Supreme Court Oral Argument on Microsoft Case Touches on Cloud Act

In oral argument in the “Microsoft Ireland” Supreme Court case Tuesday (see 1710160009), Justices Ruth Bader Ginsburg and Sonia Sotomayor asked whether the high court should defer to Congress for a legislative solution on police access to data stored abroad. Ginsburg called the environment of U.S. v. Microsoft a “brave new world.” Citing the 1986 Stored Communications Act, Microsoft challenged a U.S. government warrant demanding emails stored in Ireland as part of a drug trafficking investigation. The high court granted the government’s application to review a 2nd U.S. Circuit Court of Appeals decision that said Microsoft didn't have to comply with a probable-cause warrant for the customer's emails in Ireland because U.S. law doesn't apply abroad.

Industry groups like the Information Technology and Innovation Foundation urged Congress to approve (see 1802260062) the Clarifying Lawful Overseas Use of Data (Cloud) Act (see 1802140062). The bill’s author, Sen. Orrin Hatch, R-Utah, who attended oral argument, said he wasn't surprised the court repeatedly touched on Congress’ need to act. He said his legislation would balance interests of consumers, law enforcement and privacy advocates. “This common sense legislation has the full-throated support of both law enforcement and the tech community and deserves swift enactment,” he said.

Microsoft attorney Joshua Rosenkranz said a ruling against the company could threaten the market for digital cloud storage. He said data storage abroad is a newer practice at Microsoft, which began in 2010, warning against U.S. government “reaching into foreign land” using domestic law. Michael Dreeben of the solicitor general's office argued against the precedent Microsoft is trying to establish, saying the company is making the case that if data is stored overseas, the material is so outside U.S. law enforcement jurisdiction that police can't even request a warrant from a judge.

TechNet CEO Linda Moore also Tuesday urged Congress to pass the Cloud Act, calling it the best solution. “Neither policymakers nor our laws have kept up with the transformative innovations that have reshaped the way we communicate and the global nature of digital trade” since the Stored Communications Act, she said.

BSA Vice President-Global Policy Aaron Cooper said in an interview Tuesday it was apparent the justices were struggling with how to apply 1980s law to a tech issue. Sotomayor said the landscape for technology has drastically changed since 1986. Cooper noted the bipartisan support for the Cloud Act, and that Microsoft and DOJ back passage. The question now is how quickly Congress acts, and whether the case will be rendered moot, he said.

Justice Anthony Kennedy asked whether companies have the ability to separate the data into “shards,” allowing storage in multiple countries. If foreign law were a barrier to the U.S. government gaining access to data, that could cause major delays in criminal investigations because multiple cases in many countries could take years.

Rosenkranz said Microsoft doesn't divide the data and store it in separate locations, and neither does Google for Gmail. If that were the case, though, Rosenkranz said, the U.S. could rely on mutual legal assistance treaties. He said if the issue is urgent, foreign governments will respond quickly based on the agreements.

Rosenkranz argued against government compelling Microsoft to “fetch data” stored in foreign countries, describing the physical infrastructure required to store the data. He said allowing the government to seize data overseas would be tapping into physical equipment on foreign soil, which raises extraterritorial issues. After questioning from Sotomayor, he conceded Microsoft or law enforcement, if given access, could obtain the data remotely from the U.S.

Rosenkranz claimed law enforcement intervention could damage Microsoft’s email service. If customers don’t want their information seized, they should be able to trust Microsoft to keep it away from the U.S. government, if the law allows, he said. He said DOJ is attempting to secure “extraordinary power” that Congress didn't envision delegating in 1986. It’s the court’s job to defer to Congress on this issue, he said.