US Govt. Objects To Megaupload Hiring Top Law Firm
Last week it was revealed that Megaupload had retained the services of Andrew Schapiro, the lawyer who led YouTube to a summary judgment in its copyright trial against Viacom. But now the US government has filed papers objecting to Schapiroâ€™s law firm working on Megauploadâ€™s defense, citing conflicts of interest involving Google, YouTube, Disney, Fox and other movie, TV show and software companies.
Following the raids on Megaupload in January, tens of millions of dollars in assets and funds belonging to the company were seized.
Initially a law firm called Sidley Austin LLP had been negotiating on Megauploadâ€™s behalf for the return of such assets and funds held in Hong Kong, New Zealand and Canada. Funds were indeed released from Hong Kong in February (to pay Mega employees) and from New Zealand in March (to pay for Kim Dotcomâ€™s living expenses).
At the end of last month, Sidley Austin LLP and Rothken law firm filed a motion in the US to have more funds released to cover Megaâ€™s legal fees. Later Sidley Austin withdrew and a new law firm called Quinn Emanuel Urguhart & Sullivan took their place.
The addition of the Los Angeles-based company to Megauploadâ€™s legal team was widely considered a great asset for Kim Dotcom and his co-defendants to exploit. Andrew Schapiro, a partner at Quinn Emanuel, had previously represented several technology and media companies including Google and YouTube, leading the latter to a summary judgment in its $1 billion lawsuit against Viacom.
In a new court filing the US government complains that Schapiroâ€™s past record in copyright cases, and that of Quinn Emanuel as a whole, present a series of conflicts of interest.
The government says the first conflict concerns YouTube. Last week the U.S. Court of Appeals in Manhattan reversed a lower courtâ€™s decision to issue summary judgment in the Viacom v YouTube case, so now that battle is back on. YouTube is also listed as a victim and potential witness in the criminal indictment against Megaupload. Quinn Emanuel canâ€™t have interest in both cases, the government says.
The second claimed conflict concerns Google, a company represented by Quinn Emanuel on a number of occasions including some involving the companyâ€™s AdSense advertising service. According to the Megaupload indictment, Google withdrew its Adsense service from the now-defunct file-hosting service in part due to copyright infringement concerns. The government intends to call Google as a witness in the Megaupload case.
But it doesnâ€™t stop there. The government goes on to list several companies that have been represented by Quinn Emanuel in copyright matters who are also alleged victims in the Megaupload case and who could be called as witnesses.
The list includes a whoâ€™s-who of Hollywood and TV companies including Disney, Fox, Time Warner, Warner Bros. and HBO, in cases dating between 2006 and 2009. Another, a trademark dispute involving the company Danjaq LLC (holder of copyrights and trademarks relating to James Bond) and Sony dates back to 1998.
Software companies make an appearance too. Quinn Emanuel represented BrĂ¸derbund Software back in 1986, Intuit (the company behind Quicken) in 1997, and at some point Bulletproof Software. It is claimed that all of these companies had their products distributed unlawfully via Megaupload and could be called to give testimony.
â€śIt is unclear how Quinn Emanuel intends to zealously represent defendants Megaupload Limited and Kim Dotcom while also protecting confidential attorney-client information gained in the course of representing other clients [...] particularly where those clientsâ€™ interests are directly opposed to those of the defendants,â€ť the government writes.
But according to the government the conflicts go even deeper, particularly since Quinn Emanuel are now applying for funds seized from Megaupload to be released in order to pay legal fees.
â€śThe possibility of a conflict of interest raised by Quinn Emanuelâ€™s proposed representation of Megaupload Limited and Kim Dotcom is not limited to mere subject matter. The assets seized by the government from defendants may eventually be restored to victims â€“ including possibly the current and former Quinn Emanuel clients listed above â€“ as restitution,â€ť the government adds.
In any event, the US government believes that the amount of money already released by New Zealand to Kim Dotcom ($240,000 to be released in monthly installments of $32,000 until the funds are depleted then indefinite monthly payments of $16,000) will not prove restrictive when it comes to hiring a â€ścompetentâ€ť legal team, â€ś..even if such funds prove insufficient to pay Quinn Emanuelâ€™s billing rates.â€ť
The governmentâ€™s complaints pose a real problem for Megaupload. Will it ever be possible for Kim Dotcom and his co-defendants to recruit a high-quality copyright specialist law firm that hasnâ€™t ever represented any of the potential witnesses in the case? It seems unlikely.
Meanwhile, the fight for legitimate users of Megaupload to get their data back continues.
â€śThe Electronic Frontier Foundation (EFF) will ask a federal judge on Friday to establish a process that would allow lawful users of Megauploadâ€™s cloud storage service to get their files back,â€ť the EFF reports.
Update: Quinn Emanuel just responded to the objections in quite an entertaining rebuttal.
Hereâ€™s a quote:
â€śIf the Government is to have its way in this case, the only lawyers before the Court will be those representing the Government. If the Government is to have its way, the only evidence available to the Court would be that cherry-picked by the Government, for the Government, from the universe of relevant servers slated to be wiped. If the Government is to have its way, in sum, Megaupload will never get its day in Court and the case will effectively be over before it has even begun.â€ť