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January 23, 2012 5:33 PM

Report: Client Conflict Leads Hogan Lovells Partner Bennett to Drop Megaupload Assignment

Posted by Brian Baxter

UPDATE: 1/25/11, 10:21 a.m. Megaupload's founder, Kim Dotcom, has been denied bail in New Zealand, while the company's U.S. lawyer, Ira Rothken, has likened his client to YouTube.

A prominent trial lawyer who said last week that he would defend the operators of file-sharing Web site Megaupload against charges that they had violated federal copyright and online piracy laws has reportedly dropped the case due to a client conflict involving his firm.

Hogan Lovells partner—and well-known Beltway litigator—Robert Bennett told The Associated Press on Friday that he would represent Hong Kong–based Megaupload, which was indicted January 19 in federal district court in Alexandria, Virgina, for allegedly reaping more than $175 million by unlawfully distributing copyrighted content. (The 72-page indictment names two corporations, Megaupload Limited and Vestor Limited, as well as seven individuals.)

"We intend to vigorously defend against these charges," Bennett told the AP. Two days later, though,  Reuters reported that a conflict with at least one unidentified Hogan Lovells client would preclude Bennett from taking the case.

Four of the seven executives charged in the indictment, including Megaupload's German millionaire founder, Kim Schmitz, were arrested Friday in New Zealand. The Sydney Morning Herald reported that Schmitz, who has legally changed his name to Kim Dotcom, was found in the safe room of a mansion he owns in Auckland.

Prominent New Zealand barrister Paul Davison is representing Dotcom, who appeared before an Auckland court on Monday to deny the Justice Department's charges. Dotcom was denied bail on the grounds that he might be a flight risk, despite Davison's argument that his 6-foot-6-inch client would be unable to pass through customs unnoticed.

Davison did not immediately respond to an e-mail seeking the identities of other attorneys representing Megaupload and the individuals named in the federal indictment. Technology attorney Ira Rothken, who runs the Rothken Law Firm in Novato, California, told Reuters over the weekend that he is representing Megaupload in the United States.

"Who is or isn't on the criminal defense team is still being decided," said Rothken, who also told Reuters that Bennett had been advising Megaupload on matters unrelated to the criminal case before the indictment was announced.

Bennett and Hogan Lovells weren't saying anything Monday. Bennett, who joined the firm in 2009 from Skadden, Arps, Slate, Meagher & Flom, did not return a call seeking comment. A Hogan Lovells spokesman told The Am Law Daily he was checking to see what, if any, comment the firm would have on the matter.

It's not surprising that a potential conflict might arise in connection with the Megaupload case. One of Hogan Lovells's largest clients is media conglomerate News Corporation, whose entertainment units include Hollywood studio 20th Century Fox. Company founder Rupert Murdoch recently lashed out at the Obama administration over its opposition to the existing versions of a pair of anti–online piracy bills scuttled by Congress last week.

The government itself is feeling some blowback for its online piracy efforts. Hackers shut down the Web sites of the U.S. Department of Justice and the Federal Bureau of Investigation last week in an apparent cyberattack protesting the charges against Megaupload.

Hackers also targeted the Web sites of Universal Music Group, the Motion Picture Association of America, and the Recording Industry Association of America.

 

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