PRIVACY LAW - Warrants for Data Stored Abroad Do Not Constitute Unlawful Extraterritorial Applications of the Stored Communications Act - In re Search Warrant No. 16-960-M-l to Google; In re Search Warrant No. 16-1061-M to Google.

AuthorHoman, Madison
PositionCase note

PRIVACY LAW--Warrants for Data Stored Abroad Do Not Constitute Unlawful Extraterritorial Applications of the Stored Communications Act--In re Search Warrant No. 16-960-M-l to Google; In re Search Warrant No. 16-1061-M to Google, 275 F. Supp. 3d 605 (E.D. Pa. 2017), affg 232 F. Supp. 3d 708 (E.D. Pa. 2017).

The Stored Communications Act (SCA) authorizes the government to obtain warrants compelling internet service providers to disclose stored user data. (1) When the statute was enacted decades ago, however, Congress could not anticipate data in the cloud. (2) In In re Search Warrants to Google, Nos. 16-960-M-1 and 16-1061-M, (3) the District Court for the Eastern District of Pennsylvania addressed whether warrants requiring the production of foreign-stored data constitute unlawful extraterritorial applications of the SCA. (4) Affirming the Magistrate Judge's decision, the Court concluded the warrants constitute permissible domestic applications of the statute. (5)

In August 2016, two Magistrate Judges in the Eastern District of Pennsylvania issued SCA warrants to Google in two separate wire fraud investigations. (6) The company partially complied with the warrants by producing data it confirmed was stored on servers in the United States. (7) In withholding foreign-stored data, Google relied on the recent decision in In the Matter of a Warrant to Search a Certain E-Mail Account Controlled and Maintained by Microsoft Corp. (Microsoft), where the Second Circuit held the SCA does not authorize a warrant against a United States-based service provider for the contents of a user's electronic communications stored on overseas servers. (8) The government moved to compel, and the two matters involving Google were consolidated. (9) On February 3, 2017, Federal Magistrate Judge Thomas J. Rueter issued a Memorandum of Decision and Order, granting the government's motions to compel and concluding the search warrants issued to Google do not constitute extraterritorial applications of the SCA. (10)

In reaching this conclusion, Judge Rueter disagreed with the Second Circuit's extraterritoriality analysis in Microsoft, (11) He assumed, arguendo, the SCA's warrant provisions are intended to protect privacy, as the Second Circuit concluded, but he focused on where the invasions of privacy would take place. (12) He reasoned the electronic transfer of data from a server in a foreign country to Google's data center in California does not amount to a "seizure" under the Fourth Amendment because there is no "meaningful interference with the account holder's possessory interest in the user data." (13) Additionally, Judge Rueter reasoned the electronic data transfer does not amount to a "search" under the Fourth Amendment because "the actual infringement of privacy occurs at the time of disclosure in the United States." (14) In issuing the Order to Compel, Judge Rueter also addressed other considerations, including the risk to international comity. (15) Google objected to Judge Rueter's Order and sought review of his extraterritorial analysis in the district court. (16)

Analysis of extraterritoriality starts with the longstanding presumption against the extraterritorial application of United States statutes. (17) In several recent decisions, the Supreme Court of the United States has reaffirmed this presumption and applied it to several statutes. (18) The Court has established a two-part framework (the "Morrison/RJR Nabisco framework") to determine the geographical scope of federal statutes. (19) Under this framework, the first step is to see if a statute has a "clear indication of extraterritoriality" to rebut the presumption. (20) If a Statute does not clearly indicate congressional intent that it applies extraterritorially, the second step is to determine whether the particular case involves a domestic or extraterritorial application of the statute. (21) To make this determination, a court must examine the "focus" of the statute and then determine whether conduct relevant to the statute's focus occurred in the United States or in a foreign country. (22)

