Post on 03-Jun-2018
8/11/2019 Microsoft Warrant Ruling
1/14
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF
NEW
YORK
-----------------------------------X
IN THE MATTER
OF
A
WARRANT
TO
SEARCH A CERTAIN E-MAIL ACCOUNT
CONTROLLED
AND
MAINTAINED
BY
MICROSOFT CORPORATION
-----------------------------------X
, ......... ........_ ........... .
.,.
...
t; '( .. '-A ' ''
"
....... 0
04o,; .
........-...MJ ..,..........,....J,;_It/
...
yt........,.l
i .
i"?$ ( 3@ &/
8/11/2019 Microsoft Warrant Ruling
4/14
8/11/2019 Microsoft Warrant Ruling
5/14
before
two cour t s a t
the
same t ime . ' Id. (quoting United
Sta tes v. Salerno,
868 F.2d
524, 540
(2d Cir . 1989)) .
Against
t h i s
background,
the
Court
of
Appeals
in
Rodgers
r e s i s t e d
the
supe r f i c i a l a t t r ac t iveness o f
a per se ru le
t ha t
f i l i n g of a
not i ce
of
appea l
au tomat ica l ly d ives t s the
d i s t r i c t cour t
o f
j u r i sd i c t i on
as
to matters covered by the no t ice [of appeal]
because such
a
ru le
i s
subjec t
to
abuse, and
[]
ap p l i ca t i o n
of
the d i v e s t i t u r e ru le
must
be fa i t h fu l to the pr inc ip le of
j ud ic ia l
economy
from
which
it
spr ings . Id .
Here,
Microsof t
f i l ed a not i ce
of
appeal seeking review
of
the
Ju ly 31 Order. But the f i l i n g of a premature no t ice
o f
appeal does
not
render a
d i s t r i c t
cour t
powerless
to
pres ide
over a
cr iminal case before
it
See
id .
a t
251-52 ( We f a i l to
see any e f f i c i en cy
in al lowing
a
par ty
to
h a l t d i s t r i c t cour t
proceedings
a rb i t r a r i l y by
f i l i n g
a
p l a i n l y
unauthor ized not i ce
of appeal
which
confers
on t h i s cour t
the
power to
do nothing
but
dismiss
the appea l . , ) . Thus,
the
Court
w i l l not end
i t s
ana lys i s
a t
Microsof t ' s no t i ce
of
appeal . It must look fu r th e r
to
determine whether i t s orde r i s indeed a f i na l , appea lab le
order .
B.
Standard
fo r
I s su ing
a Stay
Pending
Appeal
The four fac to rs to be
considered
in i s su ing
a
s t ay
pending
appea l
a re
well
known: ' (1) whether the
s t ay
app l i can t
has made
a s t rong showing
t ha t he
i s
l i k e l y
to succeed
on the
5
!"#$ &'&()*+),-.&/)01 2345*$67 8, 9:;$< ,.=-8=&/ >"?$ A 3@ &/
8/11/2019 Microsoft Warrant Ruling
6/14
mer i t s ; (2) whether the appl icant wil l be i r r ep a rab ly i n ju red
absent a
s t ay ; (3)
whether
i ssuance of
the
s t ay
wi l l
subs tan t i a l ly
i n ju re
the other
pa r t i e s in t e r e s t ed
in
the
proceeding;
and
(4) where
the
pub l ic i n t e r e s t l i e s . ' In re
World Trade Ctr .
Disas t e r
Si te Li t ig . , 503 F.3d 167, 169 (2d
Cir . 2007)
(quot ing
Hil ton
v.
Braunski l l ,
481 U.S. 770,
776
(1987))
In evalua t ing l i t i g a n t ' s
l i ke l ihood
o f
success
on
appeal , a d i s t r i c t cour t must cons ider the l i k e l i h o o d t ha t the
Court
of
Appeals has
j u r i sd i c t i on
over
the sub jec t case .
See,
United Sta tes
v.
Ste in ,
452 F.
Supp. 2d 281, 285-86
(S.D.N.Y. 2006);
In
r eAppl i ca t ion
of
Chevron Corp. , 709 F.
Supp.
2d
283, 300 (S.D.N.Y. 2010).
Accordingly,
the i n s t an t motion
requ i re s the
Court to
eva lua te whether
the Court of Appeals
has j u r i s d i c t i o n
over the
Ju ly
31
Order.
C Appel la te
Review
of the
Ju ly 31
Order
The Government
argues
t ha t the July 31 Order i s not a f ina l
order
sub jec t to appeal
a t
t h i s s tage in
the
l i t i g a t i o n .
Gov t
Ltr . a t 2.)
(See,
Fina l i ty
as a
condi t ion
of review i s
an
h i s t o r i c
cha rac t e r i s t i c
of fede ra l
appel la te
procedure .
