Last week, in In re Warrant to Search a Certain E-mail Account Controlled and Maintained by Microsoft Corp., a federal judge lifted the stay of execution of an order requiring Microsoft to turn over content stored on a Microsoft server located in Ireland.  While this development is largely procedural, we have previously discussed the potential consequences of this case on U.S.-based companies storing data overseas here and here.

Ruling from the bench, Chief Judge Loretta Preska upheld the decision of Magistrate Judge James C. Francis, requiring Microsoft to turn over the data stored on Microsoft’s server in Ireland in response to a warrant issued under the Stored Communications Act.  At the same time the Court upheld the warrant, the Court granted Microsoft’s motion for a stay of execution of the warrant, pending review of the decision by the Court of Appeals.  The government later moved to lift the stay of execution, arguing that the Chief Judge’s ruling is not a final, appealable order.  Last week the Court agreed, and lifted the stay. 

If Microsoft refuses to comply with the warrant, the Court could hold Microsoft in contempt, which would be a final order subject to appellate review.  However, even though the stay is now lifted, Judge Preska noted in her decision, “[b]oth parties share the common goal of permitting the Court of Appeals to hear this case as soon as possible.  Their disagreement concerns the correct path to that goal.”  The Court also noted that “[t]he Government appears to be willing to stay enforcement of a contempt finding pending appellate review.” 

The government and Microsoft have until September 5th to inform the court by joint letter how they propose to proceed.