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CLOUD Act Renders Supreme Court Decision in the Microsoft Case Moot: eDiscovery News

The Supreme Court heard arguments on February 27th over Microsoft’s ongoing data privacy case involving email stored in Microsoft datacenter in Ireland.  Supposedly, according to reports from those attending, the justices didn’t seem swayed by Microsoft’s claims that data stored overseas should not be accessible to government prosecutors.  However, Congress has since passed the CLOUD (Clarifying Lawful Overseas Use of Data) Act. Parties on all sides of the case expected the passage of the CLOUD Act to render the Microsoft case moot.  And, they were right.

Yesterday, in an unsigned three-page opinion, the Supreme Court justices threw out a ruling by the U.S. Court of Appeals for the 2nd Circuit, explaining that the case had become moot.

On March 23, Congress passed – and President Donald Trump signed – legislation that directly addressed the legal issue before the court in the Microsoft case. The CLOUD Act contains a provision that requires email service providers to disclose emails within their “possession, custody, or control,” even when those emails are located outside the United States. Once the CLOUD Act was in effect, the federal government went back to court and got a new warrant, which has replaced the warrant originally served on Microsoft back in 2013.  According to ZDNet, Microsoft officials said they are reviewing the new DOJ warrant before deciding how to proceed.

Microsoft officials repeatedly have said they were in favor of legislation, not legal action, in settling these kinds of matters. Though it seems contradictory, Microsoft actually backed The CLOUD Act, which stipulates that cloud providers comply with court orders for data regardless of whether the information is located in the U.S. or not.

Microsoft released the following statement from its President and Chief Legal Officer Brad Smith yesterday regarding the Supreme Court’s move:

“We welcome the Supreme Court’s ruling ending our case in light of the CLOUD Act being signed into to law. Our goal has always been a new law and international agreements with strong privacy protections that govern how law enforcement gathers digital evidence across borders. As the governments of the UK and Australia have recognized, the CLOUD Act encourages these types of agreements, and we urge the US government to move quickly to negotiate them.”

In light of all these facts, the court concluded, there is no longer a “live dispute” between the United States and Microsoft on the legal question that the justices had agreed to review. The court therefore invalidated the 2nd Circuit’s ruling and sent the case back to the court of appeals with instructions to vacate the district court’s rulings against Microsoft and to direct the district court to dismiss the case.

So, what do you think?  Does the CLOUD Act end the disputes over data stored by internet providers overseas?  Please share any comments you might have or if you’d like to know more about a particular topic.

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