I was afraid this was going to happen, after Microsoft became one of the primary supporters of the CLOUD Act recently. https://blogs.microsoft.com/on-the-issues/2018/03/21/microso... It's also the second time in the last few months that Microsoft has settled with the government instead of pushing forward the privacy fight. The government pinky-promised that it wouldn't abuse the gag orders anymore, and that's all it…
The law changed and the case now lacks merit. The legal question at issue in the SCotUS case can't magically include the CLOUD Act. That's not how the courts work. Microsoft will have to start over and file complaints against data requests under the CLOUD Act, but since that involves a different question of law this case before SCotUS is moot. Regardless of the decision in this case, the Federal government could just make another request under the CLOUD Act.