DOJ flip flops in Megaupload case: argues one thing to the Court and the opposite to the federal rules committee

Megaupload filed in Federal Court today in the Eastern District of Virginia a Request for Judicial Notice that demonstrates the US Department of Justice advised the Megaupload Court that a foreign corporation did not need a US mailing address for proper service of a criminal indictment while on the other hand advising the Federal Rules Committee of the opposite view in order to change the law. Please see a summary of the submissions below.

Specially appearing Defendant Megaupload Limited (“Megaupload”) respectfully requests that the Court take judicial notice pursuant to Federal Rule of Evidence 201 of a letter submitted by the United States Department of Justice to the Advisory Committee on the Criminal Rules, recommending amendments to Rule 4 of the Federal Rules of Criminal Procedure “to permit the effective service of a summons on a foreign organization that has no agent or principal place of business within the United States.”  (See Letter from Assistant Attorney General Lanny Breuer to the Honorable Reena Raggi, Chair, Advisory Committee on the Criminal Rules, dated October 25, 2012, a true and correct copy of which is attached as Exhibit 1.)  Specifically, the Government asks the Advisory Committee to “remove the requirement that a copy of the summons be sent to the organization’s last known mailing address within the district or principal place of business within the United States,” and to amend the Rule to “provide the means to serve a summons upon an organization located outside the United States.”  (Id.)  In doing so, the Government implicitly acknowledges that it cannot properly serve Megaupload—a Hong Kong corporation with no U.S. agent or office—under the existing Rule.       

The Government’s letter is directly relevant to the Court’s consideration of Megaupload’s pending motion to dismiss without prejudice (Dkt. 146) as it contradicts the Government’s repeated contention that it can validly serve Megaupload—a wholly foreign entity that has never had an office in the United States—without complying with Rule 4’s mailing requirement.  To the contrary, the Government explicitly acknowledges in the letter that it has a “duty” under the current Rule to mail a copy of the summons to a corporate defendant’s last known address within the district or to its principal place of business elsewhere in the United States.  (See Exhibit 1 at 2.)  Moreover, by seeking to have the mailing requirement eliminated, the Government implicitly admits it cannot validly serve Megaupload consistent with Rule 4 as currently written.

The Government’s letter to the Advisory Committee thus confirms what Megaupload has argued all along—that the Government indicted Megaupload, branded it a criminal, froze every penny of its assets, took its servers offline, and inflicted a corporate death penalty, notwithstanding the fact that the Government had no prospect of serving the company in accordance with current law.  Megaupload should not be made to bear the burdens of criminal limbo while the Government seeks to rewrite the Federal Rules to suit its purposes.