Cobbledick v.
Sta tes ,
309
U.S. 323, 325
(1940).
Thus,
a pa r ty
i s
ord ina r i ly
en t i t l ed
to a s ing le appeal ,
to
be defer red u n t i l
f ina l judgment
has been entered,
in which cla ims o f d i s t r i c t
6
!"#$ &'&()*+),-.&/)01 2345*$67 8, 9:;$< ,.=-8=&/ >"?$ B 3@ &/
8/11/2019 Microsoft Warrant Ruling
7/14
court e r ro r a t
any
s tage
of
the
l i t i g a t i o n
may be ven t i l a t ed .
Corp.
v.
Desktop Direc t , Inc . , 511
U.S.
863, 868
(1994).
Following
from t h i s ,
8
U.S.C.
1291
gran ts
the cour ts
of
appeals j u r i s d i c t i o n
of
appeals from a l l f ina l decis ions of
the
d i s t r i c t cour ts
of
the United Sta tes
In t h i s c i r c u i t , an
order denying
a
motion
to
quash
a grand
j u ry
subpoena
i s not a
f ina l
dec i s ion and i s , therefo re , not
immediately appealable under 8 U.S.C. 1291. See,
e .g . ,
United
Sta t e s
v.
Punn,
737
F.3d
1,
5
(2d
Cir .
2013). This
genera l ru l e
app l i e s
whether the subpoena i s i s sued in
connect ion
wi th
c i v i l and cr iminal
ac t ions ,
o r
grand
ju ry
proceedings , and
whether
the person (or en t i ty ) seeking to
prevent
enforcement of the
subpoena i s a p a r ty
to the
l i t i g a t i o n
o r a non-par ty witness . In
re Aircrash a t
Bel l e
Harbor,
N.Y.
on
Nov.
12,
2001,
490
F.3d
99,
104
(2d
Cir .
2007)
( in te rna l
c i t a t i o n s
omit ted) . In such ins tances ,
[ t ]o
obta in appel la te
review, the subpoenaed person ord ina r i ly must defy the d i s t r i c t
c o u r t ' s enforcement order , be held
in
contempt,
and
then appeal
the contempt order , which
i s regarded as
f ina l
under
1291.
Id .
( in te rna l quota t ion marks
omit ted) .
The
dr iv ing force
behind
t h i s
ru l e
i s
s t ra igh t fo rward ,
as
the Supreme Court has
co n s i s t en t l y
held
t h a t
the
necess i ty fo r exped i t ion
in
the
admin i s t ra t ion of
the cr iminal
law
j u s t i f i e s
pu t t ing
one
who seeks to r e s i s t
the p roduc t ion o f
7
!"#$ &'&()*+),-.&/)01 2345*$67 8, 9:;$< ,.=-8=&/ >"?$ C 3@ &/
8/11/2019 Microsoft Warrant Ruling
8/14
des i red
informat ion
to a choice
between compliance
with a t r i a l
cour t ' s orde r
. p r i o r to
any
review
of t h a t
order ,
and
res i s tance to t ha t orde r with the
concomitant p o s s i b i l i t y
of
an ad jud ica t ion o f contempt
i f
hi s
claims
a re
re jec ted
on
appeal .
United Sta t e s
v .
Ryan, 402 U.S. 530, 533
(1971)
Indeed, a
contempt f inding
i s requ i red
so
t h a t the
chal lenge
becomes
so
severed from the main
proceeding
as
to
permi t an appeal .
Cobbledick, 309 U.S. a t 328.
Not
a l l
forms
of
compulsory process ,
however,
requ i re
a
contempt
f ind ing
as
a
p re req u i s i t e
to appeal .
A
d i s t r i c t
cour t
o rde r enforc ing a subpoena i s sued by a government agency in
connec t ion wi th
an
admin i s t ra t ive inves t iga t ion
may be
appea led
immediately
without
f i r s t
performing the r i t u a l o f obta in ing a
contempt order . United Sta tes
v. Constr .
Prod.
Research, Inc . ,
73 F.3d
464,
469
(2d Cir . 1996).
That i s because
such orde rs
a re se l f -con ta ined ,
so
f a r
as
the
j ud ic ia ry
i s
concerned .
Kemp v . Gay,
947 F.2d 1493,
1496
(D.C.
Cir .
1991)
(quot ing
Cobbledick,
309
U.S. a t
329-30) .
Here,
the Warrant was i s sued as p a r t o f an
ongoing
c r imina l i n v es t i g a t i o n
of narco t i c s
t r a f f i ck ing .
(Ltr . from
AUSAs J u s t i n Anderson & Ser r in
Turner to Hon.
Lore t t a A. Preska
(Aug.
20,
2014)
[dkt .
no.
