In the matter of a warrant to search a certain email account controlled and maintained by Microsoft Corporation, 13 Mag. 2814
In April, a US magistrate judge compelled production of the contents of a user's email account stored on a Microsoft server in Dublin. If this ruling stands, US service providers may be compelled to produce customer's data regardless of where it resides.
In December 2013, the Southern District Court of New York directed Microsoft Corporation to produce to US law enforcement agencies the contents of a customer email account contained on a server located in Ireland. The case, which is ongoing at the time of writing, is controversial and has potentially far reaching ramifications for international providers of cloud and communications services.
The Court determined the case by reference to the US Stored Communications Act of 1986 ('SCA'), which forms part of the Electronic Communications Privacy Act ('ECPA'). Under the original application in December 2013, Judge James C. Francis IV granted a warrant under the SCA (the 'Warrant') to compel the provision of detailed customer data to the US government notwithstanding that the data was held by a separate Microsoft subsidiary company in Ireland. Microsoft Corporation disputed theWarrant and applied to have it vacated on the basis that a warrant could not have extraterritorial effect and that it was therefore invalid. In April 2014, the matter was referred back to Judge Francis who denied Microsoft's motion.
TheWarrant was granted to enable the search and seizure of information associated with an email account that was 'stored at premises owned,maintained, controlled or operated by Microsoft Corporation, a Company headquartered at One MicrosoftWay, RedmondWA.' Microsoft complied by sending non-content information contained on servers in the US and filed to quash theWarrant to the extent that it applied to content information stored in Dublin on the basis that federal courts do not have the authority to order the production of material outside of their jurisdiction.
Microsoft's analysis was acknowledged by Judge Francis to be consistent with the language of the SCA. However the judge went on to review case law on statutory interpretation by reference to the structure of the SCA as well as its legislative history. In a surprising judgment, the court concluded in support of the government's view that the normal presumption against extraterritoriality did not apply in this instance.
Part of the reasoning used by the court to find that normal extraterritoriality rules did not apply to a warrant issued under the SCA was that it was a hybrid instrument which had some characteristics of a subpoena which, as some case law suggested, could be valid overseas. However, equally, the instrument bore characteristics of a traditional warrant.While characteristics of both instruments are briefly explored in the ruling, the court settled upon the definition of the instrument as a subpoena for the purposes of extraterritoriality, although the precise basis on which this distinction was determined is not entirely clear.
The Court did consider United States v. Bach, 310 F.3d 1063 (8th Cir. 2002), which used the warrant standard to assess the instrument in question, stating that 'Congress called them warrants and we find that Congress intended them to be treated as warrants.'However, Judge Francis distinguished this ruling on the basis that this statement was not made in the context of extraterritoriality (although the judgment does not explain the basis on which an instrument could be considered a 'subpoena' for the purposes of extraterritoriality while being called a 'warrant' in the legislation).
The ruling relies upon other perceived linguistic ambiguities contained in Senate reports around the time of the adoption of the SCA. It also uses notes that one of the notable provisions of the US Patriot Act was to provide for nationwide service of search warrants for electronic evidence so as to alleviate the burden on federal district courts in California and Virginia where many internet service providers are located.
The Judge made the novel determination that this national principle was capable of being extended on an international basis. Microsoft appealed the April 2014 ruling but following oral submissions, the District Court issued a further order on 31 July confirming its original ruling. Microsoft issued appeal papers while the government brought a motion to deny the appeal and to direct Microsoft to comply with the Warrant.
The issue then arose as to whether the case met the conditions required for Microsoft to be granted a stay pending appeal. These conditions are similar to the conditions required for a civil injunction; namely (a) whether the stay applicant has made a strong showing that he is likely to succeed on the merits; (b) whether the applicant will be irreparably injured if the stay is not granted; (c) whether the issuance of a stay would substantially injure the other parties interested in the proceeding; and (d) public interest. The Court noted that an order denying a motion to quash a subpoena is not a final decision, the reasoning being procedural i.e. if one objects to a subpoena then the correct way to challenge it is to refuse to comply, to be held in contempt and to appeal the contempt proceedings. Chief US District Court Judge Preska denied the application for a stay, finding it an inefficient use of resources to have the matter before the District and Appeals courts at the same time. This left Microsoft in the position of having to put itself in contempt of Court if it wished to maintain its challenge to the Warrant.
