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Supreme Court To Hear Case On Accessing Data Stored Abroad

The Supreme Court has agreed to decide whether technology firms with U.S. operations have to retrieve electronic information stored abroad if American authorities demand it under U.S. law.

In an order Monday, the justices accepted the Justice Department’s request to review a 2nd Circuit U.S. Court of Appeals decision from last year that found Microsoft was not obliged to provide data stored in Ireland to comply with an American warrant.

Law enforcement officials say they need the ability to compel U.S.-based firms to comply with subpoenas and search warrants, but the companies argue that giving American investigators the right to do that will lead to foreign governments demanding data stored on U.S. soil.

The New York-based appeals court’s decision remains the only circuit court decision addressing the issue, but several subsequent events have demonstrated that many judges have doubts about rationale of the 2-1 decision a three-judge panel handed down last July.

In January, the court announced that its judges split, 4-4, on a request for the full bench of the court to rehear the case. Three judges recused.

Meanwhile, federal district court judges in Philadelphia, San Francisco and Washington have reached the opposite conclusion of the 2nd Circuit panel, which is binding only in New York, Connecticut and Vermont.

The case does not address any constitutional question about the ultimate power of the U.S. government, but rather the application and reach of a three-decade-old law, the Stored Communications Act. In the 2nd Circuit, Microsoft argued that asking it to turn over data stored overseas amounted to an extraterritorial application of the law, something the courts generally decline unless Congress has made clear that a law should apply abroad.

In a blog post responding to the Supreme Court’s action Monday, Microsoft President and Chief Legal Officer Brad Smith said Congress needs to weigh in.

“The continued reliance on a law passed in 1986 will neither keep people safe nor protect people’s rights. If U.S. law enforcement can obtain the emails of foreigners stored outside the United States, what’s to stop the government of another country from getting your emails even though they are located in the United States?” Smith wrote. “The current laws were written for the era of the floppy disk, not the world of the cloud. We believe that rather than arguing over an old law in court, it is time for Congress to act by passing new legislation.”

However, in its request for Supreme Court review, the Justice Department said the consequences of leaving the 2nd Circuit ruling in place would be severe.

“The decision is causing immediate, grave, and ongoing harm to public safety, national security, and the enforcement of our laws,” government lawyers wrote. They also warned that allowing the ruling to stand could encourage companies to store their data abroad in the first place so that they would not have to abide by U.S. legal process.

The overseas-data dispute the justices agreed to wade into is one of several that pit U.S.-based technology companies trying to cater to a global market against American law enforcement officials, who contend the companies are complicating the work of U.S. law enforcement.

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