On February 27, 2018, the Supreme Court of the United States heard oral arguments on the Microsoft cloud computing case with relation to the Stored Communication Act. A ruling against Microsoft could require companies based in the United States to hand over data stored on foreign servers to U.S. law enforcement. Under these circumstances U.S. based organizations may be limited in what cloud computing services they can provide to foreign countries.
The law under dispute is Section 2703 of the Stored Communications Act of 1986 that predates the modern Internet. The federal government argues that Microsoft is simply being required to disclose records that it controls, even though they are stored in a foreign country. Microsoft argues that the Stored Communications Act only applies within the United States.
The justices focused on the legal issues including the problems an adverse decision might mean for Microsoft, Yahoo, Google, or Amazon in foreign countries. Nonetheless, there was no real attempt to understand the nature of cloud computing. Some of the justices had a great deal of difficulty understanding some of the basic technology involved in data storage. None of the justices voiced any concerns about privacy.
While it is very often difficult to decipher from the oral arguments how a Supreme Court justice would decide, oral arguments can reveal the issues that the justices consider important. Often, the Supreme Court tries to decide on the narrowest possible grounds, trying to avoid setting a precedent.
The decision would probably be issued in June.
The Oral Argument
The justices' statements are based on the questions they asked to Joshua Rosenkranz, the counsel for Microsoft, and Michael Dreeben, the United States Deputy Solicitor General.
Chief Justice John Roberts and Justice Samuel Alito were unsympathetic to Microsoft's argument. Justice Roberts was concerned that email providers could attract customers by promising to store their emails overseas where the United States government could not obtain them. He also stated that it was just a business decision by Microsoft to store the emails abroad. Justice Alito worried that even if the crime occurred in the United States the government would not be able to have access to emails stored overseas. He noted that using existing bilateral treaties can take months or years to get results.
Mr. Rosenkranz argued with this viewpoint saying that "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." He also argued that the emails were stored abroad because that gave customers superior performance when accessing their emails.
Justices Ruth Bader Ginsburg and Neil Gorsuch were more sympathetic. They argued that the actual disclosure of the emails has to occur overseas, and therefore this was not just a domestic issue.
Justices Ginsburg and Sonia Sotomayor noted that given the complex situation, it is the United States Congress that should resolve the issue with new legislation. Justice Sotomayor argued that the Stored Communications Act was designed to protect data stored in the United States. As such, the government is essentially asking the Supreme Court to imagine how Congress would deal with overseas data if it had considered the problem. She noted that an adverse ruling could create conflict with foreign laws.
Justices Elena Kagan and Anthony Kennedy seem unsatisfied with the harsh binary choice facing them. Justice Ginsburg stated that the court faced a binary choice between two undesirable outcomes: rule for Microsoft and jeopardize the government's ability to access information it needs, or rule for the government and create conflicts between U.S. and foreign laws as well as harm the ability of U.S. companies to compete globally.
This line of argument provoked a strong reply by the Deputy Solicitor General. He argued that the issue of international problems was a "mirage" created by Microsoft. No foreign government, he stated, had made such an assertion. He said that many foreign governments have complained of difficulties in getting U.S. data providers to enforce their laws. He argued that it was the job of the Supreme Court to decide the case, "rather than waiting for an uncertain legislative process."
Justice Stephen Breyer suggested a possible compromise. The federal government could get a warrant for data stored overseas, but companies could go to a judge to raise problems such as conflicts with foreign laws before the warrant was issued. Microsoft's counsel argued that this was not allowed by the current law, and it was the job of the Supreme Court to decide the case, rather than "innovating and adopting its own standard."
The CLOUD Act
Sen. Orrin Hatch (R., Utah), who attended the oral argument, recently proposed bipartisan legislation to update the law. This legislation, known as the CLOUD Act, would require law enforcement to obtain warrants for overseas data. Data providers would then have the ability to object to the issuance of the warrant. Microsoft, Google, Apple, Facebook are among the technology companies supporting this legislation.
This legislation also addresses the situation where foreign governments seek access to data stored in the United States. Currently, under the Stored Communications Act a U.S. company can only turn over data to a foreign country if the order comes from a domestic court. Under the proposed law, the United States could enter into a bilateral agreement with a foreign nation to allow U.S. companies to respond to legal orders from foreign governments or courts. These agreements would be subject to executive branch certification, and subject to congressional override. This process is designed to ascertain that these countries have the same basic privacy and human rights safeguards as the United States.
Civil Liberties and the CLOUD Act
Many civil liberties advocates do not supports the CLOUD Act. Twenty three organizations sent a letter to Congress opposing the legislation. They argue that the framework created by the bill fails to protect the rights of U.S. citizens and individuals abroad, and places too much authority in the hands of the Executive Branch of the United States government with few mechanisms to prevent abuse.
It is unknown when Congress will consider the CLOUD Act, and the Supreme Court could issue its decision in May or June.