(Feb. 22, 2017) On February 20, 2017, the High Court of New Zealand affirmed the district court’s December 2015 ruling that Kim Dotcom and three other appellants are eligible for extradition to the United States. (Ortmann & Ors v United States of America [2017] NZHC 189; Press Release, High Court of New Zealand, Ortmann & Ors v United States of America [2017] NZHC 189 (summary of decision) (Feb. 20, 2017), Courts of New Zealand website.)

Background

Kim Dotcom (born Kim Schmitz) is the founder of the file-sharing website Megaupload.com, which was shut down by U.S. authorities in early 2012. Seven individuals and two corporations were “charged in the United States with running an international organized criminal enterprise allegedly responsible for massive worldwide online piracy of numerous types of copyrighted works through Megaupload.com and other related sites, generating more than $175 million in criminal proceeds and causing more than half a billion dollars in harm to copyright owners.” (Press Release, Federal Bureau of Investigation, Justice Department Charges Leaders of Megaupload with Widespread Online Copyright Infringement (Jan. 19, 2012).) The action related to Megaupload “is among the largest criminal copyright cases ever brought by the United States.” (Id.)

Dotcom is a citizen of Germany and Finland and was granted permanent residence status in New Zealand in 2010. New Zealand police arrested him and three other Megaupload employees in January 2012 at the request of the United States. The three men had been in New Zealand to attend Dotcom’s birthday party. The search warrants executed at Dotcom’s property at the time of his arrest were subsequently challenged in court, but were found to be legal by the Supreme Court. (Liam Hyslop, Kim Dotcom Mansion Raid Legal, Supreme Court Says, STUFF.CO.NZ (Dec. 23, 2014); Kim Dotcom & Ors v Attorney-General [2014] NZSC 199, NZLII website.)

The U.S. government sought extradition of Dotcom and his three co-accused under the Extradition Act 1999 (New Zealand Legislation website) and an extradition treaty between the U.S. and New Zealand.(Extradition (United States of America) Order 1970, New Zealand Legislation website.) On December 23, 2015, the District Court in Auckland ruled that the four men were eligible for extradition, finding that “the the US had a ‘large body of evidence’ which supported a prima facie case.” (Kelly Dennett, Kim Dotcom Loses Extradition Case, Files Immediate Appeal, STUFF.CO.NZ (Dec. 23, 2015).) Under section 30 of the Extradition Act 1999, the Minister of Justice must determine whether or not to surrender a person to the requesting country following a court determination that he or she is eligible for extradition. However, Dotcom and the three other men immediately filed appeals against the District Court’s decision, and the Minister of Justice, Amy Adams, noted that “[s]uch a decision would not arise until after the conclusion of any appeal of the legal finding that the respondents are eligible for extradition.” (Id.)

High Court Decision

The High Court stated that the United States is seeking extradition of the four appellants on 13 counts, which allege

conspiracy to commit racketeering (count 1); conspiracy to commit copyright infringement (count 2); conspiracy to commit money laundering (count 3); criminal copyright infringement by distributing a copyright work being prepared for commercial distribution on a computer network and aiding and abetting of criminal copyright infringement (count 4); criminal copyright infringement by electronic means and aiding and abetting of criminal copyright infringement (counts 5 to 8); and fraud by wire and aiding and abetting fraud by wire (counts 9 to 13).  (Ortmann & Ors v United States of America, supra, at [2].)

The appellants’ appeal against the District Court decision raised more than 300 questions of law. (Id. at [9] & note 7.) One of the main issues in the case was whether “copyright infringement by digital online communication of copyright protected works to members of the public is a criminal offence in New Zealand under the Copyright Act.” (Summary of decision, supra, at 2.) The District Court had concluded that it was, and this was overturned by the High Court, meaning that the appellants “succeeded with one of the main planks of their case.” (Id.) However, the High Court found that

a conspiracy to commit copyright infringement amounts to a conspiracy to defraud and is therefore an extradition offence listed in the USNZ Treaty. Further, other extradition pathways are available for all counts because of their correlation to a number of serious crimes in the Crimes Act. These offences are deemed to be listed in the Treaty by a provision in the Extradition Act, subject to various criteria being met. (Id. at 3.)

The High Court agreed with the District Court that “the evidence relied on by the United States for the purposes of extradition does satisfy the prima facie case test against each appellant on each count.” (Id.)  It therefore ruled that the four appellants are eligible for surrender to the United States on all counts. (Id.)

Following the release of the High Court’s decision, Dotcom’s lawyer said that he would lodge an appeal with the Court of Appeal. Dotcom stated that he expected the case would be before the New Zealand courts for at least two more years. He said ”[w]e’re going to make clear that this is not a fraud charge, the indictment is not for fraud, it is for copyright infringement. …  The appeal can show general fraud status cannot be applied.” (High Court Upholds Kim Dotcom Extradition Decision, STUFF.CO.NZ (Feb. 20, 2017).)

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