88]
.)
The
Government,
l iken ing
the
Warrant
to a grand j u ry subpoena sub jec t to
the ru le
ou t l ined
above,
argues
t h a t the chal lenged aspect
of
the warrant
i s
the
func t iona l equ iva len t
o f
a subpoena .
(Gov' t Lt r . a t
2.)
8
!"#$ &'&()*+),-.&/)01 2345*$67 8, 9:;$< ,.=-8=&/ >"?$ . 3@ &/
8/11/2019 Microsoft Warrant Ruling
9/14
Thus,
the Government contends,
the
July 31 Order, which a f f i rmed
den ia l
of Microsof t ' s
motion
to
vacate ,
i s
a not
f ina l order .
See
id . )
In response, Microsof t
avers
t ha t
the
Warrant
should
be t r ea t ed l i ke an admin i s t ra t ive subpoena, render ing t he Ju ly
31 Order
sub jec t
to immediate
appe l l a t e
review.
a t 3.)
Microsof t Lt r .
Under
the law se t fo r th
above,
the Ju ly 31 Order
i s
not a
f ina l
order .
To view
the Warrant
as
an admin is t ra t ive subpoena,
as Microsof t
sugges ts ,
ignores
the
r a t iona le
behind
cases
l i ke
Ryan
as wel l as
c r i t i c a l
di f fe rences
between the i n s t a n t case
and an admin i s t ra t ive proceeding .
Fi r s t ,
because
the Warrant
i s
p a r t
of
an
ongoing
cr iminal
inves t iga t ion , t impl i ca t e s
the
necess i ty
fo r
exped i t ion in the admin i s t ra t ion
of
the c r imina l
law
Ryan,
402 U.S.
a t
533.
Second, and s im i l a r l y ,
the
Ju ly
31
Order
d i f f e r s from
an
orde r enforc ing
a
subpoena
i s sued
by
a
government agency in
connec t ion
wi th
an
admin is t ra t ive
inves t iga t ion because
t
i s not se l f -con ta ined from the
j ud i c i a ry ' s
perspec t ive .
Indeed, a c r imina l i nves t iga t ion
could
wel l
lead
to
fu r th e r
proceedings
before a grand ju ry , the
d i s t r i c t
cour t ,
o r both. Accordingly, the Ju ly 31 Order
i s
proper ly analogized to
an
orde r
denying
a
motion
to
quash
a
grand ju ry subpoena, which
i s not
a f ina l
dec i s ion
and
t he re fo re , not
immediately appealable
under 28 U.S.C. 1291.
!"#$ &'&()*+),-.&/)01 2345*$67 8, 9:;$< ,.=-8=&/ >"?$ 8 3@ &/
8/11/2019 Microsoft Warrant Ruling
10/14
Thus,
the
Court concludes
t ha t
Microsof t ' s appea l i s
defec t ive
a t t h i s
s t age .
D
That
The
Ju ly
31
Order
Be
Fina l
Microsoft
argues t h a t
because the Court
t r e a t e d
the
Ju ly 31
Order as
re so lv ing
a l l
i s sues
before
it
t ha t
orde r i s
f ina l
for
purposes
of appeal . (Microsoft
Lt r .
a t
2.}
As a l luded to
above, [w]hen a
judgment has
been so se t
fo r th and docketed,
the ques t ion
remains whether o r
not it
was
f ina l
within the
meaning
of 28
U.S.C.
1291.
El lender
v.
Schweiker, 781 F.2d 314, 317 (2d
Cir .
1986). The t each ing
of
the Supreme Court
i s
tha t the
determining f ac to r i s 'whether
the
d i s t r i c t cour t in tended
the
judgment t o r ep resen t t he f ina l
dec i s ion
in the case . ' Id. (quot ing Bankers Trust Co.
v.
Mall is , 435 U.S. 381, 385 n.6 (1978)) . The Court of
Appeals
has
i n s t ru c t ed
[ j ] u s t
as
a
not i ce
of appeal
from
a
f i na l
judgment
br ings up
fo r
review a l l
reviewable
ru l ings which produced
the
judgment, a
d i s p o s i t i v e order c lea r ly
in tended to end a
l i t i g a t i o n should
have a s im i l a r e f f e c t [ . )
SongByrd
Inc.
v.
Esta t e
of
Grossman, 206 F.3d
172, 178 (2d
Cir .
2000}
( in te rna l
c i t a t i ons
and
quota t ions omi t t ed) .
Here,
the
Court
i s sued the
Stay
Order based
on
t he
Government 's consent to
s tay enforcement o f
the Ju ly 31
Order.
(See Stay Order .)
