Judge considers hearing on improper Megaupload seizure

29.06.2012

Instead of a search-and-seizure hearing, the court should treat Goodwin and other Megaupload users as unsecured creditors who can ask for their data back when the DOJ's case against Megaupload is finished, he said.

In April, for the DOJ, Goodwin, Megaupload and Carpathia to meet with a mediator and come to an agreement on a way Megaupload customers could recover their files. No agreement has happened.

O'Grady also asked about the contractual obligations of Megaupload to its customers. Megaupload's terms of service gave customers no warranties and told users to store data at their "sole risk," Peterson said. The TOS said Megaupload's service was available "as is and as available" and could be terminated at any time, he added.

But Goodwin's dispute isn't with Megaupload or Carpathia, said Julie Samuels, a lawyer with the Electronic Frontier Foundation representing Goodwin. It's the DOJ's seizure that cut off the access of Goodwin and potentially millions of other law-abiding Megaupload customers to their data, she said. The DOJ has frustrated efforts to return the data to its owners by objecting to a proposed transfer of the servers from Carpathia to Megaupload, she said.

There's disagreement about how many legitimate Megaupload customers there were. Megaupload has claimed 180 million customers, but the DOJ contends there were less than 67 million registered users just before the site was shut down. Less than 6 million customers ever uploaded a file to Megaupload, the DOJ contends.