Cross-Border Data

Analysis of Microsoft-Ireland Supreme Court Oral Argument

By Andrew Keane Woods
Tuesday, February 27, 2018, 6:39 PM

The Supreme Court heard oral argument today in Microsoft’s ongoing dispute with the U.S. government over Irish-held data.  The lead-up to the case is summarized here and my recap of oral argument is here.

The oral argument was fascinating for a number of reasons, and interested readers should read the entire transcript. In particular, a few themes stood out:

 

This will probably not be resolved along ideological lines

I would be surprised if the justices divide along ideological lines.  Justice Sonia Sotomayor seemed most persuaded by Microsoft’s position, and Justice Neil Gorsuch expressed some sympathy too—suggesting that the government’s position was to “ignore” the extraterritorial aspects of the case. But Justice Stephen Breyer may be inclined to rule the other way.  He suggested that magistrate judges ought to be able to issue warrants for foreign-held data as long as they take account of comity concerns—factors like whether another state has a legitimate interest in the data’s disclosure.

The oral argument, at the very least, did not reflect any clear ideological fault lines (though there were fault lines, as we’ll see). There is simply no clear ideological valence to the question of how to adapt a statute from 1986 to the global cloud.

 

Congress or the Courts?

One of the potential fault lines that was exposed early on is the question of whether the court is the right body to resolve this dispute. Justices Ruth Bader Ginsburg and Sotomayor both asked why they shouldn’t just let the lower court opinion (in Microsoft’s favor) stand and allow the case to be decided by congressional action. This makes some intuitive sense:  If the Stored Communications Act (SCA) is so hard to apply to a global cloud, let Congress update it. And Congress is trying. (Senator Orrin Hatch, one of the sponsors of the CLOUD Act, sat in the front row in a not-so-subtle suggestion to the court that Congress was working on it). This is consistent with Microsoft’s position, the thrust of which was a warning to the court: “Don’t break the cloud.”

But courts tend not to warm to being told that they are unsuited to the task of resolving the case or controversy before them, and there was some evidence of this at the argument. Justice Breyer and Justice John Roberts (not ideologically aligned to say the least) both reiterated that this case is, at some level, not all that new or different: courts issue orders for evidence, including for foreign-held evidence, and courts have the tools to weigh foreign concerns where necessary.

 

Sovereignty concerns are real, and courts have tools to address them

Some people see this case as a question of statutory interpretation and not one that implicates concerns about sovereignty. Several members of the court appeared to disagree. A number of Justices took seriously the idea that foreign sovereigns might have an interest in how the U.S. manages investigations in a world of cloud computing—Justice Sotomayor pointed to the number of foreign amici in the case. Just as importantly, several Justices seemed to think it worth struggling over whether the comity doctrines might help the court in this case and others like it.  Justice Breyer suggested that a comity analysis could be useful at the outset, where a magistrate judge might weigh foreign affairs implications of a warrant for foreign-held data. And Justice Elena Kagan seemed open to figuring out how a court might go about weighing those interests.  

 

Data is not metaphysical

Both sides of the case seemed to agree that data has real physical characteristics and moves along physical cables that pass through real territories that might have an interest in it. The U.S. government disagreed that Ireland has an interest in this particular case, but it did not dispute this characterization of how the data storage system works when a firm complies with a warrant issued under the SCA. Microsoft emphasized that data is stored on physical drives and passed along physical wires to tell a robot in another jurisdiction to perform a physical search on a disk there. The Justices seemed taken with this description of the world—Justice Sotomayor at one point saying that her imagination was running wild at the thought of remote-controlled robots doing things in far away places.

But interestingly, the fact that data has physical characteristics did not appear to the court to be dispositive of anything. The court seemed to be worried primarily about the statute’s language (which doesn’t say anything about the specific physical location of data centers), the practical ramifications of the decision (especially if the court rules for Microsoft, leaving data inaccessible to law enforcement in the U.S.) and the foreign interests in the case.  And, to the Justices, none of these issues seemed to turn on the fact that data is physical and not metaphysical or ethereal.

 

What was not said

One thing that was not mentioned was how the world might react to this case. For a court that often has a keen eye on whether it is in step with other courts around the world (for better or for worse), silence on this issue was notable.

Countries around the world are watching this case because it could be used as a precedent—privacy advocates have called it a dangerous precedent—for the state to exert extraterritorial control over the internet. If the U.S. can do it, the thought goes, then other states will do it. The problem with this concern is that states have long asserted, under longstanding principles of international law, the authority to regulate some international conduct because it has effects in the state, or it concerns the state’s citizens, and so on. So it is unsurprising that states are already busy regulating the internet in ways that have extraterritorial effects. The Canadian Supreme Court has attempted to compel Google to take down certain links worldwide. French authorities have attempted something similar. And just this week, a top EU regulator announced that she expected the EU’s impending privacy regime, the General Data Protection Regulation, to have extraterritorial effect. (This is particularly striking because the EU filed an amicus brief in the Microsoft case to argue, more or less, that it was hesitant about extraterritorial application of U.S. law.)