The Gov’t cannot force service providers to surrender information stored abroad, the Second Circuit holds

imgres-3On July 14, 2016, the Second Circuit held that U.S. law does not authorize a warrant against a U.S.-based service provider for the seizure of e-mails stored in Ireland.

In December 2013, a New York district court issued a warrant ordering Microsoft to produce all emails and private information associated with a certain account hosted by Microsoft.

Microsoft disclosed all information kept within the U.S., and moved to quash the warrant as for  user’s content stored in Dublin, Ireland.

The magistrate denied Microsoft’s motion to quash, concluding that the Stored Communications Act (SCA) authorized the District Court to issue a warrant for “information that is stored on servers abroad” and ordered Microsoft to hand over the user’s emails even if stored in Dublin. See here.

Microsoft appealed the magistrate judge’s decision to Chief Judge Preska, who, on a de novo review and after a hearing, adopted the magistrate judge’s reasoning and affirmed his ruling from the bench. See here.

Microsoft appealed to the Second Circuit, which ultimately reversed the District Court’s denial of Microsoft’s motion to quash.

Microsoft and the Government disputed the nature and reach of the warrant: while Microsoft emphasized how the term “warrant” traditionally carries territorial limitations, the government, characterized the dispute as merely about “compelled disclosure,” regardless of the label appearing on the instrument,posing that warrant which is“similar to a subpoena” requires “the recipient to deliver records, physical objects, and other materials … in … [his] custody or control”. The location would not matter

The Second Circuit held that the district court erred because the SCA does not authorize to issue warrants against U.S.-based service provider for the seizure of customer e-mail content stored exclusively on foreign servers.  The court found Microsoft’s argument more persuasive. It inquired “into whether Congress, in enacting the warrant provisions of the SCA, envisioned and intended those provisions to reach outside of the United States”. It reasoned that the SCA does not envision the application of its warrant provisions overseas and it concluded that “execution of the Warrant would constitute an unlawful extraterritorial application of the Act”.

In his concurring opinion, Judge Lynch noted that if Microsoft had chosen to store the emails in the U.S., the warrant would have been valid regardless of the customer’s location and regardless of Microsoft’s home in the United States.  Judge Lynch, wonders “whether Microsoft can thwart the government’s otherwise justified demand for the emails at issue by the simple expedient of choosing – in its own discretion – to store them on a server in another country”. The Judge suggested that Congress should revise a “a badly outdated statute”.

Microsoft Corp. v. United States (In re Warrant to Search a Certain E-Mail Account Controlled & Maintained by Microsoft Corp.), 2016 U.S. App. LEXIS 12926 (2d Cir. N.Y. July 14, 2016) is available at…          Open PDF

Judge Lynch concurring opinion is available at…                        Open PDF

 For more information, Francesca Giannoni-Crystal

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