
Robert E. Levy
Partner
201-896-7163 rlevy@sh-law.comFirm Insights
Author: Robert E. Levy
Date: August 8, 2014
Partner
201-896-7163 rlevy@sh-law.comThe New York data privacy case could dramatically impact U.S. businesses as well the ability of U.S. law enforcement to obtain digital information stored overseas, all because of this case regarding the Microsoft Corporation.
On December 4, 2013, federal prosecutors obtained a search warrant to obtain information associated with a specified web-based e-mail account that is “stored at premises owned, maintained, controlled, or operated by Microsoft Corporation, a company headquartered at One Microsoft Way, Redmond, WA.” The warrant was issued under the Stored Communications Act (SCA).
The Microsoft Corporation complied with the search warrant to the extent of producing the non-content information stored on servers in the United States. However, after it determined that the target account was hosted in Dublin and the content information stored there, it sought to quash the warrant to the extent that it directs the production of information stored abroad. The motion argued that federal courts are not authorized to issue warrants for the search and seizure of property outside the territorial limits of the United States. Rather, they must rely on the Mutual Legal Assistance Treaty (MLAT) process.
The SCA is part of the Electronic Communications Privacy Act of 1986. The statute authorizes law enforcement agents to obtain information from Internet service providers (ISPs) through subpoenas, court orders, or warrants. Each legal process allows the government to obtain a specific level of data.
A warrant entitles the government to the most information, including basic customer information, opened emails, records or other information pertaining to a subscriber or customer, and unopened e-mails stored by the provider for less than 180 days. In order to obtain an SCA Warrant, the government must demonstrate probable cause. The relevant section of the statute provides in pertinent part:
A governmental entity may require the disclosure by a provider of electronic communication service of the contents of a wire or electronic communication, that is in electronic storage in an electronic communications system for one hundred and eighty days or less, only pursuant to a warrant issued using the procedures described in the Federal Rules of Criminal Procedure . . . by a court of competent jurisdiction.
In April, U.S. Magistrate Judge James C. Francis IV denied Microsoft’s motion to quash the warrant. “Even when applied to information that is stored in servers abroad, an SCA Warrant does not violate the presumption against extraterritorial application of American law,” he ruled.
In his decision, Judge Francis noted that SCA Warrants are “hybrid: part search warrant and part subpoena.” As he further explained, “The ‘warrant’ requirement of section 2703(a) cabins the power of the government by requiring a showing of probable cause not required for a subpoena, but it does not alter the basic principle that an entity lawfully obligated to produce information must do so regardless of the location of that information.”
Judge Francis also concluded that SCA Warrants do not require the same protections from government overreach, particularly because it is the service provider who conducts the search. The court also highlighted that it is difficult to believe that Congress intended to limit the reach of SCA Warrants to data stored in the United States.
Most recently, U.S. District Judge Loretta Preska upheld the decision, although her ruling will be stayed in order to give Microsoft the opportunity to appeal. “Congress intended in this statute for ISPs to produce information under their control, albeit stored abroad, to law enforcement in the United States,” Preska stated. “As Judge Francis found, it is a question of control, not a question of the location of that information.”
The court’s interpretation of the SCA will not only impact email providers, but also cloud-based service providers, which also frequently store data abroad. If the decision stands, these businesses could be forced to produce data to law enforcement regardless of where in the world it resides. We will be closely monitoring this case throughout the appeals process, and we encourage you to check back for updates.
Do you have any legal insights or thoughts on this case regarding the Microsoft Corporation. If so, feel free to leave a comment below.
No Aspect of the advertisement has been approved by the Supreme Court. Results may vary depending on your particular facts and legal circumstances.
Special purpose acquisition companies (better known as SPACs) appear to be making a comeback. SPAC offerings for 2025 have already nearly surpassed last year’s totals, with additional transactions in the pipeline. SPACs last experienced a boom between 2020–2021, with approximately 600 U.S. companies raising a record $163 billion in 2021. Notable companies that went public […]
Author: Dan Brecher
Merging two companies is a complex legal and business transaction. A short form merger, in which an acquiring company merges with a subsidiary corporation, offers a more streamlined process that involves important corporate governance considerations. A short form merger, in which an acquiring company merges with a subsidiary corporation, offers a more streamlined process. However, […]
Author: Dan Brecher
The Trump Administration’s new tariffs are having an oversized impact on small businesses, which already tend to operate on razor thin margins. Many businesses have been forced to raise prices, find new suppliers, lay off staff, and delay growth plans. For businesses facing even more dire financial circumstances, there are additional tariff response options, including […]
Author: Brian D. Spector
Business partnerships, much like marriages, function exceptionally well when partners are aligned but can become challenging when disagreements arise. Partnership disputes often stem from conflicts over business strategy, financial management, and unclear role definitions among partners. Understanding Business Partnership Conflicts Partnership conflicts place significant stress on businesses, making proactive measures essential. Partnerships should establish detailed […]
Author: Christopher D. Warren
*** The original article was featured on Bloomberg Tax, April 28, 2025 — As a tax attorney who spends much of my time helping people and companies who have large, unresolved issues with the IRS or one or more state tax departments, it often occurs to me that the best service that I can provide […]
Author: Scott H. Novak
On January 28, 2025, the Trump Administration terminated Gwynne Wilcox from her position as a Member of the National Labor Relations Board (NLRB or the Board). Gwynne Wilcox, a union side lawyer for Levy Ratner, was confirmed to the Board for an original term in 2021 and confirmed again for a successive five-year term expiring […]
Author: Matthew F. Mimnaugh
No Aspect of the advertisement has been approved by the Supreme Court. Results may vary depending on your particular facts and legal circumstances.
Consider subscribing to our Firm Insights mailing list by clicking the button below so you can keep up to date with the firm`s latest articles covering various legal topics.
Stay informed and inspired with the latest updates, insights, and events from Scarinci Hollenbeck. Our resource library provides valuable content across a range of categories to keep you connected and ahead of the curve.
Let`s get in touch!
Sign up to get the latest from the Scarinci Hollenbeck, LLC attorneys!