When we wrote about the US judge in the Megaupload case siding with the US government in saying that, even without being able to technically serve the company (since it has no presence in the US), the criminal case could continue, we assumed that Megaupload would appeal. But even before appealing, the company is asking the judge to reconsider, based on an earlier request and the judge's own comments. The issue is that the judge's ruling only focused on whether or not the charges against Megaupload (but not the individuals charged in connection with the company) should be permanently dropped over the lack of service (in legal terms, it would be about having the charges dismissed "with prejudice"). However, the judge did note that perhaps it would make sense for the charges to be dropped without prejudice -- meaning that they would be dropped temporarily -- until such time as Kim Dotcom was extradited to the US, and could then be served as an "alter ego" for the company itself. The judge did not rule on that, however, since (he claimed) Megaupload had not asked for such a temporary dismissal.
In response, however, Megaupload quickly filed a motion reminding the judge that they had, in fact, suggested dismissal without prejudice back in July, quoting the transcript during oral arguments, which also points out why due process suggests this is the only proper result for a company that has effectively been killed and has no recourse since it hasn't truly been charged yet:
THE COURT: Well, that—can I require them to serve the company on any particular date? There's no date in the rule—there appears to be no statutory limitation, and I understand your due process argument. So I—what if I, you know, would start with a premise that I don't control when the Government decides to serve the company. Where do we go from there?
MR. BURCK: Well, Your Honor, we would submit that if the Court were ruling—going in that direction as a reasoning matter, that the appropriate result would be to dismiss the indictment without prejudice.
Because the company, again, has already suffered all the consequences of a criminal prosecution, so the—even if there's a trial and the company is acquitted and the individuals are acquitted, of course the company is still done.
So, we think that the due process claims trump all the other issues, and we think that if the Court were so inclined, that the Government should take certain steps in order to effectuate service, then—or if the extradition proceedings would be the relevant time line for that, again, the company should have an opportunity during that period of time to try to rehabilitate itself, because there isn't currently a criminal case that is sufficient for purposes of service and they've suffered massive harm.
So, of course, that would not be our preference, and we do think that the Supreme Court has said you can't change the rules of service, et cetera, but the—that’s all in our brief—but we do think that the alternative would be dismissal without prejudice, allow the Government at the appropriate time to then supercede the indictment again, add the corporation into the indictment.
And at that point, a year down the road, two years, however long it takes and wherever the MLAT process or the extradition process takes, at that point we could have this argument as to specific individuals, corporations, entities. But, in the meantime, having the company subject to the burden of a—the incredible burden of a criminal prosecution with no ability to defend itself and no service is an extraordinary result and one that is unprecedented.
In other words, Megaupload is saying dismiss this case until Dotcom is extradited, at which point (if he's ever extradited) then the company can be charged. But in the meantime, it's only fair to not have the company held back -- and the company did make that suggestion many months ago, contrary to the judge's suggestion otherwise.
FUTURE PRIMATE 