United States: Decision Holds That Search Warrant Cannot Compel Data Stored Overseas

Last Updated: July 22 2016
Article by Mark Krotoski and Ellie F. Chapman

The landmark ruling is the first by a federal court of appeals to address the extraterritoriality of the Stored Communications Act.

Microsoft and other US-based internet service providers won a major victory on July 14 at the US Court of Appeals for the Second Circuit, which held that the company is not required to comply with a federal search warrant for customer emails stored on a server in Dublin, Ireland.1 The ruling is the first by a federal court of appeals to address the extraterritoriality of the Stored Communications Act (SCA) often used in government investigations to obtain data.2 Whether other courts will follow this groundbreaking ruling remains to be seen.

Case Background

The case involved a search warrant issued by a federal judge in New York for the email content and records of a suspect in a drug trafficking investigation. The search warrant was issued under the SCA, a statute first enacted in 1986 and amended by Congress over the years. Upon a proper showing, the government uses the SCA to compel disclosure of information from network service providers, including the content of electronic communications, transactional records and account logging information, and customer account information.3

The wrinkle in the case was that some of the requested data was stored in Microsoft computers in Ireland. In response to the search warrant, Microsoft provided noncontent data on the requested email account that was stored in the United States but filed a motion to quash the search warrant for customer content data stored in Ireland, arguing that the government lacked authority to compel the production of data stored outside the United States. The SCA is silent on the statute's reach outside the United States, including under the warrant provision.

On April 25, 2014, a federal magistrate judge ruled that Microsoft must produce the emails stored on the Ireland-based Microsoft computers.4 In doing so, the magistrate judge adopted the government's view that an SCA warrant is more akin to a subpoena than a search warrant and that a properly served subpoena would compel production of any material, including customer content, so long as the material is stored at premises "owned, maintained, controlled, or operated by Microsoft Corporation." The fact that those premises were located abroad was, in the magistrate judge's view, of no consequence.

On July 31, 2014, the district judge overseeing the matter upheld the search warrant but stayed the ruling pending appeal. At the hearing, the district judge concluded that "the structure, language, legislative history, Congressional knowledge of precedent, . . . all lead to the conclusion that Congress intended in this statute for ISPs to produce information under their control, albeit stored abroad, to law enforcement in the United States."5 Microsoft appealed the ruling to the Second Circuit. The case was argued on September 9, 2015, and many have been awaiting the ruling on the novel issues presented in the case.

The Second Circuit Ruling

On July 14, 2016, the Second Circuit overturned the lower court's ruling, holding that the SCA's Warrant Provisions do not give investigators the ability to force Microsoft to produce data stored on overseas servers.6 In its ruling, the Second Circuit focused on the presumption against extraterritorial application of US statutes—meaning that congressional legislation is presumed to apply only within the territorial jurisdiction of the United States, unless a contrary intent clearly applies.7

With this principle in mind, the Second Circuit analyzed the SCA's warrant provision to determine whether Congress contemplated extraterritorial application of the statute. The court "disposed of this question with relative ease," given that the government conceded at oral argument that the warrant provision of the SCA did not contemplate or permit extraterritorial application. The Second Circuit then "confirm[ed] the soundness" of the government's concession through an analysis of the statute's plain meaning. The court found it significant that no provision in the SCA mentioned any extraterritorial application or even alluded to any such application. The court also found it instructive that the SCA used the term "warrant," a centuries old legal term moored in privacy concepts applied within the territory of the United States. In doing so, the circuit rejected the lower court's finding that an SCA warrant more closely resembles a subpoena than a warrant.

The court then went on to determine the SCA's focus. Through an analysis of the statute's various provisions and legislative history, the court concluded that the SCA's main focus was to protect users' privacy interests in stored communications. Having determined that the SCA did not contemplate extraterritorial application and that the SCA focused on user privacy, the court held that the execution of the warrant in this instance would constitute an unlawful extraterritorial application of the SCA. The district court "lacked authority to enforce" the search warrant. In reversing, the case was remanded "with instructions to the District Court to quash the Warrant insofar as it directs Microsoft to collect, import, and produce to the government customer content stored outside the United States."


