Microsoft Ireland: Extraterritoriality Step Zero

United States v. Microsoft is a fascinating case because it appears at the cross-roads of so many different areas of the law—the Fourth Amendment, criminal law, data privacy, cyberlaw, foreign relations law, international law, statutory interpretation, extraterritoriality—and thus implicates so many different, sometimes conflicting values.  The scores of amicus briefs filed in this case flesh out these values, which include furthering criminal investigations, protecting privacy, respecting foreign sovereignty, preserving international comity, abiding by international law, and more.

By now, this case is well-known to many Just Security readers. In 2013, the U.S. government applied for and received a warrant directing Microsoft to seize and produce the contents of a customer’s e‐mail account.  The warrant was served on Microsoft at its headquarters in Washington State.  Microsoft provided the requested data that it had stored in the United States, but not the customer content that it stores and maintains in Ireland, because, according to Microsoft, the warrant did not extend to that content.

I cannot claim expertise in all the areas of law implicated in this case, but having studied extraterritoriality for the past decade, I will submit that the presumption against extraterritoriality as it has evolved in that time is ill-equipped balance all of the competing interests at stake.  Moreover, in its heightened formalism, the presumption has lost all semblance of objectivity.  Whether the court deems a statute to apply “domestically” or “extraterritorially” has proven too manipulable and does not even purport to take into account all, or even some, of the values competing for attention in this case in any transparent way.

According to the Second Circuit, Microsoft and the government dispute “the nature and reach of the warrant.” Microsoft argues that the term “warrant” in section 2703 of the Stored Communications Act (SCA) 18 U.S.C. §§ 2701 et seq., has territorial limitations, and thus that a warrant could not authorize seizure of items located outside the United States.  The United States contends that this case involves a domestic application of the SCA, and that a section 2703 warrant asserts its authority over the person or entity served (here, Microsoft in Washington), no matter where that entity stores data.

At their core, the parties’ arguments concern whether the presumption against extraterritoriality should do any work in this case at all. Just read the parties’ statements of the question presented.  Microsoft says that the question is about the presumption against extraterritoriality. (“Whether invoking the SCA’s law-enforcement exception to demand the importation of private electronic communications stored in a foreign country is an impermissible extraterritorial application of the Act.”).  The United States says the question is about whether a section 2703 warrant requires disclosure of all electronic communications within Microsoft’s control. (“Whether a United States provider of email services must comply with a probable-cause-based warrant issued under 18 U.S.C. 2703 by making disclosure in the United States of electronic communications within that provider’s control, even if the provider has decided to store that material abroad.”).

Microsoft won below because it won the “framing” contest.  Judge Lynch, who signed on to the Second Circuit’s decision because of the stringent application that recent extraterritoriality decisions now require, makes clear both that the framing contest was the whole ballgame, and that that contest fails to consider the competing values in this case.

Of course many legal questions are won and lost by framing, but the modern extraterritoriality presumption developed in Morrison, Kiobel, and RJR Nabisco is especially easily prone to such manipulation.  None of these cases does a good job articulating when the presumption against extraterritoriality should do its work—i.e., when a statute should be considered to apply extraterritorially as opposed to domestically.  Morrison recognizes that this is always the threshold question, but demotes it to an afterthought, dismissing the concern with some fancy turns of phrase—(“[T]he presumption against extraterritorial application would be a craven watchdog indeed if it retreated to its kennel whenever some domestic activity is involved in the case.”)—and telling courts to determine the singular “focus” of the statute (without explaining what that means, and apparently assuming there can be only one).  Kiobel invents the “touch and concern” test to determine whether the ATS applies domestically and thus circumvents the presumption; but that test doesn’t seem to apply to any other statute or to have any known history. RJR Nabisco solidifies the presumption’s dominance by putting this threshold question second, and stating that the presumption applies to all kinds of statutes (jurisdictional, procedural, remedial, etc.), but leaves open the question of whether any domestic conduct is necessary to find a domestic application of a statute (as Bill Dodge explains here).

The danger is that a behind-the-scenes balancing of the competing values at stake here will inform how the Court defines the SCA’s “focus.” If the Court decides that the United States should have the authority to require Microsoft to hand over this data, then the opinion can easily assert that the Government is simply seeking a domestic application of the SCA, even though recent precedents seem to require a stricter reading of the presumption against extraterritoriality.  This weighing of values is important and probably unavoidable—but it can hide behind the Morrison “focus” inquiry.  That inquiry pays insufficient attention to the externalities that a decision in this case—in either direction—is likely to have.  In Morrison, Justice Scalia bemoaned the uncertainty of the conduct and effects test that the Second Circuit had been applying to the Securities Exchange Act for decades.  That test had its own problems—it could be indeterminate and unpredictable—but at least the parties knew what they were arguing about: the impact of the alleged conduct on the United States.  Morrison purports to replace old extraterritoriality analysis with new and improved clarity, but it has shifted the uncertainty to the determination of whether a statute applies domestically or extraterritorially. That’s a determination which, I would think, should come before we engage in applying the strict presumption in the first place.

Judge Lynch asks Congress to revise the SCA. It should. Maybe the proposed CLOUD Act will moot the case. If Congress doesn’t step in, I would also ask the Court (probably futilely) to fix the overbreadth and manipulability of the modern presumption against extraterritoriality. Deciding, as the Court might, that there is no extraterritorial application in this case, is unlikely to do so.

(Stephen Brashear/Getty Images)

 

About the Author(s)

Pamela Bookman

Assistant Professor of Law at Temple Law School, Follow her on Twitter (@pamelabookman)