April 27, 2017 Practice Points

Do U.S. Courts Have Jurisdiction to Issue Warrants Against U.S. Companies for Data Stored Abroad?

Courts have recently split on the issue.

By Michael L. Huggins

The Stored Communications Act (SCA) enables federal law enforcement to obtain a warrant for “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.” 18 U.S.C. § 2703(a). More simply, federal officers may seek a warrant compelling Google or Microsoft, for example, to disclose emails associated with a particular email address if the officer can demonstrate probable cause that the emails will contain evidence of a crime.

As a general matter, a U.S. magistrate judge may issue a warrant authorizing a search outside of his or her assigned district. Fed. R. Crim. P. 41(b)(2)–(6). But Rule 41 is silent as to whether a federal court may issue a warrant for the search of property outside of the United States. And courts have recently split on the issue of whether, under the SCA, federal search warrants may require companies located in the United States to produce data stored outside of the United States.

The Second Circuit
In the Second Circuit case, In re Matter Warrant Search Certain E-mail (“In re Microsoft”), 829 F.3d 197 (2d Cir. 2016), a federal district court enforced a search warrant requiring Microsoft to produce email data stored in Ireland based on probable cause that an email account was used in furtherance of trafficking narcotics. Federal officers served the warrant on Microsoft at its headquarters in Redmond, Washington. Microsoft produced its customer’s non-content information that was stored in the United States, but moved to quash the warrant as it pertained to information stored in Ireland. Denying Microsoft’s motion to quash, the federal magistrate judge stated that the warrant was not extraterritorial because it merely compelled action by a company located in the United States.

The Second Circuit reversed the district court’s enforcement of the warrant, stating that Congress passed the SCA in 1986 with the aim of protecting user privacy as new technology developed. The court of appeals found that the SCA does not expressly or implicitly demonstrate any intention by Congress to give courts extraterritorial jurisdiction over data stored overseas, and thus, the district court lacked jurisdiction to enforce the search warrant on Microsoft for customer data stored in Ireland.

The court of appeals divided four-to-four on the government’s motion for rehearing en banc, thus denying the request. The four dissenters concluded that because Microsoft’s disclosure of emails to the government would have taken place at its headquarters in the United States, the search warrant was properly enforced regarding customer data stored in Ireland.

The Seventh Circuit
In the recent decision, In re Information Associated with One Yahoo Email Address that is Stored at Premises Controlled by Yahoo (“In re Yahoo”), Nos. 17-M-1234 & 17-M-1235 (E.D. Wis. Feb. 21, 2017), a Wisconsin federal district court issued a warrant requiring Yahoo to provide “all responsive information—including data stored outside the United States—pertaining to the identified [email] account that is in the possession, custody, or control of Yahoo.” Using the reasoning of the district court and Second Circuit en banc dissenters in In re Microsoft, the Wisconsin district-court in In re Yahoo found that requiring email-service providers to produce information stored abroad subject to a federal search warrant is not an exercise of extraterritorial jurisdiction if the service provider is located in the United States. There is no indication of whether Yahoo intends to challenge the In re Yahoo decision, and there is no indication of whether the Seventh Circuit would affirm or reverse the decision.

Lesson
In the event that a federal search warrant has been issued against your client that is located in the United States and stores electronic information outside of the United States, you should review the federal case law in your jurisdiction to determine whether your client must produce information stored outside of the United States to comply with the warrant. If the warrant is issued in the Second Circuit, for example, your client likely would not be required under the SCA to produce data stored outside of the United States. If the warrant is issued in the Seventh Circuit, however, your client may be required to produce data stored abroad.


Michael L. Huggins is deputy attorney general with the California Office of the Attorney General.


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