She said the warrants were overly broad and authorized the seizure of irrelevant material.
Megaupload, which operated sites such as Megavideo.com and Megapix.com, claimed to receive 50 million daily visitors, accounting for 4 percent of total Internet traffic. According to court documents, Megavideo.com was the world's 52nd most frequently visited website before officials shut it down.
Prosecutors accused Megaupload's owners of generating more than $175 million in revenue from the site.
According to the indictment, the employees, including Dotcom, selectively complied with requests from copyright owners to remove infringing content. They would often remove a single link to an infringing video while leaving the actual video in place, according to court documents.
Prosecutors accused the defendants of illegally hosting movies including "Thor," "Bad Teacher" and movies in the "Lord of the Rings," "Twilight" and "Harry Potter" franchises. Some of the files were uploaded just days after a film's theatrical release, according to prosecutors.
Dotcom's lawyers have insisted the site complied with copyright law and was only intended to allow users to upload their own material. They are fighting attempts to extradite Dotcom to the United States for prosecution.