In a striking ruling that benefits corporations located within the United States but which store information on servers overseas, the Second Circuit of the United States Court of Appeals held on July 14, 2016 that a warrant served by the United States Government upon the Microsoft Corporation under section 2703 of the Stored Communications Act of 1986 cannot compel American companies to produce data stored in servers outside of the United States. While Microsoft maintains customer account information on its US severs, it maintains an international server network to speed customer access all the world. In 2013, the US Government served a warrant upon Microsoft seeking emails on a particular Microsoft account customer. Microsoft moved to vacate the warrant and was unsuccessful in doing so in the United States District Court for the Southern District of New York.
Applying what it deemed to be “long-standing principle of American law”, the Court held that “Congressional action is meant to apply only within the territorial jurisdiction of the United States”.
This case is rather significant for our clients which deal with big data and which require the utilization of data storage and servers outside of the United States. With this new ruling, clients that contract to store such data outside the country may have a basis to further protect its data from not only government warrants, but also perhaps civil subpoenas and other such requests, especially if those subpoenas are received as a nonparty witness to litigation.
John L. Molinelli, Esq.
Contact John at jmolinelli@pricemeese.com should you have questions about this article.
