U.S. judge finds for MegaUpload, orders DOJ to cooperate on user files

A judge in Alexandria, Virginia ruled Friday in favor of attorneys for the cyberlocker website MegaUpload, ordering the U.S. Department of Justice (DOJ) to work with the site's operators to return personal files to more than 60 million of the site's users.

MegaUplaod founder Kim Dotcom, an eccentric New Zealand millionaire, stands accused in the U.S. of running the largest pirate media operation in history, and is currently fighting a U.S. extradition request in his own country following a January SWAT raid on his estate. MegaUpload provided blind file hosting to its users, enabling them to upload and share anything, but it also gave content creators the ability to report and delete links to files that infringed upon copyrights.

U.S. District Judge Liam O'Grady agreed with MegaUpload attorney Ira Rothken in a hearing Friday, and ordered the DOJ to work with MegaUpload and its users to reach an amicable solution to the quandary of legitimate, non-infringing files being held in legal limbo. The question of what will happen to the files arose after an Ohio-based entrepreneur teamed up with the Electronic Frontier Foundation (EFF) to sue for access to his business files.

Prosecutors argued Friday that the DOJ should simply order the hosting company to delete MegaUpload's user files, as they've already obtained a large sample of the files to be used as evidence against MegaUpload, which will be turned over to defense attorneys amid the evidence discovery process.

The site had more than 150 million users at the time of the New Zealand raid. MegaUpload's managers have since said that its users included government workers and even congressional staffers, along with soldiers overseas who used the service to share multimedia with their families in the U.S. At least six movie studios have argued that MegaUpload was growing an illegal operation that, at its core, was just designed to facilitate piracy.

Judge O'Grady's ruling Friday is another in a series of minor victories for MegaUpload and Dotcom, who recently saw a judge in New Zealand chastise police for raiding his home based upon a bogus warrant. Officials tried to file for the correct warrant after the fact, making it retroactive. The judge said she may ultimately order that all of Dotcom's assets be returned to him, which would provide a significant boost to his legal defense. Security footage of that raid has since mysteriously disappeared while in police custody.