MSFT Microsoft Corporation

By Brent Kendall 

This article is being republished as part of our daily reproduction of WSJ.com articles that also appeared in the U.S. print edition of The Wall Street Journal (April 18, 2018).

WASHINGTON -- The Supreme Court on Tuesday dropped a case that examined whether emails and other data stored overseas are subject to U.S. search warrants, after Congress passed a law that allows such actions.

The case had pitted federal and state authorities against an array of leading tech companies. It centered on a dispute between the Justice Department and Microsoft Corp., which resisted complying with a warrant that sought emails from an account allegedly tied to illegal drug activity.

Microsoft had stored the emails in Ireland and said U.S. warrants didn't reach beyond domestic borders. The Justice Department said the warrant was enforceable because the government sought disclosure in the U.S., where Microsoft is based. It had warned that a win for the company would hamper federal and state investigations into an array of crimes.

The Supreme Court heard oral arguments in February, and several justices expressed frustration at having to decide the case under a 1986 federal law on electronic records that Congress adopted before email and cloud-computing were everyday tools.

Now, they don't have to. Weeks after the argument, Congress passed legislation to modernize the law and give law enforcement access to data even if it is stored overseas.

"This case, therefore, has become moot," the court wrote in a three-page opinion.

Both the Justice Department and Microsoft had filed court papers agreeing the case was no longer a live dispute.

The Supreme Court also wiped out an appeals-court ruling that Microsoft won during an earlier stage of the case, as well as an earlier contempt finding against the Redmond, Wash., software giant.

Congress passed the new law, called the Cloud Act, as part of a $1.3 trillion spending bill last month. It had won support from tech titans like Microsoft and Alphabet Inc.'s Google that have battled the government on access to overseas data, but some privacy advocates criticized the law's data protections as too weak.

The act makes clear that warrants can apply to data that U.S.-based tech companies store around the world. Tech firms, in turn, have a right to challenge warrants in court based on privacy laws in the country where the data are stored.

The legislation also allows for bilateral agreements between the U.S. and other nations about how to address future data disputes, including other countries' requests for data in the U.S.

"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," said Brad Smith, Microsoft's president and chief legal officer. "As the governments of the U.K. and Australia have recognized, the Cloud Act encourages these types of agreements, and we urge the U.S. government to move quickly to negotiate them."

A Justice Department spokeswoman declined to comment.

--Brent Kendall

Write to Brent Kendall at brent.kendall@wsj.com

(END) Dow Jones Newswires

April 18, 2018 02:47 ET (06:47 GMT)

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