Microsoft Claims Victory in Challenge to DOJ’s Practice of Seeking “Gag Orders” under the Stored Communications Act

10/31/2017
Client Alert

Last week, the Department of Justice (DOJ) announced a new policy that significantly restricts its practice of seeking non-disclosure orders under the Stored Communication Act (SCA), 18 U.S.C. § 2705(b), in connection with requests for customer information.  These so-called “gag orders” prohibit service providers from alerting customers – and the general public – to the existence of the requests.

In April 2016, Microsoft filed a lawsuit contending that indefinite non-disclosure orders were widespread and violated both the company’s First Amendment rights to communicate with its users and the Fourth Amendment rights of its customers. The suit claimed that over two thirds of SCA requests Microsoft received over an 18-month period included indefinite non-disclosure provisions (amounting to over 1,750 orders in total). In February, the district court granted DOJ’s motion to dismiss Microsoft’s Fourth Amendment claim but allowed the First Amendment claim to proceed, setting the stage for a possible significant defeat for DOJ.[1]

Last week, DOJ published a new policy on its website governing requests for non-disclosure orders by federal law enforcement. The new policy states that protective orders must be anchored in the specific facts of the case and should generally last no longer than one year, including provisions requiring that:

  • Every § 2705(b) order is required to have “an appropriate factual basis” and “should extend only as long as necessary to satisfy the government’s interest.”
  • Prosecutors are required to conduct “an individualized and meaningful assessment” in advance of seeking the order and may only seek an order “when circumstances require.”
  • “Barring exceptional circumstances, prosecutors filing § 2705(b) applications may only seek to delay notice for one year or less.”

Even as the new policy does not amount to an outright prohibition on indefinite non-disclosure orders, Microsoft proclaimed victory early this week, explaining in court filings seeking voluntary dismissal of its lawsuit that the new policy “increases transparency, enhances the privacy rights of Microsoft’s customers, and represents an important step forward for both privacy and free expression.” Of note, the new policy was announced just days after the Supreme Court granted appellate review of a Microsoft challenge to the SCA regarding its applicability to user data stored overseas, underscoring that the 1986 law’s application to the digital era will continue to be a source of controversy and disagreement.[2]

 


[1] See our client alert on the District Court decision allowing Microsoft’s case to proceed.

[2] See our client alert on the Supreme Court granting cert in Microsoft v. United States.

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