Government Cannot Seize Data on Foreign Servers

It is rare for the federal government to lose in court, especially when it asserts law enforcement interests. That is why it’s all the more surprising that the U.S. Court of Appeals for the Second Circuit ruled against the federal government’s demand to access data on computers owned by American companies abroad. This important case is called Microsoft Corp. v. United States. On the government’s petition for rehearing by the Court, the government lost by a tie vote of 4-4. A majority is needed to grant rehearing, and the government fell short by merely one vote.

The federal government had ordered Microsoft to turn over copies of emails that were being stored on its computer servers in Ireland. The government relied on the Stored Communications Act, which was signed into law by President Reagan in 1986 as Title II of the Electronic Communications Privacy Act (ECPA).

A federal magistrate judge had found probable cause that emails held on computer servers in Ireland contained evidence of a crime. Microsoft had control of those computer servers but they refused to comply with the order since the servers were outside of the United States. Microsoft even allowed itself to be held in contempt of court rather than turn over the emails. They immediately appealed the ruling to the Second Circuit, where Microsoft prevailed in a unanimous decision allowing it to withhold the emails.

The Second Circuit held that the ECPA does not extend to data on computer servers located outside of the United States. On the petition for rehearing by the entire Second Circuit, each of four judges asserted their passionate dissents. This was an extraordinary display of their disapproval of the ruling by the Court to allow companies to conceal emails from law enforcement. The judges on both sides of this issue lamented how the federal law is three decades old. The original law was enacted long before the massive expansion in the use of email and social media. An appeal to the U.S. Supreme Court is likely in this case’s future.

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