On January 24, 2017, the U.S. Court of Appeals for the Second Circuit denied the Department of Justice’s request for an en banc rehearing in In the Matter of a Warrant to Search a Certain Email Account Controlled and Maintained by Microsoft Corp. a/k/a Microsoft Corp. v. United States (No. 14-2985). The denial leaves in place a controversial decision by a three judge panel that quashed a warrant obtained by the DOJ under the Stored Communications Act (SCA) seeking the contents of a Microsoft customer’s emails. The majority panel unanimously held on July 14, 2016 that the DOJ’s attempt to procure the contents of the emails via an SCA warrant constituted an impermissible extraterritorial application of the SCA because the server on which the emails were stored is located in Ireland.
Four judges separately dissented from the rehearing denial. Judge Cabranes argued in part that the majority erred in its conclusion regarding the extraterritorial application of the SCA because Microsoft is an American corporation, and the conduct that is the subject of the warrant – Microsoft’s disclosure of the contents of the email account to a third party (the DOJ) – would necessarily take place in the United States. Judge Cabranes explained that the panel improperly found that the focus of the SCA turned on the location of the email server in Ireland, when the dispositive factor is that Microsoft’s compelled disclosure would occur in the United States. Judge Droney’s dissent acknowledged the difficulty in applying a statute passed in 1986 (the SCA) to present technology – a theme echoed among the dissenters and in the underlying opinion – but similarly concluded that the presumption against extraterritoriality should not apply here because the conduct compelled by the SCA warrant would occur in the United States.
In support of the panel’s majority opinion, and the denial of a rehearing en banc, Judge Carney – the author of the panel’s decision – issued a concurrence that reiterated the panel’s deference to the Supreme Court’s “strong presumption against extraterritoriality.” Judge Carney’s concurrence also highlighted the potential slippery slope underpinning the logic of the dissenter’s position concerning the location of the disclosure as dispositive, suggesting that it could open the door for an SCA warrant to obtain content stored in Ireland in an account established in Ireland by an Irish citizen in violation of Irish law merely because the service provider has a branch office in the United States with access to the account.
This denial of the DOJ’s request for a rehearing en banc now opens the door for the DOJ to petition the Supreme Court for review, although it remains to be seen how the new administration will approach the case.