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U.S. v. Kim Dotcom - Motion for Return of Property

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Government Says Megaupload Users Must Pay to Retrieve Their Data By Jacob L. Rogers – Edited by Heather Whitney United States v. Kim Dotcom, No. 1:12CR3 (E.D. Va. June 8, 2012) Kyle Goodwin's motion for return of property (hosted by EFF) Government reply brief (hosted by Wired) In United States v. Kim Dotcom (“the Megaupload case”), the government has filed a reply brief regarding their responsibility (or lack thereof) to provide third parties their data in a situation where the government’s shutdown of a site has made it virtually impossible for that third party to otherwise retrieve their data. Here, in response to Mr. Kyle Goodwin’s motion for return of property pursuant to 18 U.S.C. § 1963 or Federal Rule of Criminal Procedure 41(g), the government claims that non-parties to the case have no recourse to the government in order to obtain the data stored on the previously seized Megaupload servers. (Government’s brief at 12). JOLT Digest previously covered the Megaupload indictment. A thorough explanation of the issues can be found on CNET. Computerworld and WebProNews assert that the government's proposal is unrealistic, and might be an effort to deter swarms of Megaupload users from demanding their data. According to Computerworld, Megaupload had leased 1,103 servers from Carpathia, storing approximately 28 petabytes of user data. The government previously copied much, but not all, of the data off of the servers in preparation for trial and is currently preventing the Megaupload website from being reactivated. Carpathia spends approximately $9000 per day keeping the servers running, although the government has stated that it is not concerned if the remaining data is destroyed. The government’s brief contains two major lines of argument as to why third parties should not be able to petition the government for recovery of their data located on the Carpathia servers. First, the government presents a jurisdictional argument. The relevant statute, 18 U.S.C. § 1963, provides that a third party may petition the courts for a hearing to adjudicate whether that third party does in fact own property seized by the government. In the case of real property or physical chattels, this hearing usually allows the third party to establish title, at which point the government will return the property, possibly at the court’s command. However, in this case, the court did not command the return of the property, and the government contends that it has no power to return the property because it does not possess the property and never did. In its brief, the government contends that this § 1963 hearing should not be merely a statutory remedy, but the exclusive statutory remedy for a third party to recover property. If the government prevailed, it would mean that Goodwin has already exhausted his only legal remedy to obtain the computer files rendered unreachable by the government. The second major line of argument is that the government does not have Goodwin’s property. Thus, because the government cannot return that which it does not have, any petition for the return of Goodwin’s property is improper. In making this argument, the government raises the novel point that, if it were compelled to assist in returning Goodwin’s data, it would actually encourage the government to seize greater amounts of data in the future in order to reduce the cost of returning it to third parties down the line. Lastly, the government contends, unrelated to any particular legal argument, that Goodwin unfairly wants someone other than himself to pay for recovery of his data and that he should seek redress from either Megaupload or Carpathia, rather than ask the government to pay for the cost of his data recovery. Computerworld and WebProNews raise several concerns about the government’s filing. Foremost among them is that the government presents an unrealistic solution and in reality simply wants to prevent a rush of Megaupload users requesting their data. This position raises concerns because it could allow the government to wipe out allegedly suspect user data (or render its recovery expensive beyond the means of the vast majority of users) even if the government ultimately dropped all charges. Former New York Federal Judge Abraham David Sofaer, in Wired, argued that this case represents a fundamental misunderstanding of the Internet. Judge Sofaer compared this case with a bank seizure, noting that if the government had seized a bank, it would certainly help customers get back their deposits. He ended the article by warning that the government is on a “dangerous road.” For its part, the government insists that it never seized Goodwin’s property at all; did not cause it to be lost; and even if it might have had it at one time, certainly does not have his data now. Oddly, the government’s brief ends by attempting to analogize Goodwin to a criminal defendant, arguing that as a criminal defendant does not have a right to use forfeitable assets to hire counsel, so Goodwin has no right to use forfeitable assets to try to ameliorate the financial injury he has suffered as a result of the government’s seizure.  The government then finishes that section of its brief by noting that the “[t]he two situations are hardly comparable.”       If Megaupload users want their data, they're going to have to pay