ZDNet reported that secure email service Lavabit and owner Ladar Levison lost its appeal at the US Court of Appeals today to lift sanctions that a district court has imposed in a ruling last year. Lavabit, who came into notoriety and federal radar when National Security Agency leaker Edward Snowden used the service for communications.

The Federal Bureau of Investigation had sought for Lavabit's help for information linking to Snowden, in particular, the private keys of the service itself for them to be able to monitor the whistleblower, ZDNet said. Levison insisted that by turning over the private keys, he risks compromising the privacy of the other users of the service.

Because of Levison and Lavabit refused to cooperate to a federal investigation, the FBI sought legal action against Lavabit in the US District Court. Despite the fact that the District Court ruled in favor of the federal agency, Lavabit refused to budge with the court's orders and was fined $5,000 a day for its defiance. Lavabit's insistence to protect its users and resistance to the investigation was lauded in a way that the company handed over the keys initially in paper in 4-point type. Moreover, the private keys in digital form were handed out after Lavabit had shut down its service and after informing its many users its plan to do so.

According to court documents filed with the Appeals court, Lavabit argued that the insistence of the government to obtain the service's private keys were abusive and oppressive in nature and was in conflict with the company's anti-government business model. Moreover, the government does not have any authorization to retrieve the keys under the Pen Register statute FBI had invoked to order Lavabit to do so. Lavabit also cited arguments under the Stored Communications Act and Fourth Amendment, ZDNet said.

The Appeals court said that it declined to examine the new arguments Lavabit have presented. As such, the Appeals court said that the contempt citation and fines are to be upheld.