The Supreme Court's decision today to review Microsoft's victory in the Second Circuit is further proof that Congress needs to act to update laws governing electronic communication.
A three-judge panel of the US Court of Appeals for the District of Columbia Circuit ruled against him on a 2-1 vote in August 2016.
The Justice Department filed a motion to take the case to the Supreme Court in June.
"We will continue to press our case in court that the Electronic Communications Privacy Act (ECPA)-a law enacted decades before there was such a thing as cloud computing-was never meant to reach within other countries' borders", Brad Smith, Microsoft's president and chief legal officer, wrote in a blog post.
USA authorities strongly criticized Microsoft's refusal, arguing "hundreds if not thousands of investigations. will be hampered".
The U.S. government had sought the emails in a drug trafficking investigation.
"If U.S. law enforcement can obtain the emails of foreigners stored outside the United States, what's to stop the government of another country from getting your emails even though they are located in the United States?"
"Neither explicitly nor implicitly does the statute envision the application of its warrant provisions overseas", Judge Susan Carney wrote.
Microsoft says its policy at the time of the search warrant was to store email content in the data center nearest to the customer's self-declared country of residence, while keeping account information on USA servers.
The Justice Department said in its appeal that the lower court ruling "gravely threatens public safety and national security" because it limits the government's ability to "ward off terrorism and similar national security threats and to investigate and prosecute crimes".
The Justice Department says the logic behind the appeals court decision would apply even if the account holder were a USA citizen living and committing crimes in this country. We intend to share this view with the Supreme Court as it confronts this important issue.
It contradicts the basic premise that before a USA statute reaches across another country's borders, it should be clear that's what Congress intended when it passed the law.
The case is United States v. Microsoft Corp.
In the appeals court, Microsoft was supported by dozens of technology and media companies including Amazon, Apple, CNN and Verizon Communications, as well as the American Civil Liberties Union and the U.S. Chamber of Commerce business group.