US-Microsoft Fight on Irish Server Heads to High Court

WASHINGTON (CN) – The Supreme Court agreed Monday to decide whether a law that predates the modern internet allows U.S. prosecutors to seize Microsoft emails abroad.

Unlike the strict warrant requirements to which physical records are subject, the warrant-subpoena hybrid of the 1986 Stored Communications Act allows prosecutors to sidestep certain Fourth Amendment protections.

Invoking this law last year for a narcotics investigation, a federal judge in New York directed Microsoft to let the U.S. government access the emails, associations, identifying information and contacts on a certain suspect who was a customer of Microsoft.

Microsoft, which houses such information on its servers in Dublin, Ireland, said the order threatened its business model, the sovereignty of other nations and the ability of tech companies to offer secure products to their users.

The government took the case to the Supreme Court after the Second Circuit reversed, finding the Stored Communications Act outdated and ill-equipped to protect modern privacy interests.

“Three decades ago, international boundaries were not so routinely crossed as they are today, when service providers rely on worldwide networks of hardware to satisfy users’ 21st-century demands for access and speed and their related, evolving expectations of privacy,” U.S. Circuit Judge Susan Carney wrote for the unanimous court in July 2016.

Six months later the Manhattan court refused 9-4 to hold an en banc rehearing on the case.

“We recognize at the same time that in many ways the SCA has been left behind by technology,” Carney wrote in a 14-page opinion explaining the order. “It is overdue for a congressional revision that would continue to protect privacy but would more effectively balance concerns of international comity with law enforcement needs and service provider obligations in the global context in which this case arose.”

Typically, seizures crossing national boundaries require diplomatic channels known as mutual legal assistance treaties (MLATs). Carney noted that doing an end-run around this process would invite other countries to do the same to U.S. citizens.

“With a less anachronistic statute or with a more flexible armature for interpreting questions of a statute’s extraterritoriality, we might well reach a result that better reconciles the interests of law enforcement, privacy, and international comity,” the opinion states.

Per its custom, the Supreme Court did not issue any comment Monday in agreeing to take up the case.

 

Noel Francisco will argue for the U.S. Solicitor General’s Office, with Microsoft represented by E. Joshua Rosenkranz of Orrick, Herrington & Sutcliffe.

Vermont and several other states have intervened in the case as well.

Blogging about the development Monday, Microsoft President and Chief Legal Officer Brad Smith repeated his call for Congress to modernize the Stored Communications Act.

“The continued reliance on a law passed in 1986 will neither keep people safe nor protect people’s rights,” Smith wrote. “If U.S. law enforcement can obtain the emails of foreigners stored outside the United States, what’s to stop the government of another country from getting your emails even though they are located in the United States?”

Smith noted that the Second Circuit also urged Congress to act, and that the sentiment has support with many members of Congress.

“The current laws were written for the era of the floppy disk, not the world of the cloud,” Smith wrote. “We believe that rather than arguing over an old law in court, it is time for Congress to act by passing new legislation, such as the International Communications Privacy Act (ICPA) of 2017.”

American Express noted Monday that it is eager to take the fight to Washington.

“As we have stated previously, the earlier decision by the Second Circuit panel protects a consumer’s right to choose how they pay, prevents our card members from being discriminated against and promotes competition in the payments industry,” the company said in a statement. “With the Supreme Court’s decision to take up this case, we believe the government’s claims lack merit and we will continue to vigorously defend the Second Circuit’s decision in favor of American Express.”

Speaking to Courthouse News reporter Adam Klasfeld about the Second Circuit’s ruling earlier this year, the Brennan Center’s Michael Price called the order a clear signal for legislators to revamp the Stored Communications Act.

“The law itself is as old as the internet, a little bit older, and is not really in tune with privacy in a digital age,” said Price, who signed a friend-of-the-court brief supporting Microsoft. “This is a call for Congress to overhaul the law.”

Sen. Orrin Hatch, an archconservative Republican from Utah, has supported the Department of Justice’s expansive vision of its seizure power around the world with the Law Enforcement Access to Data Stored Abroad Act.

On the diplomatic front, President Barack Obama’s administration supported investing $24.1 million in the perpetually underfunded MLAT process to coordinate law-enforcement actions with other nations.

The White House website describing this initiative quickly disappeared, however, under Donald Trump administration.

Writing for the four votes in favor of a rehearing, U.S. Circuit Judges Dennis Jacobs argued that the location of Microsoft’s headquarters in the United States makes the location of the servers immaterial.

“Extraterritoriality need not be fussed over when the information sought is already within the grasp of a domestic entity served with a warrant,” the 5-page dissent states. “The warrant in this case can reach what it seeks because the warrant was served on Microsoft, and Microsoft has access to the information sought. It need only touch some keys in Redmond, Washington.”

U.S. Circuit Judges Jose Cabranes, Reena Raggi and Christopher Droney each joined Jacobs’ dissent and wrote separately as well.

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