U.S. Department of Justice. U.S. Department of Justice in Washington, D.C. Photo by Diego M. Radzinschi/ALM.

Chalk it up as a win for litigious tech companies. Microsoft, no stranger to taking the U.S. government to court, is claiming partial victory in its quest to rein in federal “gag orders,” which prevent tech companies from notifying customers when their data is accessed by federal law enforcement.

Such gag orders are allowed under Section 2705 of the Stored Communications Act, and while many orders are time-limited, some can remain in effect indefinitely. Microsoft fought such orders in court on grounds they violate its clients First and Fourth Amendment rights. The company dropped its case, however, when the U.S. Department of Justice announced a new policy curtailing the indefinite use of gag orders.

But while hailed by many as a step in the right direction, the DOJ policy change isn't a panacea for the legal issues posed by gag orders, and doesn't completely ensure that these orders won't be challenged again in the future.

The DOJ policy was documented in a memo from U.S. Deputy Attorney General Rod Rosenstein. Among other steps, it limits such gag order duration to “one year or less,” barring “exceptional circumstances.” In such circumstances federal prosecutors may seek to extend the duration of the gag orders “only with the written concurrence of a supervisor designated by the United States attorney or the appropriate assistant attorney general, based upon facts and concerns that support a longer delay.”

Chris Calabrese, vice president for policy at the Center for Democracy & Technology (CDT) praised the policy as “a real difference” from how gag orders were executed in the past. But he noted that how companies react to the new policy will in large part depend on how it is adopted.

In theory, the policy may still allow for long-term or potentially indefinite gag orders should such orders be consistently renewed. However, If there is robust enforcement and good faith “to limit gags to as long as necessary to satisfy the government's interest, then that will be an important protection,” Calabrese said. But if that “doesn't prove to be the case, you certainly could see more lawsuits.”

For Andrew Pincus, partner at Mayer Brown and a former assistant to the DOJ solicitor general, it's too early to tell if the policy will address all concerns companies have. “I think everyone is going to have a 'watch and see' attitude and will wait to see how things develop.”

But John McKay, a former U.S. attorney for the Western District of Washington who now leads the government investigations and crisis management group at Davis Wright Tremaine, said that it is encouraging that the policy change is being taken seriously by those at the DOJ.

“This policy is being added to the U.S. Attorneys' Manual,” he noted. “And all of us who have served as federal prosecutors know the importance of the U.S. Attorneys' Manual. It is binding policy, it is the way in which federal prosecutors are required to do business.”

Even if the policy is executed in good faith, however, there is still the prospect of additional legal challenges. “I suspect this will result in far fewer lawsuits, but no one can guarantee someone isn't going to sue over the one-year time limit now,” McKay said.

Indeed, though Microsoft dismissed its lawsuit, it left the door open to future litigation.

“We applaud the Department of Justice for taking these steps, but that doesn't mean we're done with our work to improve the use of secrecy orders,” Microsoft president and chief legal officer Brad Smith wrote in a blog. “We have been advocating for our customers before the DOJ for a long time, and we'll continue to do that. We will continue to turn to the courts if needed.”

After all, as significant as the policy change may be, it still does not offer a definitive answer on whether gag orders pose constitutional issues in the first place.

Pincus, however, believes the change makes it less likely that these orders may infringe on its targets' constitutional rights. On one end of the spectrum, he explains, is the government's ability to execute gag orders indefinitely, a stance he called “very problematic for them to defend.”

“I think the good news of this new government policy is that it should move the government a considerable way down the spectrum, away from those totally unjustified practices and toward limited duration,” he said.

Still, many see the policy itself as insufficient, and highlight the need for Congress to step in to update the laws governing such orders

“The DOJ, the executive branch, has looked at this and changed its policy. And now the question is, is the SCA in need of amendment? And I think it's clearly in need of review in Congress and it should be looked at,” McKay said.

Calabrese agreed, noting that the DOJ policy is no “substitute for statutory changes, which we have long called for.”

For its part, Microsoft has also called on Congress to amend the Electronic Communications Privacy Act (ECPA)—of which the SCA is a part. In a blog post, Smith advised the U.S. Senate to pass the ECPA Modernization Act of 2017, noting that the “bill includes a provision that addresses secrecy orders”

Action by the Senate, he added, “would build on the bipartisan work of the U.S. House of Representatives, which has twice passed ECPA reform legislation.”

