Supreme Court to Decide Important Privacy Issue: Is Overseas Data Retrievable Under SCA?

The U.S. Supreme Court announced on Monday that it will decide whether federal warrants under the Stored Communications Act, 18 U.S.C. §§ 2701 et. seq., (the “SCA”), can be used by the government to retrieve emails stored abroad. United States v. Microsoft Corp., No. 17-2 (Oct. 16, 2017) (order granting petition for certiorari). 

This case began four years ago when Microsoft refused to provide customer data which was housed on servers located in Ireland in response to a warrant issued under the SCA by a federal judge in New York in a criminal investigation. The magistrate judge denied Microsoft’s motion to quash the warrant and later held Microsoft in contempt for its continued noncompliance. (To learn more about this decision, please see our alert from July 19, 2016.)

However, the U.S. Court of Appeals for the Second Circuit agreed with Microsoft. It overturned the lower court’s decision, holding that warrants issued under the SCA did not reach extraterritorial jurisdictions due to the statute’s plain meaning, the intended goal of protecting privacy, and the general presumption against applying domestic law extraterritorially. Microsoft v. United States, 829 F.3d 197 (2d Cir. 2016). Microsoft and other companies often store emails sent and received by users located in the United States on servers in foreign countries.

The U.S. Department of Justice (“DOJ”) unsuccessfully challenged the Second Circuit’s opinion through a petition for rehearing, in which it argued, among other things, that prohibiting access to overseas data through the use of warrants issued under the SCA would weaken “an essential investigative tool” and ignore how data is practically stored by domestic companies.  (To learn more about this petition, please see our alert from October 31, 2016.) The Second Circuit denied the DOJ’s petition. Microsoft Corp. v. United States, 855 F.3d 53 (2d Cir. 2017).

Since the Second Circuit’s decision, courts have issued conflicting opinions which have left businesses unsure of how to respond to warrants issued under the SCA. (To learn more about these decisions, please see our alert from February 23, 2017.) In addition, the DOJ and some technology companies have each proposed changes to update the more than 30-year-old SCA to make it applicable to current technology and data storage practice.   

While the DOJ has framed this case as crucial to the efficacy of government investigations and national security, Microsoft has maintained that the SCA was not meant to have an international reach. The Supreme Court’s decision will resolve uncertainty surrounding the scope of the SCA and have significant privacy implications.

For more information about the this alert, please contact Jonathan Feld (jfeld@dykema.com), Christina Brunty (cbrunty@dykema.com), Edwin Tomko (etomko@dykema.com), Jason Ross (jross@dykema.com), Erin Fonté (efonte@dykema.com),  or Aaron Charfoos (acharfoos@dykema.com), or your Dykema relationship attorney.