Can the government order an ISP to relinquish documents stored overseas? This is a great question and nicely addressed in the article below.
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Microsoft Protests Order to Disclose Email Stored Abroad

By STEVE LOHRJUNE 10, 2014 NY Times

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Microsoft is challenging the authority of federal prosecutors to force the giant technology company to hand over a customer’s email stored in a data center in Ireland.

The objection is believed to be the first time a corporation has challenged a domestic search warrant seeking digital information overseas. The case has attracted the concern of privacy groups and major United States technology companies, which are already under pressure from foreign governments worried that the personal data of their citizens is not adequately protected in the data centers of American companies.

Verizon filed a brief on Tuesday, echoing Microsoft’s objections, and more corporations are expected to join. The Electronic Frontier Foundation is working on a brief supporting Microsoft. European officials have expressed alarm.

In a court filing made public on Monday, Microsoft said that if the judicial order to surrender the email stored abroad is upheld, it “would violate international law and treaties, and reduce the privacy protection of everyone on the planet.”

The search warrant was granted by a federal magistrate judge in New York last December, as part of a criminal inquiry. Neither the identity nor the nationality of the customer has been revealed. The company objected, saying that because the customer’s emails were stored in Dublin, they were beyond the reach of a domestic search warrant. Search warrants seeking information abroad are rare, experts said.

But Microsoft lost that round two months ago, and this week is beginning its push for a reversal in Federal District Court in New York.

“This is a policy decision as well as a legal one,” said Peter Swire, a professor at the Georgia Institute of Technology, who served on a White House advisory group on intelligence and communications technologies last year.

In a criminal proceeding, the debate plays out in public court filings from the outset. That openness is in sharp contrast with intelligence data harvesting, which was conducted for years in secrecy, with minimal review, until Edward J. Snowden’s leaks showed the extent of clandestine information gathering by the National Security Agency.

In his ruling in April, James C. Francis, a magistrate judge in federal court in New York, wrote, “Microsoft’s argument is simple, perhaps deceptively so.”

Microsoft contends that the rules that apply to a search warrant in the physical world should apply online. The standard of proof for a search warrant is “probable cause” and “particularity” — that is, a person’s name and where the person, evidence or information reside.

A subpoena — the less powerful court-ordered investigation tool — requires only that the information is “relevant to an ongoing investigation.” But a subpoena, unlike a search warrant, requires that the person being investigated be informed.

Judge Francis, in his order, wrote that the Electronic Communications Privacy Act, passed in 1986, created an in-between category intended at the time to protect people from indiscriminate data gathering that subpoenas might allow of online communications. The result, he wrote, is “a hybrid: part search warrant and part subpoena,” and applied to information held in Microsoft’s data center overseas.

Privacy experts are concerned that the judge’s order, if it stands, will open the gate to unchecked investigations in the digital world, of anyone, anywhere. “United States search warrants do not have extraterritorial reach,” said Lee Tien, a lawyer for the Electronic Frontier Foundation. “The government is trying to do an end run.”

But the Justice Department asserts that Microsoft is stretching the law. In a filing, Preet Bharara, United States attorney for the Southern District of New York, described the company’s analogy between physical search warrants and digital ones as “misguided,” and said Internet companies cannot avoid complying with a search warrant “simply by storing the data abroad.”

If Microsoft prevailed, he wrote, it would be “a dangerous impediment to the ability of law enforcement to gather evidence of criminal activity.”

A spokeswoman for his office said it would have no comment beyond the court filings.

Governments routinely exchange information in criminal cases through cooperative agreements called mutual legal assistance treaties. In his order, Judge Francis cited a source saying the treaty process could be “slow and laborious.”

But Mr. Swire, an Internet policy and privacy expert, said these treaties were the appropriate mechanism for obtaining information from abroad in criminal cases. And he noted that the Obama administration had sought increased funding for handling legal assistance treaty cases.

The warrant suggests that the inquiry involves drugs. The warrant specifically requests any email or other communications “pertaining to narcotics, narcotics trafficking, importation of narcotics into the United States” and related money laundering.

Industry experts say it is highly likely the person whose emails were sought resided in Europe when using the Microsoft web email service, Outlook.com (though the customer apparently used an address with the service through its previous name, MSN.com).

For faster service, the big online service providers — like Google, Microsoft, Amazon and Yahoo — locate data centers near major markets around the world. Data is typically stored nearest the customer’s location, for shorter transmission distances.

In its court filing this week, Microsoft said its global network of data centers included more than one million computers in more than 100 data centers spread over 40 countries.

The Snowden leaks and the view that American tech companies were too cooperative with the United States government have hurt the prospects for American tech companies abroad. Earlier estimates of potential lost sales over the next few years have ranged as high as $180 billion, or 25 percent of industry revenue, according to Forrester Research.

To address those concerns, the companies are building more data centers abroad. But that strategy looks less appealing if companies can be ordered to hand over data regardless of where it is stored, as Microsoft is being order.

In its filing, Microsoft emphasized that point. The government’s position, it warned, will “ultimately erode the leadership of U.S. technology companies in the global market.”

The case is expected to run for some time. Oral arguments, before Judge Loretta A. Preska, are scheduled for July 31. After her ruling, there may be appeals.

Whatever the outcome, Orin Kerr, a professor at George Washington University Law School, said Congress needs to update the Electronic Communications Privacy Act of 1986. Back then, he noted, dial-up service from CompuServe was the state of the art. “The idea of having email stored abroad was not something that was imagined when the law was passed,” he said.
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