US v. Microsoft Litigation Provides the Supreme Court with a Rare Opportunity to Further Clarify and Define the Role of Comity in International Discovery Disputes

The United States Supreme Court recently granted certiorari in the landmark case of United States v. Microsoft Corp. This matter presents the Court with an opportunity to establish new precedent in the field of international e-discovery. The dispute before the Court concerns whether a United States-based email service provider must disclose electronic communications within its control, but stored abroad, in response to a criminal warrant issued pursuant to the Stored Communications Act (“SCA”). However, an amicus brief recently filed by some of the country’s leading e-discovery practitioners and professors, including Kilpatrick Townsend’s Global Discovery Counsel, Craig D. Cannon, urges the Court to use this occasion to provide further guidance as to the appropriate considerations of international comity that must be weighed when faced with a cross-border discovery dispute.

The Underlying Dispute

The SCA authorizes the United States Government to compel the disclosure of electronic communications by a service provider pursuant to a criminal warrant. Microsoft, a United States service provider located in Washington, operates a number of well-known email services, including MSN, Hotmail, and Outlook. Microsoft stores the contents of its users’ emails, along with other associated information, on a global network of servers located in approximately forty countries. However, Microsoft has the ability to access information stored anywhere on its network from its offices in the United States.

In December 2013, the United States Government obtained a warrant pursuant to the SCA requiring disclosure of information associated with a Microsoft email account the Government had probable cause to believe was being used to further illegal drug activity in the United States. The contents of the emails associated with the account were stored on a server in the Republic of Ireland. Microsoft moved to quash the warrant as to all materials stored abroad, arguing that disclosure of electronic information stored outside the United States would be an impermissible extraterritorial application of the SCA.

The United States Magistrate Judge assigned to the case denied Microsoft’s motion to quash, and the United States District Court affirmed on de novo review. The Second Circuit, however, reversed, holding that enforcing the warrant as to information stored abroad would constitute an impermissible extraterritorial application of the statute. After the denial of the Government’s motion for rehearing, the United States Supreme Court granted certiorari. The question before the Court, as set forth in the Brief of the United States, is

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.

Arguments Before the Supreme Court

The United States Government has made a number of arguments before the Supreme Court as to why the Second Circuit’s decision should be reversed and the warrant should issue. The Government first contends that the warrant in this case does not have an extraterritorial reach in the first place. According to the Government, rather than focusing on the “right to privacy” as the Second Circuit and Microsoft contend, the SCA focuses on domestic conduct—the disclosure of electronic records to the Government. Since any such disclosure would occur in the United States, this would constitute a permissible domestic application of the Act. The Government contends that such an interpretation is consistent with long-standing common-law principles holding that the test for production of documents is control, not location. Thus, as long as a United States corporation has access to the information from its United States offices, disclosure is required under the SCA without regard to the actual physical location of the data.

The Government further contends that the more restrictive interpretation of the SCA adopted by the Second Circuit and Microsoft would have negative policy consequences. Such an interpretation would allow a provider to place information beyond the reach of United States law enforcement simply by building servers outside the United States. It would also permit criminals to place their information beyond the reach of United States law enforcement by lying about their country of residence when creating an email account, thus ensuring that the information associated with the account would be stored on a foreign server closer to the asserted country of residence rather than an allegedly more distant United States server. According to the Government, this “would erect an insurmountable barrier to U.S. law enforcement’s securing of critical evidence.”

Finally, the Government downplays Microsoft’s concern that its narrower interpretation of the SCA is necessary to avoid international discord. The Government claims that its interpretation of the SCA is consistent with the laws of many other nations, and Microsoft’s concerns about being subjected to conflicting legal regimes can be addressed through existing mechanisms should they actually manifest.

The Importance of International Comity

It is this last argument about international relations that forms the impetus behind the amicus brief filed by some of the country’s leading e-discovery practitioners. Rather than take a position on the direct question presented to the Court, the amicus brief stresses that, in making its ultimate ruling, the Court should provide additional clarity and guidance as to the role of comity in defining the proper scope of United States discovery of data housed beyond United States boundaries.

The Supreme Court first recognized the importance of conducting a comity analysis when foreign laws conflict with United States discovery obligations in Société Nationale Industrielle Aérospatiale v. United States, 482 U.S. 522 (1987). The Court listed five factors to be considered in the analysis. Those factors are:

1. The importance to the . . . litigation of the documents or other information requested;
2. The degree of specificity of the request;
3. Whether the information originated in the United States;
4. The availability of alternative means of securing the information; and
5. The extent to which noncompliance with the request would undermine important interests of the United States, or compliance with the request would undermine important interests of the state where the information is located.

Unfortunately, in the 30 years since Aérospatiale was decided, lower courts have not only struggled with application of the comity analysis, but appear to have lost sight of the policy considerations informing the analysis. The case law that has developed in this area has been contradictory. When a United States party wants discovery from abroad, courts tend to rule that foreign laws should not block their access and they should not have to use international treaties. On the other hand, when a foreign party wants United States data, courts tend to hold that United States law should prevail and the party must comply with applicable treaties. This contradiction is problematic, as United States courts need to afford due respect to foreign laws so that other countries will reciprocate and provide due respect to United States laws.

Moreover, courts have struggled with conducting the comity analysis, finding scant guidance in Aérospatiale itself. When balancing United States and foreign interests, most judges lack experience with and understanding of the applicable foreign law and will allow familiar domestic laws and procedures to win out. Aérospatiale has been used as an excuse by judges to stick with the familiar and avoid conducting an analysis of unfamiliar foreign interests. Indeed, in the 30 years since Aérospatiale, only a handful of courts conducting the comity analysis have found the balance tips in favor of the foreign interest. Finally, because cross-border discovery disputes are interlocutory in nature, they rarely receive appellate review. 

Thus, this is a rare and important opportunity for the Court to provide necessary clarity and guidance on the proper considerations in conducting the comity analysis. The lower courts and the parties themselves have failed to devote proper attention to this issue over the course of the litigation. Neither the district court nor the Second Circuit analyzed the Aérospatiale factors, and the United States Government mentions Aérospatiale only in passing in its brief, focusing primarily on the potential harm to Microsoft of being subjected to competing legal regimes rather than on the respect that must be accorded to the foreign laws themselves.

Accordingly, amici request the Court

1. Acknowledge that the actions required to produce in the United States documents stored in a foreign country raise international sovereignty concerns, even where such documents are accessible from the United States, because such actions could conflict with foreign law;
2. Require, pursuant to Aérospatiale, that where there is a conflict, courts demonstrate due respect for foreign sovereign interests by performing a comity analysis to determine if the requesting party should comply with an appropriate treaty;
3. Guide courts on how to properly balance United States and foreign interests under the Aérospatiale factors; and
4. Where a court determines that the requesting party need not use a treaty or foreign discovery process and the conflict remains, require courts and parties to adopt appropriate measures to reduce or mitigate violations of foreign law.

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