Second Circuit Rules Federal Warrants Do Not Apply to Electronic Information Stored Overseas
Wednesday, July 20, 2016
On July 14. 2016, the Second Circuit ruled that the government cannot lawfully use a search warrant to compel access to consumer data stored by Microsoft Corporation (Microsoft) overseas.1 In its decision, the court overturned a district court order2 denying Microsoft’s motion to quash the warrant and holding Microsoft in contempt for its failure to comply with the warrant.
The dispute arose in connection with the U.S. Department of Justice (DOJ)’s efforts to execute a warrant under the Stored Communications Act (SCA) to seize emails that Microsoft stores in Dublin, Ireland.3 U.S. investigators were seeking the information from Microsoft as part of a narcotics investigation. In seeking to quash the warrant, Microsoft argued that Congress did not intend the SCA’s provisions to apply internationally. Microsoft pointed to the use of the term “warrant” in the SCA and argued that warrants traditionally have territorial limitations. Further, according to Microsoft, Congress did not intend to expand the reach of warrants under SCA and doing so would potentially expose U.S. citizens to similar overreach by foreign governments. Several large companies have filed amicus briefs in support of Microsoft’s position. In essence, Microsoft and supporting amici asked the Second Circuit to prevent the DOJ from forcing them to become agents of the government (by collecting information sought by the DOJ) and to curtail the DOJ’s use of shortcuts around treaties and other processes for handling international information requests through the domestic court system. In response, the DOJ maintained that the key question was not whether the data was stored abroad or domestically, but rather whether Microsoft, as a company subject to the DOJ’s jurisdiction, maintained control over the information sought by the warrant.
The Second Circuit agreed with Microsoft’s position, and held that SCA does not “authorize courts to issue and enforce against U.S.-based service providers warrants for the seizure of customer e-mail content that is stored exclusively on foreign servers.” The court’s opinion emphasized that the presumption that U.S. laws do not apply exterritorialy was not overcome. Further, according to the court, SCA was passed primarily as a privacy protection law and its language embodies “an expectation of privacy in [electronic] communications. . . and [imposes] procedural restrictions on the government’s (and other third party) access to priority stored communications.” Allowing the government to access data stored abroad would be inconsistent with the goals of the law. The court’s decision prevents the DOJ from accessing internationally stored electronic information by an SCA warrant, and requires that the government seek this information through treaties and other processes established with foreign governments to handle such requests.
1 In re Warrant to Search a Certain E-Mail Account Controlled & Maintained by Microsoft Corp., No. 14‐2985 (2d Cir. July 14, 2016). The Second Circuit’s decision is available here.
2 In re Warrant to Search a Certain E-Mail Account Controlled & Maintained by Microsoft Corp., No. 13-MJ-2814, 2014 WL 4629624 (S.D.N.Y. Aug. 29, 2014).
Chelsea L. O’Donnell concentrates her practice on white collar criminal defense, internal investigations, and regulatory enforcement matters. She represents clients in connection with Foreign Corrupt Practice Act (FCPA) compliance, securities fraud, and public corruption. Chelsea assists corporate clients with internal investigations of potential misconduct, often in response to allegations of fraud or insider trading. She also represents clients who face civil suits and regulatory actions in connection with criminal matters, including SEC and FINRA investigations and...
Philip J. Bezanson's practice focuses on white collar criminal defense, internal investigations, securities enforcement and regulatory matters.
Mr. Bezanson is a member of the Bracewell & Giuliani LLP team that has represented corporate and individual clients in recent high-profile and complex cases, including the Deepwater Horizon explosion, the George Washington Bridge lane closure and General Motors ignition switch investigations, "Pay to Play" cases in New York, New Mexico and Illinois, the stock options backdating cases, and a variety of matters involving the Foreign Corrupt Practices Act, accounting practices at publicly traded companies, and trading desks at financial institutions. Mr. Bezanson regularly defends corporations and executives facing allegations of securities fraud, antitrust violations, environmental crimes, bribery, mail/wire fraud, tax offenses and other business crimes or regulatory violations. He also conducts internal investigation work on behalf of corporate clients, their boards of directors or board sub-committees.
Glen Kopp, former Assistant United States Attorney in the Southern District of New York, is a partner in Bracewell & Giuliani’s white collar, internal investigations and regulatory enforcement practice in New York. Prior to joining the firm, he served for five years in the U.S. Department of Justice, handling all phases of the federal criminal process.
In private practice and at DOJ, he has handled regulatory enforcement matters, criminal proceedings, litigation and internal investigations relating to financial institutions; corporate,...