In a concurring opinion, Second Circuit Judge Gerard E. Lynch agreed with the holding of the majority opinion that the SCA should not be construed to require Microsoft to turn over email content stored on Ireland servers but wrote separately to clarify his view that the dispute in this case was not about privacy, but rather about the international reach of US law.

His concurrence noted that—contrary to the majority opinion, which emphasized how this case posed a government threat to individual privacy—the case involved the issuance of a search warrant based on probable cause. In other words, the government had already complied with the most restrictive privacy-protecting requirements of the SCA as well as the highest level of protection ordinarily required by the Fourth Amendment. In light of this fact, Judge Lynch rephrased the issue in the case as "whether Microsoft can thwart the government's otherwise justified demand for the emails at issue by the simple expedient of choosing—in its own discretion—to store them on a server in another country." He noted, moreover, that the opinion represented a win for consumer privacy "as against the government." But that consumer privacy remains protected against Microsoft only to the extent defined by a consumer's adhesion contract with the company.

Critically, Judge Lynch emphasized that questions about the international reach of US law, like the questions presented in this case, are "entirely left to Congress." In his view, the primary reason for Microsoft's victory was the lack of evidence that Congress had even considered the important policy issues at stake in this case. His concurrence emphasized, above all else, a great need for congressional action to revise a "badly outdated statute."

Initial Ramifications and Observations

Many have been waiting for this ruling since the case was argued 10 months ago. Some initial observations follow.

Limited Initial Precedent

Presently, the ruling only applies to federal courts in the Second Circuit, which includes Connecticut, New York, and Vermont. Federal courts outside the Second Circuit are not bound by the new ruling and may reach other conclusions. In fact, in the past, the federal courts have divided on other aspects of the SCA.

Supreme Court Review

Ultimately, the US Supreme Court may determine the SCA's reach. Normally, the Supreme Court waits to exercise its discretion to hear a case until the issue has been considered by other courts. It also remains to be seen whether the government may seek Supreme Court review in the Microsoft case.

Will Congress Update the SCA?

Whether Congress will intervene remains a looming question, particularly in light of Judge Lynch's concurrence. For several years, legislation has been introduced to update the SCA based on contemporary practices. Each time, the legislation has stalled.

The opinion, of course, turned on the Second Circuit's interpretation of the SCA—a 30-year-old statute passed before the widespread use of email, instant messages, and storage of data on networks of servers located around the world. Today, information is increasingly being housed in massive international data centers, a situation that the SCA could hardly have anticipated when it was written three years before the invention of the World Wide Web. Ultimately, Congress may decide how to strike the privacy balance and what standards and scope will apply to government demands for data.

Impact on Recent EU Data Transfer Issues

For now, the court's ruling also avoids a major conflict between EU and Irish laws that protect personal data located in Ireland from being delivered to US law enforcement through a warrant from the United States. The US government's ability to compel the production of personal data located abroad has been a significant policy issue concerning the establishment of an EU-US Privacy Shield.8 The court decision also avoids a conflict with the new European General Data Protection Regulation (GDPR) and the Schrems decision of the European Court of Justice of last October.9

Scope of Government Authority to Compel Data Production

The ruling reflects another round as part of a broader fight between Silicon Valley (and other technology companies) and Washington over how much authority the government has to force technology companies to provide data in investigations.

On the other hand, the government, in some circumstances, may now be faced with the additional hurdle of requesting evidence through foreign governments—through a Mutual Legal Assistance Treaty request—a process that can be time-consuming and onerous.10

Fact-Specific Inquiry

The question on the scope of the government's authority will continue to turn on the particular facts of the case. The manner in which the data is obtained and stored abroad may be relevant.

In the Microsoft case, the data was automatically stored in Ireland based on the user's country code. Upon the transfer of the data to Ireland, "all content and non‐content information associated with the account in the United States" was deleted from US-based servers. In other cases, the facts of storage may vary.