U.S. Department of Justice. U.S. Department of Justice in Washington, D.C. Photo by Diego M. Radzinschi/ALM.

Chalk it up as a win for litigious tech companies. Microsoft, no stranger to taking the U.S. government to court, is claiming partial victory in its quest to rein in federal “gag orders,” which prevent tech companies from notifying customers when their data is accessed by federal law enforcement.

Such gag orders are allowed under Section 2705 of the Stored Communications Act, and while many orders are time-limited, some can remain in effect indefinitely. Microsoft fought such orders in court on grounds they violate its clients First and Fourth Amendment rights. The company dropped its case, however, when the U.S. Department of Justice announced a new policy curtailing the indefinite use of gag orders.

But while hailed by many as a step in the right direction, the DOJ policy change isn't a panacea for the legal issues posed by gag orders, and doesn't completely ensure that these orders won't be challenged again in the future.

The DOJ policy was documented in a memo from U.S. Deputy Attorney General Rod Rosenstein. Among other steps, it limits such gag order duration to “one year or less,” barring “exceptional circumstances.” In such circumstances federal prosecutors may seek to extend the duration of the gag orders “only with the written concurrence of a supervisor designated by the United States attorney or the appropriate assistant attorney general, based upon facts and concerns that support a longer delay.”

Chris Calabrese, vice president for policy at the Center for Democracy & Technology (CDT) praised the policy as “a real difference” from how gag orders were executed in the past. But he noted that how companies react to the new policy will in large part depend on how it is adopted.

In theory, the policy may still allow for long-term or potentially indefinite gag orders should such orders be consistently renewed. However, If there is robust enforcement and good faith “to limit gags to as long as necessary to satisfy the government's interest, then that will be an important protection,” Calabrese said. But if that “doesn't prove to be the case, you certainly could see more lawsuits.”

For Andrew Pincus, partner at Mayer Brown and a former assistant to the DOJ solicitor general, it's too early to tell if the policy will address all concerns companies have. “I think everyone is going to have a 'watch and see' attitude and will wait to see how things develop.”

But John McKay, a former U.S. attorney for the Western District of Washington who now leads the government investigations and crisis management group at Davis Wright Tremaine, said that it is encouraging that the policy change is being taken seriously by those at the DOJ.

“This policy is being added to the U.S. Attorneys' Manual,” he noted. “And all of us who have served as federal prosecutors know the importance of the U.S. Attorneys' Manual. It is binding policy, it is the way in which federal prosecutors are required to do business.”

Even if the policy is executed in good faith, however, there is still the prospect of additional legal challenges. “I suspect this will result in far fewer lawsuits, but no one can guarantee someone isn't going to sue over the one-year time limit now,” McKay said.

Indeed, though Microsoft dismissed its lawsuit, it left the door open to future litigation.

“We applaud the Department of Justice for taking these steps, but that doesn't mean we're done with our work to improve the use of secrecy orders,” Microsoft president and chief legal officer Brad Smith wrote in a blog. “We have been advocating for our customers before the DOJ for a long time, and we'll continue to do that. We will continue to turn to the courts if needed.”

After all, as significant as the policy change may be, it still does not offer a definitive answer on whether gag orders pose constitutional issues in the first place.

Pincus, however, believes the change makes it less likely that these orders may infringe on its targets' constitutional rights. On one end of the spectrum, he explains, is the government's ability to execute gag orders indefinitely, a stance he called “very problematic for them to defend.”

“I think the good news of this new government policy is that it should move the government a considerable way down the spectrum, away from those totally unjustified practices and toward limited duration,” he said.

Still, many see the policy itself as insufficient, and highlight the need for Congress to step in to update the laws governing such orders

“The DOJ, the executive branch, has looked at this and changed its policy. And now the question is, is the SCA in need of amendment? And I think it's clearly in need of review in Congress and it should be looked at,” McKay said.

Calabrese agreed, noting that the DOJ policy is no “substitute for statutory changes, which we have long called for.”

For its part, Microsoft has also called on Congress to amend the Electronic Communications Privacy Act (ECPA)—of which the SCA is a part. In a blog post, Smith advised the U.S. Senate to pass the ECPA Modernization Act of 2017, noting that the “bill includes a provision that addresses secrecy orders”

Action by the Senate, he added, “would build on the bipartisan work of the U.S. House of Representatives, which has twice passed ECPA reform legislation.”