Court ruling stands: US has no right to seize data from world’s servers

Outcome means hot-button privacy topic could reach US Supreme Court.

David Kravets – Jan 24, 2017 6:45 pm | 96

Satya Nadella, CEO of Microsoft, speaks at the Microsoft Annual Shareholders Meeting in Bellevue, Washington, on November 30, 2016. Credit: Jason Redmond / Getty Images

An evenly split federal appeals court ruled Tuesday that it won’t revisit its July decision that allowed Microsoft to squash a US court warrant for e-mail stored on its servers in Dublin, Ireland. The 4-4 vote by the 2nd US Circuit Court of Appeals sets the stage for a potential Supreme Court showdown over the US government’s demands that it be able to reach into the world’s servers with the assistance of the tech sector.

A three-judge panel of the 2nd Circuit had ruled that federal law, notably the Stored Communications Act, allows US authorities to seize content on US-based servers, but not on overseas servers. Because of how the federal appellate process works, the Justice Department asked the New York-based appeals court to revisit the case with a larger en banc panel—but the outcome fell one judge short.

Justice Department spokesman Peter Carr said the agency was reviewing the decision and “considering our options.” Those options include appealing to the Supreme Court or abiding by the ruling.

In its petition for a rehearing, the government said Microsoft didn’t have the legal right to defend the privacy of its e-mail customers, and that the July ruling isn’t good for national security. The authorities believe information in the e-mail could help it investigate a narcotics case.

“The Opinion has created a regime where electronic communication service providers—private, for-profit businesses answerable only to their shareholders—can thwart legitimate and important criminal and national security investigations, while providing no offsetting, principled privacy protections,” the government argued.

Some of the members of the appeals court agreed with the government, but there weren’t enough votes from the full court to rehear the case with all of its judges.

In his vote to rehear the case, Judge Dennis Jacobs noted in his dissent that it doesn’t matter where the data is stored, as Microsoft can retrieve it to honor the US-based warrant.

“But electronic data are not stored on disks in the way that books are stored on shelves or files in cabinets,” he wrote, in a dissent joined by three other judges.

Dozens of organizations and companies have lodged briefs in the case on behalf of Microsoft. They include the US Chamber of Commerce, Amazon, Apple, Cisco, CNN, Fox News Network, Gannett, and Verizon.

Microsoft did not immediately comment on the ruling. But right after the July ruling, Microsoft’s president and chief legal officer said the outcome “provides a major victory for the protection of people’s privacy rights under their own laws rather than the reach of foreign governments. It makes clear that the US Congress did not give the US government the authority to use search warrants unilaterally to reach beyond US borders.”