Megaupload founder Kim Dotcom can sue New Zealand spy agency, court rules

A court ruled on Thursday that Megaupload founder Kim Dotcom can sue New Zealand’s spy agency for illegal surveillance, opening the government up to more scrutiny over its role in an unlawful 2011 police raid on the internet entrepreneur’s home.

The New Zealand Appeals Court rejected an application from the attorney general, acting on behalf of the Government Communications Security Bureau (GCSB), to exclude the agency from the lawsuit. New Zealand’s High court ruled last year the agency could be held liable for illegally spying on Dotcom.

Dotcom is seeking damages from the government for its role in a raid in January 2011, when New Zealand police helicopters swooped on the flamboyant entrepreneur’s mansion at the request of US authorities.

The US Federal Bureau of Investigation accuses Dotcom of leading a group that netted US$175 million since 2005 by copying and distributing copyrighted content without authorisation.

The GCSB was found to have spied on Dotcom in the run-up to the 2011 raid, prompting an apology from the prime minister. Also known as Kim Schmidt, Dotcom is a German national but with residency in New Zealand, which made it illegal to spy on him.

Lawyers had argued that the government should not be required to be named twice as a defendant in the compensation suit, given that it is already listed as representing New Zealand police.