, Kim is a bit of an asshole, and even in the pirate / file sharing community, he doesn't have great standing.
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Re: Re: Re: Re: Re: Re: Re: If Megaupload does business in the US, then it's IN the US.
At least half of the support voiced for the prosecution here is, however, based on him being an asshole.
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Re: If Megaupload does business in the US, then it's IN the US.
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Re: Re: If Megaupload does business in the US, then it's IN the US.
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Re: Re: If Megaupload does business in the US, then it's IN the US.
I made a key point that there is no real punishment you could impose on Megaupload, as a company. Its hard enough punishing US corporations. Any assets not already held by the justice department after its increasingly illegal activities will be difficult to seize or garnish. You can't dissolve the corporation. Shutting down Megaupload permanently has either already been done, would be done with Kim Dotcom being convicted, or won't happen. Because any further punishment comes down squarely on Kim Dotcom's head anyway.
Nothing you can do to Megaupload as a company will prevent it from committing piracy with any greater efficacy then punishing Kim Dotcom and his partners. The legal loopholes the court jumped through to define Kim Dotcom as Megaupload so they can serve Megaupload are entirely so an extra conviction can be added to the count and justify this whole boondoggle, that has yet to even successfully convince a non-US court they even have a case.
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Re: Re: Re: If Megaupload does business in the US, then it's IN the US.
Is this Gorehound? You have the same irrational tendency to capitalize words in the middle of sentences that aren't proper nouns and your agrguments are just as nutty.
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Re: Re: Re: Re: If Megaupload does business in the US, then it's IN the US.
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Re: Re: If Megaupload does business in the US, then it's IN the US.
Dude, when you make an asshole statement, you come across as an asshole.
Some of the arguments come from a fundamental opposition to overreaching by the US government.
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Re: If Megaupload does business in the US, then it's IN the US.
So if someone from the middle east buys an online subscription to Playboy's web site, Playboy can then be criminally charged for breaking the obscenity laws of middle eastern countries?
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Re: Re: If Megaupload does business in the US, then it's IN the US.
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Re: Re: If Megaupload does business in the US, then it's IN the US.
Actually, they can. Plenty of people in the porn business won't travel to certain countries for fear of being arrested and prosecuted.
Most of those countries have pretty hard blocks on porn as well.
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Re: Re: Re: If Megaupload does business in the US, then it's IN the US.
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No wonder the U.S. justice system is seen as hopelessly corrupted when judges make up interpretations on the fly to suit their needs.
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1) Regarding the US seizing Megaupload's assets - in terms of MU's and Dotcom's money, was all of it held by US banks?
2) If the answer is yes - let's say Dotcom is never extradited and never travels to the US. What happens to that money? Does the US government have the authority to keep it forever?
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Regarding the money, there are two distinct actions. First is seizure. The second is forfeiture. In order for the US or NZ to keep the money, there has to be a forfeiture hearing.
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Bah!!
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Re: Bah!!
Patriot Act
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Basically, the laws on serving for this sort of thing really aren't up to date when it comes to the internet. It's only recently that you could offer a service in the US without actually being in the US, the only exceptions before might have been mail order, but even they were subject to the laws on importing and such. US law has always had some sort of control point over business done inside it's borders.
The internet changes all that, because electronic transactions don't look at borders. It's one of the reasons why Kim, although a true scammer in my book, is also a fairly smart guy, because he spotted that there was a major weakness when it comes to the laws for business between countries.
That said, the judge is right. US law was not intended to create a free pass system for businesses that intentionally avoid having a business presence in the US while offering products or services. Kim may have though he saw a hole, but the Judge saw that the law didn't intend for there to be a way to hide.
I am sure that Kim's lawyers will appeal it, and I am pretty confident the judgement will stand up. Further, I would not be shocked to see the congress take up modifications to this and similar laws in the new year to address the issue and close whatever loopholes may exist for scammers like Kim.
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Neither are the laws for copyright, but here we are...
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[citation needed] applies here.
Remember, we are talking about providing copyright material to US citizens. So careful where you go!
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But I'd be willing to put money of the fact that those services are not going to be indicted under the current laws in which they trade in the UK.
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Are you kidding? There have been extraordinary efforts to change copyright law because of the delivery method, i.e. the internet. DMCA, ProIP, SOPA, PIPA, TPPA, etc. The problem is that the current and proposed laws do not reflect what is actually happening in the real world and what people actually think about those laws. When that happens, laws should change to reflect those societal changes.
"Nice try, but a total fail of an analogy."
I didn't make an analogy...
