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Microsoft continues to push back against a controversial search warrant procedure that the U.S. government, as part of an ongoing narcotics investigation, is using to demand emails stored in Ireland.

On Friday, [company]Microsoft[/company] responded to a new court order by repeating its position that it would not comply with the data request, and insisting that the case go before the Second Circuit Court of Appeals.

While the details of the dispute are largely procedural, the case is significant because it comes at a time of heightened European sensitivity over how U.S. companies treat data stored on servers located in the European Union. As a result, Microsoft and others are anxious to signal to Europe that they will resist certain data demands from the U.S. government.

The issue in the Irish narcotics investigation is whether a U.S. search warrant can let investigators obtain overseas data. Ordinarily, a search warrant only applies within the country’s physical borders but, in the case of data held in the cloud, the U.S. government has taken the position that such restrictions are not practical and do not apply — in part because obtaining emails from a server is not akin to a traditional physical search.

So far, a district court in New York has sided with the government, including a July 31 ruling that ordered Microsoft to comply with the warrant. That order was the subject of a temporary stay but, as a result of Friday’s ruling, that stay is no longer in force; however, in the latest legal twist, Microsoft on Friday also told Reuters it will still not comply with the order.

As a result, the stage is now set for the government to ask that Microsoft be held in contempt of court. If that occurs — as appears likely — Microsoft would then ask an appeals court to decide if the contempt finding is valid.

Overall, however, this latest clash is mostly symbolic. As the latest court ruling notes, both the government and Microsoft have agreed that the question of overseas search warrants should go before an appeals court, but that they disagree on the legal route for doing so.

As such, a contempt of court order would almost certainly be suspended while the larger issues are sorted out. As the Justice Department explained in a recent letter, cited by the court in Friday’s ruling:

“If Microsoft refuses to comply with the order, then the Government respectfully requests that the Court issue a contempt order that would, in turn, be a properly appealable final order, which could be stayed on consent pending appeal.”

The upshot, then, is that Microsoft will continue to withhold the emails in the Irish drug investigation, while the courts sort out what the rules should be for overseas search warrants.

Microsoft Warrant Ruling

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