The Judge Francis ruling is remarkable when viewed in the context of international law. A fundamental rule of international law is that domestic statutes have no extraterritorial force. This rule was upheld in Zheng v. Yahoo! Inc., No. C-08-1068MMC, 2009WL 4430297 (N.D. Cal. 2009). In that case, the plaintiffs sought to hold the defendant liable for Yahoo! China's alleged provision of personal data to Chinese law enforcement agencies. The plaintiffs argued that the fact that their communications were routed through the defendant's servers was enough to impose liability under the ECPA.
In Zheng, the court found that an electronic communication must be intercepted or disclosed in the US to create ECPA liability. Judge Chesney also considered the legislative history of the ECPA. She recited theWiretap Act and referred to case law1 which stated that the statute had no application outside the US. Judge Chesney came to a different conclusion: 'The ECPA did not amend the portion of theWiretap Act that made no provision for obtaining authorization for wiretaps in a foreign country, nor did the ECPA, in amending theWiretap Act and creating the SCA, reference in any manner activities occurring outside the United States [...] Congress has not made clear an intent that the ECPA apply outside the United States, and, indeed, the available legislative history clearly reflects the congressional intent that the ECPA not apply outside the United States.'
Mutual legal assistance
Another remarkable feature of the ruling in Microsoft is the lack of any meaningful consideration of the Mutual Legal Assistance Treaty ('MLAT') between Ireland and the US. The MLAT process is an international mechanism for enabling law enforcement authorities to obtain access to evidence located in another Treaty Member's country. Under the Irish Criminal Justice (Mutual Assistance) Act 2008, the Irish authorities rarely refuse to execute a request from US authorities.
In this case, Judge Francis found that Congress was 'unlikely' to have intended to require law enforcement to use the MLAT process when acting upon an SCA warrant because it is sometimes slow;Member States may refuse requests; and it is unavailable when no treaty is in place. Several Amici Curiae briefs have been submitted. In one of them2, counsel for Cisco and Apple claim that '[...]by dismissing the [MLAT] process out of hand with no factual findings regarding the Irish MLAT at issue - the Magistrate placed the burden of reconciling conflicting international laws squarely on U.S. providers. Yet the government, not private parties, is best suited to navigate complex sovereignty issues, especially those caused by a novel extraterritorial application of U.S. law. And it has chosen to use the MLAT process to strike the correct balance.'
Data protection law
Another consequence of allowing the extraterritorial application of theWarrant was to potentially compel Microsoft Ireland to breach data protection laws. In Europe, the Data Protection Directive (95/46/EC) and the Council Framework Decision 2008/977/JHA regulate data transfers between law enforcement bodies and the circumstances under which data can be transferred to non-EU Member States. The Irish Data Protection Acts 1988 and 2003 permit the transfer of personal data on foot of any 'enactment, or by rule of law or order of a court.'3 However, under first principles of statutory interpretation, a data controller could only safely rely on this provision in the context of an Irish enactment or Irish court order. A US Court Order is no more binding on Microsoft Ireland as an Irish Court Order would be on Microsoft Corporation in the US. It is for this very reason that the MLAT process was established as an order executed under the MLAT Treaty and the Irish Criminal Justice (Mutual Assistance) Act 2008 would clearly be permitted on data protection grounds.
At a time when US surveillance and data security laws are under scrutiny in EU, it is regrettable that the US Court did not give further consideration to the MLAT process in this case.
It is understood that Microsoft is continuing to appeal theWarrant. At the time of writing, there has been a groundswell of support from providers all of whom have filed Amici Curiae supporting Microsoft's case.
This article first appeared in the September-October 2014 issue of E-Commerce Law Reports.
This article contains a general summary of developments and is not a complete or definitive statement of the law. Specific legal advice should be obtained where appropriate.