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Robots, Latency, Cloud and Old Law: Microsoft's Day at the Supreme Court

In a lively one-hour discussion ranging from privacy rights to latency issues to robots conducting overseas seizures, U.S. Supreme Court justices sparred with lawyers from Microsoft and the U.S. government in oral arguments on Tuesday.

At issue: whether a U.S. court can order a U.S.-based e-mail service provider to comply with a probable-cause-based warrant issued under the 1986 Stored Communications Act (SCA) by disclosing e-mails that the provider has stored abroad.

State of play leading up to the Supreme Court has Microsoft ahead and playing defense. The case started with a Drug Enforcement Agency investigation in 2013. Federal agents persuaded a magistrate judge in the Southern District of New York to issue a warrant for a suspect's e-mails. Microsoft fought the order on the grounds that the e-mails were stored at its datacenter in Ireland. A U.S. District Court rejected Microsoft's appeal, but the U.S. Court of Appeals for the 2nd District ruled in Microsoft's favor.

Discussion on Tuesday settled over and over on a few key topics: the many ways that the outdated SCA is woefully inadequate for the cloud era; whether the court should simply wait for pending congressional legislation to make the questions in the case moot; justices seeking clarification on what exactly happens in the United States and abroad when Microsoft or other service providers produce an e-mail record; domestic versus extraterritorial jurisdiction questions; and back-and-forth about the legal differences between warrants, subpoenas, orders, searches and disclosures.

What Microsoft wants is for the Supreme Court to leave the issue alone and to hope that Congress passes the CLOUD Act, introduced recently with bipartisan and tech industry support.

"There were conversations about where the Internet is headed," Microsoft lawyer E. Joshua Rosenkranz said Tuesday in his closing statement. "There [are] conversations about whether this will kill the tech sector, how much of an international consensus there is about the sovereignty of data. These are all questions that only Congress can answer. Meanwhile, this Court's job is to defer, to defer to Congress to take the path that is least likely to create international tensions. And if you try to tinker with this, without the tools that -- that only Congress has, you are as likely to break the cloud as you are to fix it." (Ed.'s note: All quotations in this article are taken from the 72-page official transcript posted on the Supreme Court's Web site.)

Arguing for the government, Michael R. Dreeben, deputy solicitor general for the U.S. Department of Justice, countered that the court should move before Congress to fix an unsettled legal environment.

Calling Microsoft's position "radical," Dreeben described the current situation as one where no U.S. court gets to try to balance U.S. law with other countries' relevant laws. "If the data is stored overseas, we're just out of luck. We can't even ask a court for an order that would require its production," Dreeben said.

"No other court that has issued a written opinion since Microsoft has agreed with the Second Circuit. And the Second Circuit's decision has caused grave and immediate harm to the government's ability to
enforce federal criminal law," Dreeben argued.

He also urged the court not to wait for the CLOUD Act: "But as to the question about the CLOUD Act, as it's called, it has been introduced. It's not been marked up by any committee. It has not been voted on by any committee. And it certainly has not yet been enacted into law."

Predicting how justices will decide from the questions they ask in oral arguments is tricky, but there were some hints. Running through the justices in rough order from the liberal to the conservative end of the spectrum:

Justice Sonia Sotomayor asked Dreeben outright why the court shouldn't wait for Congress. "Why shouldn't we leave the status quo as it is and let Congress pass a bill in this new age?" Sotomayor also participated with several of the justices in lengthy exchanges to understand better how Microsoft would technically go about complying with an order to produce e-mails from a U.S. office that are stored in a datacenter in Ireland. At one point, Rosenkranz described the process as similar to dispatching a robot, saying, "If you sent a robot into a foreign land to seize evidence, it would certainly implicate foreign interests." Shortly after that description, Sotomayor joked, "I'm sorry...I guess my imagination is running wild."

Justice Ruth Bader Ginsburg offered similar thoughts on leaving action to Congress: "[In] 1986, no one ever heard of clouds. This kind of storage didn't exist. ... Wouldn't it be wiser just to say let's leave things as they are; if -- if Congress wants to regulate in this brave new world, it should do it?"

Justice Elena Kagan's questions were relatively technical, covering issues around whether judges could weigh other countries' laws in deciding on challenges to warrants, and discussing legislators' intent for specific provisions of the SCA.

Justice Stephen Breyer sought a short-circuit for the whole issue in trying to pin down whether Magistrate Court judges had authority to issue warrants for searches outside their geographic districts -- in this case, New York. "I suspect [that] it just can't be that easy, this case," Breyer said during a light moment in the arguments. Breyer also asked about the feasibility of a middle path involving reading the old statute to adapt to the current cloud environment.

Justice Anthony Kennedy wondered why the discussion about location wasn't broader. "Why should we have a binary choice between a focus on the location of the data and the location of the disclosure? Aren't there some other factors, where the owner of the e-mail lives or where the service provider has its headquarters?"

Justice Samuel Alito came down pretty heavily on the side of action -- the government's preferred position. "It would be good if Congress enacted legislation that modernized this, but in the interim, something has to be done," Alito said. Meanwhile, another question Alito asked established definitively that the nationality of the suspect in the case was not known, which may influence Kennedy's thinking based on his questions about locations. Alito also pressed Microsoft's Rosenkranz about what would happen in a case involving American citizens being investigated for crimes committed in the United States if their service providers store their e-mails outside the country.

Chief Justice John Roberts expressed deep reservations about service providers intentionally using the current legal standard to assist customers in avoiding U.S. investigators.

"There is nothing under your position that prevents Microsoft from storing United States communications, every one of them, either in Canada or Mexico or anywhere else, and then telling their customers: Don't worry if the government wants to get access to your communications; they won't be able to, unless they go through this MLAT [Mutual Legal Assistance Treaties] procedure, which is costly and time-consuming," he said. "Could you provide that service to your customers?"

In a give-and-take discussion, Rosenkranz assured Roberts that Microsoft's motives solely involved customer demands for minimizing latency, which he positioned as the sole reason for Microsoft's investment in half-billion-dollar datacenters all around the world. Roberts did not sound convinced, "Well, but you might gain customers if you can assure them, no matter what happens, the government won't be able to get access to their e-mails."

Justice Neil Gorsuch also seemed to stick to technical questions on subjects like the chain of activity in complying with a court order and the differences between subpoenas and warrants. At one point, Justice Breyer seemed to indicate to Dreeben that Gorsuch and others were "with you on this" but it was unclear exactly what Breyer was talking about.

Justice Clarence Thomas provided no clues as to his thinking during the oral arguments. He upheld his standard practice of asking no questions.

So the quick scorecard from this close read of the transcript is Sotomayor and Ginsburg leaning toward waiting for Congress, Alito and Roberts inclined to act, and the other five justices on the fence. Stay tuned for the decision in June.

Posted by Scott Bekker on 02/28/2018 at 7:01 AM


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