Justice Proposes Roadblocks for Megaupload User’s Recovery of Video Files
Megaupload user Kyle Goodwin can’t simply claim he owns the copyright on videos he uploaded to Megaupload and get them back during a criminal investigation of the shuttered cyberlocker service, the Justice Department told the U.S. District Court in Alexandria, Va., last week. It was responding to the court’s request for proposals on how a hearing might proceed for Goodwin to recover his commercial footage of high-school sports (WID Oct 24 p8). Goodwin separately told the court in response to its request that the record in the case “shows that the government acted (and continues to act) with a callous disregard for third-party property rights in data stored on Megaupload."
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Goodwin “has yet to demonstrate whether he has an interest in any property seized by the government,” so “any preliminary evidentiary hearing in this matter should be limited” to that question, Justice said: That approach “will conserve judicial resources and avoid a fishing expedition into a pending criminal prosecution.” The court can then consider, if Goodwin has an interest, whether he’s entitled to relief under Federal Rule of Criminal Procedure 41(g) -- which gives courts leeway to “impose reasonable conditions” on the return of seized property -- and hence “minimize the impact on the criminal prosecution,” the agency said.
All Goodwin has done so far is claim he used Megaupload’s service, which itself relied on Carpathia Hosting for cloud storage, Justice said: If “mere use of the service was sufficient to create a legal ownership interest in servers leased by Megaupload from Carpathia, then there could be hundreds, if not hundreds of thousands, of ‘owners’ of each and every single Carpathia server. Such a result is absurd.” In a footnote on Goodwin’s claim to data on Carpathia servers “imaged” by the government, Justice said it reviewed Goodwin’s site, OhioSportsNet.tv, and determined it was far from clear whether Goodwin owned “all the rights” in his videos, which include “recordings of popular copyrighted music” and music files that match the hash values of “pirated versions of popular music.”
Goodwin’s ownership interest could be further limited by the contract between Carpathia and Megaupload and the “written agreement” between Megaupload and Goodwin regarding his use of the cyberlocker service, Justice said. Those contracts “likely limit any property interest he may have in the data stored on Carpathia’s property,” so the court should limit the initial hearing to whether Goodwin has a “prima facie case,” the filing said. A broader hearing could put more facts in dispute, and the court “may unintentionally authorize a large amount of irrelevant discovery that impinge on the criminal proceedings,” such as whether Goodwin has “clean hands,” the cost and feasibility of finding one user’s data on Carpathia servers, how “if at all” the government could stop the return of “infringing materials and other contraband” and whether “cheaper remedies exist.” Justice seems to doubt that Goodwin’s own hard drive is truly inaccessible, as he has claimed, saying in its filing that’s one of the possible cheaper remedies.
In this civil context, courts have “wide latitude to limit evidentiary hearings to avoid ‘mini-trials’ on minor issues,” Justice said. The parties could probably agree on a set of documents for the court to consider, supplemented with sworn affidavits, that may be “sufficient” for a ruling, but a broader hearing could require discovery on Goodwin’s factual claims and “live testimony,” it said.
The court can exercise its Rule 41(g) “equitable jurisdiction” right now, Goodwin’s brief said. Goodwin has already shown he has an “individual interest” in the seized property, that he'd be “irreparably injured” without the videos that are “integral to his business,” and that he has an “adequate remedy at law,” namely the return of his videos, he said. Even when the government “released” the third-party data back to Carpathia, it did so “in a manner that deliberately made the data both inaccessible to property owners and subject togovernment-sanctioned destruction, while at the same time blocking all reasonable efforts to allow access,” he said.
The U.S. government is “well familiar with the need to accommodate third-party Fourth Amendment rights through minimization when it executes searches and seizures, especially of electronic material,” as evidenced by minimization procedures laid out in wiretapping law, Goodwin’s brief said: The Foreign Intelligence Surveillance Act, for example, requires return of seized information within 72 hours unless it “indicates a threat of death or serious bodily harm.” The government “plainly did not” use well-established minimization procedures in its seizure of third-party data, he said. The government and Goodwin should “work together to identify and agree on the necessary factual witnesses, evidence to be exchanged, and potential stipulations of fact,” as well as exchange witness statements, ahead of an evidentiary hearing, the brief said.