The United States Department of Justice (“DOJ”) has taken the first step in seeking to overturn the U.S. Court of Appeals for the Second Circuit’s landmark Microsoft opinion by requesting that the Second Circuit reconsider its ruling that domestic companies are not required to turn over data stored in foreign jurisdictions in response to warrants issued under the Stored Communications Act (“SCA”), 18 U.S.C. §§2701 et seq.

Microsoft v. United States, No. 14-2985 (S.D.N.Y. Aug. 11, 2014), began when Microsoft moved to quash a search and seizure warrant issued for user data located on foreign servers. The magistrate judge denied the motion to quash and later held Microsoft in contempt for failing to comply with the warrant. (To learn more about this decision, please see our July 19, 2016 alert here.)

Microsoft prevailed in its appeal to the Second Circuit. The appeals court vacated both the court’s denial of the motion to quash and finding of civil contempt. Microsoft v. United States, 829 F.3d 197 (2d Cir. 2016). In holding that the SCA did not extend the reach of warrants into extraterritorial jurisdictions, the Second Circuit relied upon the plain meaning of the statute, Congress’s aim of protecting privacy, and the presumption against extending domestic laws extraterritorially absent clear Congressional intent. Id. at 221.

The Second Circuit emphasized that subpoenas and warrants are not functional equivalents, but “distinct legal instruments” under which warrants provide the recipient with greater legal protections. Id. at 214. While warrants “protect[] privacy in a distinctly territorial way,” subpoenas may reach items under the recipient’s control, even if the items are located outside the jurisdiction. Id at 213-214. The Court held that under the SCA, “warrants” must be understood in the traditional sense, and regardless of Microsoft’s ability to retrieve the information stored on foreign servers, Microsoft could not be compelled by warrant to retrieve data located abroad. Id.

The DOJ’s recent Petition for Rehearing signals that federal law enforcement is not ready to accept what it characterizes in its filing as an “unprecedented” decision. The DOJ contends that the Second Circuit improperly relied upon both the title of the Act and sections of the Act inapplicable to warrants in its holding. In its Petition for Rehearing, the DOJ warned that Microsoft diminishes “an essential investigative tool,” has already “harm[ed] important criminal investigations around the country,” and has “caus[ed] confusion and chaos among providers as they struggle to comply.” The Petition further argues that the Second Circuit’s decision places “critical evidence of crimes …entirely outside the reach of any law enforcement anywhere in the world.”

The DOJ describes Microsoft as severely undermining essential investigative tools, and suggests that if the Second Circuit fails to reverse course, a writ of certiorari to the United States Supreme Court will follow. Likewise, privacy advocates will press for a narrow interpretation of the SCA’s territorial reach, while domestic businesses with data stored internationally will continue to seek clear and consistent rules on the geographic scope of warrants issued under the SCA.