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Intentionally avoiding is...
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Basically, companies that sold products or services to US citizens generally had some sort of presence in the US.
What Kim did with Mega (and what many other do online) is to incorporate their businesses in places where the laws are the most lax in their field, and to use that as the basis of their operations. Using that basis to sell into the US, these companies seek to avoid US law while enjoying access to the marketplace.
In effect, it usurps US law, replacing it with whatever is the most lenient rules in the world.
Kim went one step further, trying to isolate himself by placing his businesses in one country, himself in another, and marketing everywhere EXCEPT those two places. He made it even more complex by leasing computer services in other places completely, further attempting to sully the waters of jurisidiction.
"why is it illegal"
it's not illegal. It's is however an attempt to avoid liability under US law, which in itself may be an issue. Certainly the lack of serviceability for legal purposes is a big issue, as is perhaps the avoidance of civil cases and also taxes at the state and federal levels.
I think the judge ruled correctly, in that the structure and actions of Mega appear to be acts to intentionally avoid facing legal liability in the US.
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Trying to isolate themselves by placing their business in a country well know for its lax laws in the field of Islam Sharia Law, these companies seek to avoid Iranian law while enjoying access to it's marketplace.
Clearly structures and acts to intentionally avoid facing legal liability in Iran.
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However. One of the most important points is that we are dealing with something happening on the internet. The historical interpretation is therefore of low relevance.
Without going into the debate of who has how strong laws of USA, Hong Kong and New Zealand there are several other suspicious characteristics about the Mega sites.
It does seem suspicious to have the company placed in Hong Kong and only taking DMCA-requests in local language when the site is almost entirely in eloquent english!
The lifestyle of Kim Dotcom was so public and expensive that it was easy to come to believe that something is wrong here.
Problem is: Are his crimes criminal or civil?
The real problem seems to be that there is a distinct lack of evidence of criminal offences committed by him and that is where the extradition comes in.
To someone looking at the case it seems so thin that it is easy to conclude that there are alterior motives like someone wanting Kim Dotcom extradited - not for something concerning criminal offences - but to have him charged with civil offences. It is not possible to extradite for civil offences and that seems to be the motivation for the criminal case to begin with, which is problematic from a human right perspective (Not knowing what you are charged for!)!
It makes sense to get him extradited to US civil courts because the calculated damages in civil court in USA is so much higher than in the rest of the world.
As soon as a case seems more focused on punishing a person as hard as possible rather than getting to the truth in the case and afterwards focusing on punishment, it is not worthy of the democracies we claim to be living in. Revenge is a sign of abuseful governing and not a democracy (Ukraine and Belarus comes to mind here!).
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By that logic, all adult companies on the internet should now face criminal charges in countries like Iran, India, etc, for violating their obscenity laws. Google/YouTube should face criminal charges in the middle east for hosting the Innocence of Muslims videos. You should face criminal charges if you've ever posted anything that violates the laws of any country that has internet access.
Is that the legal interpretation you want?
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So businesses formed outside of the US that don't have a US presence are not simply conducting business outside the US, but they are breaking US law?
Better inform my local plumber he needs to open a US office to ensure he's not committing a crime by conducting business in my UK town.
By logical extension, if an American tourist travels to Amsterdam, buys some pot and takes it back to the US, the Dutch seller has somehow committed a crime?
The only answer is for the rest of the world to block US domains and turn back Americans at their borders to ensure that they don't accidentally break a US law by simply interacting with an American- obviously.
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imagine that, the US doing what it pleases...
What are you? 10?
There are rules for the world and there are rules for the US.
Imagine if another country on the planet had bases in 150-170 foreign countries.
Imagine if another country bombed 35 countries since WW2 and overthrew about 3 times that amount.
Claim the same thing as the US?
It wont happen.
WE are the evil empire but no one see themselvs as the bad guys. There are always justifications for actions but most times its "we can do what we want because there is nothing you can do about it."
The bully be us.
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Scores on the doors so far....
Number of *proven* crimes committed...
MegaUpload 0
US/NZ 5, 6, 7, 8 ?? (I've lost count)
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Re: Scores on the doors so far....
2. Unlawful seizure of property.
3. The unlawful removal of HDD data from NZ by FBI agents.
4. Unlawful wire taping (spying) by GCSB.
Those are the four I can think of but I am uncertain if the first three would rank as "proven" when they like to appeal anything that goes against them where it is only "proven" once the appeal fails.
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Re: Re: Scores on the doors so far....
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Re: Scores on the doors so far....
