NZ court orders US to prepare to hand over Megaupload data

Judge accepts Dotcom lawyer's compromise solution to overcome evidence disclosure stumbling block

Auckland High Court has ordered the United States government to "immediately commence preparation" to supply Megaupload founder Kim Dotcom and his co-defendants with a copy of data held on seized Megaupload servers.

According to a judgement delivered by Justice Helen Winkelmann today the material to be handed over includes over 10 million intercepted emails, "voluminous financial records obtained from a number of different countries" and more than 150 terabytes of data that was stored on servers seized in New Zealand alone. The judgement refers to the contents of servers rented by Megaupload in the US as being "very large" but according to other reports amount to 25 petabytes.

Dotcom, Finn Batato, Mathias Ortmann and Bram van der Kolk, are awaiting an extradition hearing related to US copyright infringement charges which is due to take place on August 6. All four defendants have denied any wrongdoing.

The US government is seeking a judicial review of an earlier judgement by Judge David Harvey on May 29, which ordered the US to disclose within 21 days "documents and materials relating to the whether the US has a prima facie case" against the Megaupload defendants for the purposes of extradition.

Meanwhile the US applied to remove the effect of the order of May 29.

Crown lawyers acting for the US have argued that the scope of that order "trespasses on the trial procedures of the requesting country." In the US the obligation for prosecutors to provide discovery or disclosure is triggered when a defendant makes their first appearance in a US court.

The US also argued that if the order was not suspended it would not be able to comply because the 21 day time period was too brief. According to the US submission the process of providing forensic images of New Zealand data not already copied will take a minimum of two and a half months. Furthermore, the US argued it was unable to provide readable copies of the items it has imaged as much of the content was encrypted.

But in her judgement Justice Winkelmann said that the respondents (Dotcom, Batato, Ortmann and van der Kolk) were seeking a clone of the encrypted drive and that the absence of passwords provided no barrier to this.

On the timing issue, if a complete stay were issued, the extradition hearing date would "inevitably be lost."

"Whilst it is certainly possible that, given the issues that remain outstanding between the parties, the 6 August 2012 date will be jeopardised, the applicant, as the prosecuting party, must accept an obligation to do all that it can to maintain that date," Winkelmann said.

Winkelmann said she was therefore satisfied that a compromise suggested by Dotcom's lawyer Willie Akelman was the "appropriate resolution".

This means the US will not be required to provide the disclosure copies as ordered by Judge Harvey, however it must immediately start preparing to do so.

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