In contrast, if the customer emails had existed somewhere in the United States at the time of the proceedings, there would have been no need for the Second Circuit to consider the presumption against extraterritoriality at all, and the government would have been able to likely obtain the suspect's emails.

The question of where data is actually located at any given time becomes particularly challenging when one considers the various and complex methods of data storage. For instance, "load balancing," a method of data storage used by many companies, distributes workloads across multiple computing resources to optimize resource use and avoid overload of any single resource. In other words, data stored by "load balancing" will be in one location in one minute—and another location the next. The inquiry becomes more challenging still when one considers that each individual company will likely have different practices regarding how it stores and accesses data.


The landmark Second Circuit ruling sheds light on an important issue confronting many companies that store some data outside the United States. Whether other courts will follow this precedent or consider other legal standards (like the two lower court judges did before the Second Circuit opinion) remains to be seen. Although the new ruling provides useful guidance on this issue, the facts of any data transfers, storage, and access will need to be considered on a case-by-case basis.


1 Microsoft Corporation v. United States of America, No. 14-2985 (2d Cir. July 14, 2016), http://www.ca2.uscourts.gov/decisions/isysquery/79f10115-e24e-49b3-b72b-1df1e7e97911/4/doc/14-2985_complete_opn.pdf.

2 Stored Communications Act, 18 U.S.C. §§ 2701 et seq.

3 18 U.S.C. §§ 2703(a)-(c).

4 In The Matter of Warrant to Search a Certain E-Mail Account Controlled and Maintained by Microsoft Corporation, 15 F. Supp. 3d 466, 477 (S.D.N.Y. 2014).

5 In The Matter Of A Warrant To Search A Certain E-Mail Account Controlled And Maintained By Microsoft Corporation, No. 13 MJ 2814, Hearing Transcript, at 69 (July 31, 2014).

6 Microsoft Corporation v. United States of America, No. 14-2985 (2d Cir. July 14, 2016), http://www.ca2.uscourts.gov/decisions/isysquery/79f10115-e24e-49b3-b72b-1df1e7e97911/4/doc/14-2985_complete_opn.pdf.

7 See, e.g., Morrison v. National Australian Bank Ltd., 561 U.S. 247 (2010); see also RJR Nabisco, Inc. v. European Cmty., No. 15-138, 579 U.S. __, 2016 WL 3369423 (June 20, 2016), https://www.supremecourt.gov/opinions/15pdf/15-138_5866.pdf.

8 Authorities and parties in Europe have claimed that the US authorities should follow the procedures under the so-called Hague Convention and Mutual Legal Assistance Treaties with Ireland. See, e.g., LawFlash, Article 29 Working Party Expresses Concerns About EU-US Privacy Shield (April 14, 2016), https://www.morganlewis.com/pubs/article-29-working-party-expresses-concerns-about-eu-us-privacy-shield#sthash.2RVULlrP.dpuf

9 In particular, Art. 48 GDPR, see LawFlash https://www.morganlewis.com/pubs/ecj-rules-eu-us-safe-harbor-programme-is-invalidon the ECJ's Schrems decision.

10 In fact, an MLAT between the United States and member states of the European Union, including Ireland, was adopted in 2003. See Agreement on Mutual Legal Assistance Between the European Union and the United States of America, June 25, 2003, T.I.A.S. No. 10‐201.1. - See more at: http%3A//www.morganlewis.com/pubs/decision-holds-that-search-warrant-cannot-compel-data-stored-overseas%23sthash.u0AMm3qf.dpuf

This article is provided as a general informational service and it should not be construed as imparting legal advice on any specific matter.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

In association with
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement

Mondaq.com (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of www.mondaq.com

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about Mondaq.com’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to unsubscribe@mondaq.com with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to webmaster@mondaq.com.

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to EditorialAdvisor@mondaq.com.

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at enquiries@mondaq.com.

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at problems@mondaq.com and we will use commercially reasonable efforts to determine and correct the problem promptly.