High Court Grapples With Case of Emails Stored Abroad

Several justices said it wasn’t ideal that the case was controlled by a 1986 federal law on electronic records that Congress adopted before email and cloud-computing were part of the social fabric. Still, the court appeared to be searching for a way to interpret the outdated law that wouldn’t rob the government of tools to investigate crimes with a digital trail that crossed U.S. borders.

“This is what troubles me,” Justice Samuel Alito said. “It would be good if Congress enacted legislation that modernized this. But in the interim, something has to be done.”

The justices were reviewing a lower-court ruling Microsoft won in 2016 that clipped the Justice Department’s authority to obtain overseas emails. The battle dates back to 2013 when the U.S. got a warrant that ordered Microsoft to hand over messages in an email account that was linked to narcotics trafficking. Microsoft argued the warrant wasn’t valid because the emails were stored in Ireland.

Microsoft lawyer Joshua Rosenkranz argued the 1986 law, called the Stored Communications Act, didn’t allow the U.S. government “to unilaterally reach into a foreign land to search for, copy, and import private customer correspondence” that is stored on a foreign computer and protected by foreign law.

Chief Justice John Roberts, however, said Microsoft was a U.S.-based company and had control over where it chose to store emails and other consumer data.

“It’s not the government’s fault that it’s located overseas,” the chief justice said. He added that if Microsoft prevailed, nothing would prevent the company from moving the emails of U.S. customers to overseas servers to protect their data from disclosure.

“You might gain customers if you can assure them, no matter what happens, the government won’t be able to get access to their emails,” Chief Justice Roberts said.

Mr. Rosenkranz said such a scenario “would never happen” because Microsoft relies upon U.S. facilities to provide the best and fastest service to 200 million domestic customers. People who are intent on hiding their correspondence from the government “don’t use Microsoft’s services,” he said.

Mr. Rosenkranz also warned the court that a win for the government could do serious harm to the U.S. tech sector. “If you try to tinker with this without the tools that only Congress has, you are as likely to break the cloud as you are to fix it,” he said.

Google, which has waged similar battles with the government, and an array of other leading tech companies are supporting Microsoft in the case.

Justices Sonia Sotomayor and Ruth Bader Ginsburg suggested the wait-for-Congress approach had some appeal.

“Wouldn’t it be wiser just to say, ‘Let’s leave things as they are—if Congress wants to regulate in this brave new world, it should do it’?” Justice Ginsburg asked.

Sen. Orrin Hatch (R., Utah), who attended the oral argument, recently proposed bipartisan legislation to update the law and give law enforcement access to overseas customer data, while also providing protections for email and cloud computing providers. It isn’t clear if, or when, lawmakers may move forward on such a bill.

No justice during Monday’s session clearly embraced Microsoft’s reading of the 1986 law. Nor did the justices echo concerns about customer privacy that have been voiced by the tech industry.

The government noted that investigators would still have to get a warrant to see the emails.

“It’s not a case about privacy,” Justice Department lawyer Michael Dreeben told the court. “The government has the gold standard of an instrument to address privacy interests here—a probable-cause-based warrant issued by a judge that describes with particularity what we want.”

Mr. Dreeben said the lower-court ruling in Microsoft’s favor “has caused grave and immediate harm to the government’s ability to enforce federal criminal law.”

A decision is expected by the end of June.

Write to Brent Kendall at brent.kendall@wsj.com and Nicole Hong at nicole.hong@wsj.com