Samuels noted that a that the search warrants used to seize external hard drives, laptops and phones from founder Dotcom's mansion in January were illegal.

O'Grady asked if the DOJ has prevented Goodwin from accessing his files.

"Absolutely, it has," said Abraham Sofaer, another lawyer representing Goodwin. "These warrants are highly questionable, based on any logic."

Separately on Friday, O'Grady rejected requests by Megaupload's lawyers to challenge the DOJ seizure of the company's assets, saying the request is premature. Dotcom and other defendants are challenging extradition to the U.S., and he's still considering the motion to dismiss the case, he wrote.

Friday's hearing was encouraging for Goodwin and other people who stored legal files on Megaupload, Samuels said. O'Grady "appears to be concerned" about people who stored legitimate files on the service, she said.