Megaupload's legal team is protesting against a sealed court order which allows the U.S. Government to share evidence from the Megaupload case with copyright holders. The Government believes this is necessary to assist rightsholders in potential civil action against the defunct file-hosting site. According to Megaupload's legal team, however, allowing the Government to spread a "one-sided, cherry-picked set of facts" will hurt its former users and infect the jury pool.

After five months without any progress in the criminal case against Megaupload, Kim Dotcom’s legal team has discovered that the U.S. Government has been granted permission to share critical case evidence with copyright industry groups.

An ex-parte order was issued last month and filed under seal, which means that its exact contents remain hidden. The information available reveals that the Government intends to share MD5 hash values of Megaupload users’ files, among other things.

Megaupload’s legal team is not happy with the ‘secret’ order and TorrentFreak has obtained a letter in which they voice their concerns to the U.S. federal court.

“It has been brought to our attention by Mr. Dotcom’s New Zealand counsel that this Court issued a sealed ex parte order on November 22, 2013, which requires that the Government publicly disseminate, through trade organizations and a press release, certain information related to the above-captioned matter,” the letter begins.

The lawyers claim that with the covert filing the U.S. Government has deprived the defendants of their due process rights. The order was issued without proper justification, they claim, as there is no valid reason to conceal it from Megaupload and the other defendants.

“The defendants have been indicted, their assets have been frozen, their business has been destroyed, and their liberty has been restrained. Given these constraints, it is unclear what evils the Government fears defendants will inflict if provided notice of the Government’s submission, beyond having Defendants’ counsel come into court to make opposing arguments,” the lawyers write to the court.

According to the available information the U.S. Government is aiming to help copyright holders who may want to file civil lawsuits against Kim Dotcom and Megaupload. The Government fears that if this doesn’t happen quickly, the alleged copyright violations may expire due to the statute of limitations.

Megaupload’s legal team disagrees with this line of reasoning and points out to the court that over the past months the Government did not appear to be in a hurry at all.

“Any claimed urgency, however, is entirely manufactured, given that the Government first indicted the defendants on January 5, 2012 and has made no previous effort to publicize the information. Having sat on its hands for nearly two years, the Government cannot credibly claim that circumstances are sufficiently exigent to outweigh defendant’s due process rights,” they write.

“Now, after two years, the Government is suddenly reversing course and claiming it is imperative to get its biased, selective account of the evidence out to the public. The claim of emergency rings hollow.”

The legal team further points out that the request goes against the law. The Government cites the Crime Victims Rights Act (CVRA) as an authority, however, the Fourth Circuit has indicated that the CVRA is “silent and unconcerned” with the rights of supposed victims to file civil claims.

Furthermore, the disclosure of evidence is problematic because it allows the Government to carefully select information that can tip the balance in their favor when it becomes public.

“The Government’s request also substantially prejudices the defendants in the case. Permitting the Government to widely disseminate a one-sided, cherry-picked set of facts threatens to improperly infect the jury pool before defendants are afforded any opportunity to present their side of the story.”

Among the information the Government intends to release are MD5 hash values of the files Megaupload users have stored. The lawyers point out that this information “implicates important privacy rights” of the company’s former customers.

All in all Megaupload sees the latest filing as yet another attempt to put the defendants at a disadvantage.

“From the outset of this prosecution, the Government has sought to deny defendants any semblance of due process. The Government has frozen every penny of defendants’ assets, made frivolous attempts to disqualify defendants’ counsel of choice, and sought at every turn to block defendants from filing briefs in their own defense.”

“The instant effort to circumvent the adversarial process through an ex parte filing is merely the latest example of this troubling pattern.”

Considering the above, the lawyers ask the court to withdraw the November 22 order. In addition, Megaupload’s legal team wants to be able to access and oppose the filings that formed the basis of the order.

It is now up to Judge Liam O’Grady to evaluate whether Megaupload’s protest is warranted and how to proceed.

While the covert action by the Government is already quite significant in its own right, it also suggests that copyright holders are considering legal action against Megaupload and Kim Dotcom. Since the MPAA has been very involved in the case from the start, the Hollywood studios are the prime candidate for such a civil proceeding.

Previously the MPAA asked the court to retain the files stored on Megaupload for possible legal actions to be taken against the companies and those associated with it.

“Independent of the ongoing criminal proceeding, the Studios have civil claims against the operators of Megaupload, and potentially also against those who have knowingly or materially contributed to the infringement occurring through Megaupload,” MPAA wrote last year.

Thus far there has been no sign that the MPAA or any individual movie studios have concrete plans to file a civil suit, but this may change in the near future.