The World in U.S. Courts: Summer and Fall 2016 - Stored Communications Act (SCA) | June.29.2016
The US Government obtained a warrant under the SCA that purported to require Microsoft to provide information, including information from a customer’s Email account maintained on a server in Ireland. Microsoft complied with the warrant as regards data stored in the US, but refused as to the customer Email content data stored in Ireland. The District Court required Microsoft to comply with the warrant in full, but the Court of Appeals disagreed. A majority of the three judge panel (one judge agreed with the result but offered a somewhat different rationale) began its analysis with the parties’ agreement that the SCA did not contemplate or permit extraterritorial application. Having concluded that the SCA does not have extraterritorial effect, the Court proceeded to determine whether a warrant served on a company in the United states should be considered an extraterritorial exercise of U.S. law if it seeks email content held abroad. To answer that question, the Court determined that the “focus” of the SCA warrant provisions is the protection of customers’ privacy interests in stored communications. Because the stored communications sought by the Government are in Ireland, the majority concluded that the warrant effected an impermissible extraterritorial application of the SCA. In so ruling, the majority distinguished warrants under the SCA seeking the email content of customers from subpoenas issued in federal cases, which routinely require the production of a company’s own records even if outside the US if within a proper defendant’s “custody or control.”
Having concluded that the SCA does not have extraterritorial effect, the Court proceeded to determine whether the warrant should nonetheless be considered appropriately domestic because it was served on a U.S. corporation in the U.S. To answer this question the Court determined that the “focus” of the FCA is the appropriate protection of customers’ privacy. Although the customer’s nationality and residence were not disclosed, the Court concluded that the relevant location for purposes of this inquiry was where the data would be accessed—in Ireland—and thus concluded that the warrant effected an impermissible extraterritorial application of the SCA.