The Second Circuit applied the Morrison/RJR Nabisco framework in Microsoft to determine the geographical scope of the SCA. (23) Applying the first part of the framework, the Microsoft court found no indication in the statute that it applies abroad. (24) In the second part of the framework, the court concluded the focus of the statute is privacy and the actions relevant to privacy occurred in a foreign country. (25) Nevertheless, the Second Circuit held the warrant requiring the production of foreign-stored user data constituted an impermissible extraterritorial application of the SCA. (26) The Second Circuit is the only appellate court to consider the extraterritorial application of the SCA, but lower courts in other circuits have uniformly disagreed with the Second Circuit's extraterritorial analysis. (27) Similarly, the denial of rehearing in the Second Circuit generated four separate dissents by judges who agreed that requiring a domestic service provider to disclose information in the provider's possession, which the provider can access from the United States, constitutes a domestic application of the statute's warrant provision, regardless of where the provider has elected to store the information. (28)

In considering whether the SCA applies extraterritorially in cases involving data stored on foreign servers, judges have focused on the SCA's warrant provision. (29) Traditional search warrants have territorial limitations. (30) Judges have reasoned, however, that an SCA warrant is not a traditional search warrant. (31) Although it has the procedural protection of a traditional warrant--a judicial finding of probable cause--it functions like a subpoena, requiring the recipient to collect information and deliver it to the government. (32) Additionally, courts have analyzed cases involving emails in the context of traditional Fourth Amendment search and seizure cases. (33) Courts and commentators have also addressed the novel jurisdictional issues, finding that data stored in the cloud may be subject to multiple jurisdictions at the same time. (34)

In considering the government's request for data stored in the Cloud, the District Court in Google applied the extraterritoriality analysis set out by the Supreme Court. (35) In the first part of the Morrison/RJR Nabisco framework, the District Court concluded the SCA does not contain clear evidence of Congressional intent to rebut the presumption against extraterritoriality, because the statute does not indicate it should apply outside the United States. (36) In the second part of the framework, the Court analyzed [section] 2703, the statute's warrant provision. (37) The Court reasoned the "repeated emphasis on disclosure" throughout this section makes it clear "a provider's disclosure to the government is the conduct the statute seeks to regulate." (38) The Court further reasoned the conduct relevant to this statutory focus will occur in the United States, where Google is located, regardless of where Google chose to store the data. (39) In reaching this conclusion, the Court emphasized the document retrieval process would be handled remotely and controlled by United States-based employees at Google. (40)

In its extraterritoriality analysis, the Court also emphasized SCA warrants are different from traditional search warrants. (41) Unlike traditional search warrants, an SCA warrant is issued with respect to a person (the service provider) rather than a place (the data center). (42) An SCA warrant does not authorize law enforcement agents to search a provider's premises and seize evidence. (43) Instead, the warrant requires a service provider to disclose to law enforcement agents the contents of electronic communications the service provider possesses. (44) The Court reasoned an SCA warrant operates like a subpoena, and a court with personal jurisdiction over a party can enforce a subpoena for records the party possess or controls, no matter where the party may have stored the records. (45) The Court thus agreed with the Magistrate Judge's conclusion, which required Google to produce data stored on servers outside the United States. (46)

In reaching this conclusion, the Court interpreted the statute to avoid what the Magistrate Judge had described as an "unreasonable result" that would limit the government's ability to obtain data stored by Google outside the United States. (47) To determine whether the statute applies abroad the Court correctly applied the Supreme Court's two-step Morrison/RJR Nabisco framework. (48) The Court correctly concluded there was no clear indication of Congressional intent to apply the statute outside the United States. (49) However, to avoid an unreasonable result, the Court imagined the statute Congress might have enacted if it had contemplated cloud storage technology. (50) In short, the Court engaged in exactly the kind of speculation and "divining what Congress would have wanted" that the Supreme Court has prohibited in extraterritoriality law. (51) The Court interpreted the statute to allow the government to obtain data Google stores overseas. (52)

For example, the Court concluded the word "warrant" in the statute did not really mean "warrant." (53) To get around the territorial limitations of a warrant, the Court reasoned SCA warrants are "closely analogous" to subpoenas. (54) The Court further reasoned SCA warrants, like subpoenas, can reach records no matter where they are located "without raising extraterritoriality concerns." (55) A major problem in this line of reasoning, however, is that "warrant" is a term of art widely understood to have territorial limitations. (56) Congress deliberately used the word "warrant," and as the Supreme Court has explained, when Congress employs a term of art, Congress "presumably knows" the meaning of the term and its connotations. (57)

Because the...

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