In a landmark ruling, the United States Court of Appeals for the Second Circuit has ruled in favour of Microsoft, quashing the District Court's warrant seeking the disclosure of user content stored in Ireland.

The warrant directed Microsoft to seize and produce the contents of a customer's e-mail account on the basis that there were probable grounds for believing the account was being used for narcotics trafficking. Microsoft produced its customer's non-content information stored in the United States but refused to access customer content stored in Ireland and sought to have the warrant quashed.

The court focused on the "strong and binding" presumption against extra-territoriality of legislation. In order to rebut this presumption the statute under which the warrant was issued (the Stored Communications Act) would have to contain an "affirmative indication" of an intention to apply extra-territorially. The court determined that enforcement of the warrant constituted an unlawful extra-territorial application of the Act.

The Irish Government, which made submissions to the court as an amicus curiae, maintained the e-mails should only be disclosed upon a request being made to it by the US Government, pursuant to the Mutual Legal Assistance Treaty between the US and Ireland.

Interestingly, the court acknowledged that preventing such warrants from reaching data stored abroad could seriously impede law enforcement efforts in the US. However, it concluded that practical considerations could not overcome "the powerful clues in the text of the statute, its other aspects, legislative history and the use of the term of art 'warrant'", all of which led the court to conclude that such a warrant could only apply to data within US boundaries.

We await confirmation of whether the US Department of Justice will appeal the case to the Supreme Court.