Crowell & Moring

A federal judge in the Southern District of New York upheld a magistrate judge’s decision that requires Microsoft to turn over to federal prosecutor customer email content stored in an overseas Microsoft data center. Ruling from the bench, Chief Judge Loretta Preska concluded that Microsoft must comply with a U.S. search warrant for customer emails, even though the data was stored on a server overseas. As companies increasingly globalized and as the use of cloud-computing increases, the ruling in this case could have potentially huge consequences for U.S.-based companies storing data overseas.

C&M has previously analyzed Magistrate Judge Francis’ decision here. In short, In The Matter Of A Warrant To Search A Certain Email Account Controlled And Maintained By Microsoft Corporation, the court granted a search warrant under the 1986 Stored Communications Act (SCA) and ordered Microsoft to turn over email content of a customer. Microsoft moved to vacate the search warrant because the content was stored on a Microsoft data server in Ireland, and Judge Francis denied Microsoft’s motion. Microsoft appealed, but Judge Preska rejected Microsoft’s argument, and upheld Judge Francis’ decision.

While Judge Preska agreed to stay her decision pending Microsoft’s appeal, if the magistrate judge’s decision continues to be upheld, it could give the U.S. government expansive powers to obtain data outside the U.S. Not only would such a power raise serious privacy concerns over the access to user data, but it may conflict with the data-protection laws of foreign countries as well. Finally, as discussed here and here, this case demonstrates the need for Congressional reform of the 1986 Electronic Communications Privacy Act and Stored Communications Act, to address the growth and globalization of modern technology.