Judge considers hearing on improper Megaupload seizure

There's disagreement about how many legitimate Megaupload customers there were. Megaupload has claimed 180 million customers, but the DOJ contends there were less than 67 million registered users just before the site was shut down. Less than 6 million customers ever uploaded a file to Megaupload, the DOJ contends.

Samuels noted that a New Zealand judge ruled this week that the search warrants used to seize external hard drives, laptops and phones from founder Dotcom's mansion in January were illegal.

O'Grady asked if the DOJ has prevented Goodwin from accessing his files.

"Absolutely, it has," said Abraham Sofaer, another lawyer representing Goodwin. "These warrants are highly questionable, based on any logic."

Separately on Friday, O'Grady rejected requests by Megaupload's lawyers to challenge the DOJ seizure of the company's assets, saying the request is premature. Dotcom and other defendants are challenging extradition to the U.S., and he's still considering the motion to dismiss the case, he wrote.

Friday's hearing was encouraging for Goodwin and other people who stored legal files on Megaupload, Samuels said. O'Grady "appears to be concerned" about people who stored legitimate files on the service, she said.

Nearly everyone, "except the government," understands the need for customers to recover their files, she said.

Grant Gross covers technology and telecom policy in the U.S. government for The IDG News Service. Follow Grant on Twitter at GrantGross. Grant's e-mail address is grant_gross@idg.com.