Beyond t h i s ,
Microsof t
po in t s to the
Confirmat ion
Order
and
the
Clerk of Cour t ' s prompt forwarding
of
10
!"#$ &'&()*+),-.&/)01 2345*$67 8, 9:;$< ,.=-8=&/ >"?$ &, 3@ &/
8/11/2019 Microsoft Warrant Ruling
11/14
the i n s t an t c a se s
record
to the
Court
of
Appeals to suppor t
i t s
as s e r t i o n t h a t the Court in tended
the
July 31
Order
to be the
f i n a l
dec i s ion
in
t h i s
case. (Microsoft
Lt r .
a t
2.)
Las t , the
Court notes t ha t it
never
d i rec ted the
Clerk
of Court to close
t h i s
case .
The orde rs
and f ac t s
marshaled by
Microsof t do not
show
tha t
the Court
in tended the Ju ly 31
Order
to be
f i na l and
appealable .
Fi r s t , while
the
Ju ly 31 Order
disposed of the
immediate
ques t ions of
law
in
t h i s
case,
it
did not ,
as
expla ined above,
dispose
of the
Cour t s cont inued
j u r i s d i c t i o n
over
the Warran t s enforcement . Second, the Stay Order merely
confirmed the
Government s
temporary
fo rbea r ing
of
i t s r igh t to
s tay enforcement
of the
orde r it secured.
That
i s why
the
Court
had
to
make
the
i n s t an t inqui ry in evalua t ing the Government s
app l ica t ion
to
li t
the
s tay .
Next,
the
Confirmat ion
Order
i s
a
fo rmal i ty i n tha t it was used
to
memorial ize the Co u r t s
Ju ly 31
Order
as a
readable docket
en t ry .
The
Clerk
o f Co u r t s
forwarding o f
the
case
record
i s
another
such admin i s t ra t ive
s tep .
F ina l ly , the
f ac t
the Court has
not c losed t h i s case
cuts
aga ins t M ic rosof t s argument. Cf. Vona
v .
Cnty.
of
Niagara ,
119
Even
i f ,
assuming
arguendo,
the Court did
t h i s fo r
the so le
purpose
of al lowing Microsof t to
docket
i t s no t ice of appeal ,
the
i n s t an t r e s u l t would not change. Aiding a l i t i g a n t in
complet ing a
f i l i n g
cannot be
equated
to an endorsement of the
meri t
o f such a f i l i ng .
!"#$ &'&()*+),-.&/)01 2345*$67 8, 9:;$< ,.=-8=&/ >"?$ && 3@ &/
8/11/2019 Microsoft Warrant Ruling
12/14
8/11/2019 Microsoft Warrant Ruling
13/14
any cour t o rde r
determining
how
the
law
app l i e s
to a spec i f i c
case
can
be
viewed
as a dec la ra to ry
judgment
ac t i o n .
But 28
u s c
1291
and
much
case
law
makes
c lea r tha t
only
f ina l
orde rs are
appealable .
To accept t h i s
argument
would be
to
al low
pa r t i e s
to make
an
end
run
around
the
f i n a l i t y requirement
s t r e s s ed by
cases
l i k e Ryan and Punn. Accordingly, because the
i n s t an t case cannot be
repackaged
i n to a d ec l a ra to ry judgment
ac t ion ,
the
Ju ly
31 Order i s
not
f ina l
and
appea lab le
on t h i s
b as i s .
Microsof t a l so argues
t ha t the
Ju ly
31 Order
could be
viewed
as
a
d ec l a ra t i o n
pursuan t
to the Ad minis t ra t ive Procedure Act,
5
U.S.C.
702 2) C).
Microsoft
Lt r .
a t 4 .
But t f a i l s
to
exp la in
how
t h i s s t a t u t e
i s re l evan t to
the i n s t an t case ,
a
c r imina l
proceeding . Because the Court can
f ind no
reason ,
t h i s
argument i s a l so unpersuasive.
13
!"#$ &'&()*+),-.&/)01 2345*$67 8, 9:;$< ,.=-8=&/ >"?$ &( 3@ &/
8/11/2019 Microsoft Warrant Ruling
14/14
I I I
ON LUSION
For
the foregoing reasons , the Government s mot ion [dkt .
no.
82) to
li t
the s t ay
in
execut ion
of
the
Co u r t s
Ju ly
31,
2014
orde r
i s
GRANTED
The pa r t i e s sha l l
confe r and
inform
the Court by
j o i n t
l e t t e r no l a t e r
than
September 5, 2014 as to how t hey propose to
proceed.
SO
ORDERED
Dated:
New York, New York
August 4 t
2014
LORETTA A PRESKA
Chief Uni ted Sta t e s
D i s t r i c t
Judge
14
!"#$ &'&()*+),-.&/)01 2345*$67 8, 9:;$< ,.=-8=&/ >"?$ &/ 3@ &/