2. Unlawful seizure of property.
3. The unlawful removal of HDD data from NZ by FBI agents.
4. Unlawful wire taping (spying) by GCSB.
Those are the four I can think of but I am uncertain if the first three would rank as "proven" when they like to appeal anything that goes against them where it is only "proven" once the appeal fails.
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And in other news...
Meanwhile, politicians practice their 'shocked, concerned and confused' looks, to be used when they bring up how mysteriously, so few new jobs are being created in the US lately.
And finally, in related news, the 'red forehead' epidemic continues to spread, as an ever increasing number of people facepalm over the stupidity of their 'representatives' and the 'justice' system.
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117 years of progress.
Quite simply, at the time that opinion was expressed, it was actually impossible to be in one country and do business in another without the transaction happening entirely in one or the other country. Comity basically requires that the law of one country or the other are applied, but not both. The respect for the other legal system is key here.
Universal jurisdiction isn't an issue here because at least part of the transaction happens in the US, with US citizen, on US soil. Simply put, for the US courts, the illegal act has at least one solid foot in the US, and therefore can be judged directly on US law.
We now face situations that judgements and opinions expressed even 30 years ago are not ready to deal with, because of the potential for overlapping jurisdiction, not between municipalities, but between countries.
It's the beauty of what Kim Dotcom tried to do: he appears to have tried to disperse his businesses in a manner that made him both nearly judgement proof on a civil level, and nearly immune from criminal prosecution. Think about it. Here's a German citizen, running an online computer business, registered in Hong Kong, operated from Europe, run by guys in New Zealand, on servers in the US and Amsterdam, selling access to pirated materials to people in every country except Hong Kong where the company is registered.
He then appears to have used another series of companies in other countries to feed internet traffic and extract "commissions" from the main company, thus laundering the ill gotten gains into apparently legal "sales commissions".
His entire goal appears to have been to use the sort of opinion you quoted as a shield against his bad acts. Too bad for him that the US didn't fall for it, they followed the money and realized that the transactions started in the US, and thus the rest of it, at least in relationship to those transactions, are subject to US law.
It's fun to watch the pirate apologists here try to explain it all away.
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Or is the new rule now that you can only run a company in the country of your citizenship and it's suspicious if there are multiple locations? Well, let me see: Amazon: an American company, registered in Luxemburg, running on servers in (can't be bothered to find out to be honest, but will bet it's not Luxemburg), shipping its goods with a German company...well, I always knew there was something dodgy about Amazon!
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Our law system in the US is a joke
So the judge is basically saying that the US government wants to extradite Mr. Dotcom into the US (without serving him first), and once he's on US soil, then they're going to mail the summons letter to his jail cell...
Using the above logic, I suppose it's OK if China starts extraditing US citizens over to their country for criticizing Chinese government officials.
No? It's not OK for China to do what? Then I say the DOJ and this so called judge, are making up the laws as they see fit.
"Interpreting" the law to suit your desired position is a perversion of the justice system and under-minds everything it stands for. Including everyone who upholds values of the law. Or lack values in this case.
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Re: Our law system in the US is a joke
Nope. You are missing the point. Someone making a comment about China may be breaking their laws if they do it in China. They may be liable if they sold access to that material in China.
Just saying something isn't the same as doing business in a country, is it?
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Re: Re: Our law system in the US is a joke
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Re: Re: Re: Our law system in the US is a joke
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and got the agreement from all those 'other countries' instead of assuming, as USA always does, that, because it is the USA, it can do whatever it fucking well wants, where it fucking well wants, to who it fucking well wants, when it fucking well wants, for whatever reason it fucking well wants! it then wonders why it is hated and untrusted, almost universally!
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it's not like the vote is gonna help it's to easy to "fix" that.
WHAT IS THE SOLUTION??
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Instead of saying something new, I'll repeat myself
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No one would remember, but Nazi Germany had a very good constitution and set of laws on the books for human rights, liberty and privacy. They technically were a democracy, had elections, members of Parliament, elected officials, courts and so on. The whole system was there and in place....
Now mind you the SS \Gestapo didn't follow these laws and human rights when going forth and arresting anyone that they felt was criminal in the eyes of the Reich.
As soon as the government justice system, prosecutors and police stop respecting the laws and human rights, then the country is no longer a democracy and is becoming the same as Nazi Germany.
Hollywood is putting itself before the citizens of the US and the rest of the world. I think some one like Steven Spielberg who takes personal exception to the miss use of the term "Nazi" and "Holocaust" should really first take notice of what is happening to his own country and what part his industry is playing in that change.
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