FBI Cannot Examine Megaupload Servers, Canada Appeal Court Rules

When Megaupload was raided in 2012, more than 1,100 servers were seized in the United States. In addition, 32 were targeted in Canada, and the battle to determine who can access them has continued ever since. The Ontario Court of Appeal has now decided that won't be the FBI.

It’s incredible to think that more than five years after the raids on Megaupload, in some respects the case has made virtually no progress. This is particularly true of the defunct company’s servers in Canada.

Canada became quietly involved in the Megaupload investigation in December 2011, around a month before the raids in New Zealand, United States, and elsewhere. The U.S. Department of Justice asked the Minister of Justice to grant to obtain a search warrant authorizing the seizure of 32 leased computer servers located in Toronto.

On January 18, 2012, a Superior Court judge in Ontario issued the warrant which targeted the servers located in an Equinix datacenter. As the case continued to build against Megaupload, Kim Dotcom and his associates, the U.S. government asked Canadian authorities to hand the hardware over, claiming that an internal Megaupload email revealed them to be “database / number crunching machines.”

With the servers in the possession of the Royal Canadian Mounted Police, during January 2013 the Minister of Justice applied for an order for the servers to be sent to the United States. Megaupload protested on the basis that the servers contain a lot of information irrelevant to the case, but agreed that an independent forensic examiner could examine them before any handover.

An Ontario court sided with Megaupload and refused to send the servers’ data to the United States. In 2015, both sides were ordered to find a way to filter out irrelevant content, perhaps with the aid of a “clean team” of FBI investigators who had no connection with the case.

While this path was approved by a judge, both Megaupload and Equinix objected to the proposal, complaining that the FBI shouldn’t be involved at all and any examination should be carried out independently. In common with almost every decision in various Megaupload cases, this one also went to appeal.

The Ontario Court of Appeal handed down its decision on Friday, this time in favor of Megaupload.

“The judge had to decide what material, if any, should be ordered sent to the United States. The appellant and the American investigators, the FBI, stood in a strongly adversarial position with respect to the order that should be made,” the Court of Appeal wrote in its decision.

“The judge, because of the nature of the seized material, needed help in determining what order should be made. The judge needed someone who could prepare a report outlining the nature of the material so that the judge could decide what part of the material, if any, should be sent to the United States.”

Noting that the report would “significantly influence” the nature and scope of any order made by the judge, the appeal court said that while the FBI may indeed carry out their task as asked, having them involved at all would be entirely inappropriate.

“In my view, it is offensive to the appearance of fairness, and specifically the appearance of judicial impartiality, to have an entity closely associated with one of the adversaries provide the judge with the necessary report,” the decision reads.

“In coming to that conclusion, I make no assumption that the FBI ‘clean team’ would not comply with whatever conditions the court imposed. My concern is with the appearance of fairness and impartiality.”

The appeal court said that when a judge is asked to appoint an investigator, the starting point should always be with people unconnected with the case. Consideration should also be given to the issue of costs (the FBI option in the Megaupload case was cheaper) but they would have to be prohibitively excessive to chose an affiliated entity over an independent party.

With the earlier decision now overruled, the servers will continue to gather dust in the hands of the RCMP, where they have been since their seizure in 2012. No doubt the legal wrangling will continue, as it has done in the United States concerning the servers there.

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