On August 17, 2017, a Pennsylvania district court upheld a magistrate judge’s order that Google comply with warrants issued pursuant to the Stored Communications Act (“SCA”) and produce to the FBI data that was stored, in part, on servers abroad. The decision, written by Judge Juan Sanchez of the Eastern District of Pennsylvania, departs from the Second Circuit’s landmark ruling in Microsoft1 by holding that it is the location of the service provider and where it will disclose data that is key to analyzing the extraterritorial reach of the SCA.
In a February decision, U.S. Magistrate Judge Thomas Rueter required that Google comply with SCA warrants and produce the emails of two targets of criminal investigations.2 Google contended that the emails were stored in “shards” across multiple locations both within the United States and abroad. In his decision, Magistrate Judge Rueter ruled that extraterritoriality issues were not implicated because the email account user’s privacy would not be invaded when Google accesses the data abroad or discloses it, but when law enforcement reviews the electronic data within the United States.
Judge Sanchez agreed with Judge Rueter’s ultimate conclusion that requiring Google to produce data stored outside the United States is a domestic application of the SCA. The court reasoned that the focus of the SCA is the circumstances in which the government can require a provider to disclose data, and that the conduct relevant to that focus takes place when the provider makes a disclosure to the government. The court found significant the fact that Google could retrieve and produce the data at issue only from its headquarters in California, where its Legal Investigations Support team is located. In other words, the court determined that the relevant conduct (retrieval and production) occurs within the United States.
The court’s interpretation differs markedly from that in Microsoft, the Second Circuit decision on which Google relied. There, the Court of Appeals determined that the SCA warrant provision was “protecting the privacy of the content of a user’s stored communications” and that the relevant conduct took place when a service provider accessed a customer’s protected content. The Google court acknowledged this decision, but held that – even were the focus of the SCA privacy protection – the relevant conduct remains the provider’s disclosure of data to the government.
While Microsoft was widely cheered, by tech companies in particular, at the time it was decided, it is significant that the Google court is but the latest – and likely not the last – to break with the Second Circuit. The Microsoft decision itself garnered four separate dissents at its rehearing en banc, and the Google court notes that the analysis in Microsoft has been rejected by every magistrate and district court judge that has considered the issue to date.3
For companies that either already store data on servers overseas or are considering doing so, the Google decision is instructive. Simply put, a company that can access data – wherever it may be housed – from the United States may be compelled to produce that data in the United States. Unfortunately, however, the Google court fails to acknowledge the challenges attendant with producing such data, especially where foreign data privacy regimes might be implicated. As companies make commercial decisions regarding data storage or data sharing with affiliates and partners abroad, it is more critical than ever to be able to identify where company data is stored and what privacy and disclosure requirements are at play.