U.S. Megaupload Judge Was Replaced Due to Disney Stake, Dotcom Says

Following the civil lawsuits against Megaupload in the US, the criminal case has been reassigned to a new judge as well. According to Kim Dotcom, District Court Judge Liam O'Grady was replaced after the defense complained about his financial ties to Disney, which is listed as a victim of Megaupload's alleged crimes.

megauploadMore than ten years after the shutdown of Megaupload, there have been some major developments relating to the criminal prosecution recently.

Two of the three remaining defendants, Mathias Ortmann and Bram van der Kolk, signed an agreement with authorities to be charged in New Zealand instead of the United States.

Megaupload founder Kim Dotcom wasn’t offered such a deal and is still wanted for extradition by the US Department of Justice. The U.S. prosecution has been on hold for years but there’s some movement on that front as well now.

Judge O’Grady is Replaced
Last month we already reported that Virginia District Court Judge Liam O’Grady was replaced in the civil lawsuits filed by the RIAA and MPA against the site. At the time, Megaupload’s team suggested that it would make sense to do the same in the criminal case.

“Although both civil copyright actions are stayed at this time, the rulings in one action may affect or control issues in the other when active litigation resumes; therefore, the Court has prudently assigned them a single District Judge to preside over both,” Megaupload’s lawyers wrote.

o'grady
The request was honored this week with Judge O’Grady being replaced by District Judge Anthony J. Trenga. The court docket doesn’t reveal the reason for this reassignment but, according to Dotcom, it came at the request of his legal team.

Disney Stake
Megaupload’s founder says that Judge O’Grady previously worked at Disney and still has stock in the entertainment giant, suggesting that there could be a financial conflict of interest.

“Judge Liam O’Grady was removed from my criminal copyright case in the US which was initiated by the Hollywood studios, including Disney. We complained to the Court because we discovered that our Judge used to work for Disney and owned Disney stock while active on my cases.

“Judge O’Grady never disclosed his conflict of interest. He destroyed Megaupload without any hearing,” Dotcom says.

Disney Enterprises is a plaintiff in the movie industry’s civil case against Megaupload and is also listed as one of the victims in the criminal matter. This means that if the judge has a stake in the company, it could cause issues as the cases progress.

Financial Ties are Not Allowed
In the United States, federal judges are not allowed to preside over cases in which they have a financial interest. This was also highlighted by the WSJ, which revealed last year that Judge O’Grady handled more than 60 cases that were mentioned on his financial disclosure forms.

The court didn’t clarify whether Megaupload’s complaints played a role in the decision to replace the judge but since it happened soon after the Disney stake was pointed out, it’s a plausible explanation.

The Megaupload case is not the only major copyright lawsuit Judge O’Grady has been involved in. He also presided over the legal battle between the music industry and Cox Communications, which resulted in a billion-dollar judgment against the ISP. Disney was not involved in that case.

New Judge With a History
Going forward, Megaupload’s lawsuits will all be handled by District Judge Anthony Trenga, who previously presided over the case against the popular pirate site NinjaVideo. In that case, several people were convicted of criminal copyright infringement, including the site’s founder Hana Beshara who was sentenced to 22 months in prison.

Intriguingly, Megaupload also played a role in the NinjaVideo prosecution, and vice versa.

In 2010, the FBI served Dotcom’s platform with a search warrant targeting files uploaded by NinjaVideo’s staff. Megaupload kept the file on its servers, assuming that it was supposed to do so. This decision later backfired as the NinjaVideo files were used as evidence against Megaupload in their criminal prosecution.