By David Ingram
WASHINGTON, Oct 9 (Reuters) - The U.S. government's criminal
case against the shuttered file-sharing website Megaupload will
go forward for now, a federal judge ruled in an order made
public on Tuesday.
The ruling deals a setback to Megaupload as the company and
its chief executive, Kim Dotcom, fight allegations that they
encouraged global copyright theft.
U.S. District Judge Liam O'Grady, in the order, agreed with
prosecutors that there was no procedural error in their
inability to serve papers in the United States to Megaupload,
which is based in Hong Kong.
But the judge left open the possibility he could later
dismiss the case on other grounds, like an argument that delays
have denied the company its right to "due process."
Megaupload lawyer Ira Rothken told Reuters he plans to file
such a request soon.
O'Grady signed the order allowing the case to go forward on
Friday. Monday was a holiday for the U.S. government, so the
order was not posted online until Tuesday.
Megaupload was one of the world's most popular websites,
allowing users to store and share data, until a U.S.-led
operation shut down the company in January, seized its assets
and raided Dotcom's luxury estate in New Zealand.
U.S. prosecutors accuse Dotcom and seven others of
organizing a criminal enterprise that made more than $175
million. They are asking New Zealand to extradite Dotcom.
Dotcom, a German national also known as Kim Schmitz, denies
the charges and has tried to rally Internet users to his cause.
In May, Megaupload lawyers asked that the indictment against
the company be thrown out because they said it had no address in
the United States and could not be served with court papers.
O'Grady rejected that idea, writing that a foreign company
violating laws within the United States cannot "evade the
jurisdiction of United States courts by purposefully failing to
establish an address here."
Prosecutors may eventually serve one of the company's
executives if he is extradited, the judge wrote.
In a footnote, O'Grady added that he "leaves open the
possibility" of a future argument that Megaupload "has been
denied due process" by the failure to serve the company. The
U.S. Constitution guarantees "due process of law" for criminal
defendants and others.
Megaupload's Rothken said the company respectfully disagrees
with the result of the judge's order but appreciates "the court
implicitly allowing" a new motion. "We will be filing such a
motion shortly," he said.
A spokesman for federal prosecutors in Alexandria, Virginia
where the case is proceeding, had no comment.
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