Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-azd-2_11-cv-00174/USCOURTS-azd-2_11-cv-00174-0/pdf.json

Nature of Suit Code: 510
Nature of Suit: Prisoner Petitions - Vacate Sentence
Cause of Action: 28:2255 Motion to Vacate / Correct Illegal Sentence

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 Although the Response, doc. 13, includes numerous references to material that can be

found in the criminal record, it rarely cites to specific docket entries. For example, the

Government’s Response describes the events pertaining to Movant’s alleged obstruction of

justice without a single citation to the record, see doc. 13 at 6-8. The Government’s extremely

limited citation to supporting documentation has hampered and made more difficult the Court’s

review of this § 2255 motion. The Court expects, and will order, more specific citations to the

record in future filings. 

IN THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF ARIZONA

United States of America, 

Plaintiff/Respondent, 

vs.

Jeffrey A. Kilbride, 

Defendant/Movant. 

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No. CV-11-174-PHX-DGC (LOA) 

 CR-05-870-PHX-DGC 

REPORT AND RECOMMENDATION

 This matter is before the Court on Movant’s Amended Motion to Vacate, Set Aside,

or Correct Sentence Pursuant to 28 U.S.C. § 2255. (Doc. 5) The Government has filed a

response1

 to which Movant has replied. (Docs. 13, 14) Accordingly, this matter is ripe for

review. For the reasons set forth below, the Motion to Vacate, Set Aside, or Correct Sentence

Pursuant to 28 U.S.C. § 2255 should be denied.

I. Procedural History 

On August 5, 2005, Movant and several co-defendants were indicted in the United

States District of Court, District of Arizona, on numerous counts pertaining to the electronic

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 Citations to “CR doc. __” are to the docket in CR-05-870-PHX-DGC.

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transmission of obscene images. (CR doc. 12) Movant’s case proceeded to a jury trial. On

June 25, 2007, Movant was convicted of one count of conspiring to commit fraud in

connection with electronic mail in violation of 18 U.S.C. § 371 (Count 1); two counts of

committing fraud in connection with electronic mail in violation of 18 U.S.C. §§ 1037(a)(3)

and (a)(4) (Counts 2 and 3), two counts of importation or transportation of obscene material

in violation of 18 U.S.C. § 1462 (Counts 4 and 5), two counts of transportation of obscene

material for sale or distribution in violation of 18 U.S.C. § 1465 (Counts 6 and 7), and one

count of conspiring to launder money in violation of 18 U.S.C. § 1956(h) (Count 8). (CR

docs. 1, 296)

On August 24, 2007, the Court denied Movant’s motion for judgment of acquittal

or, alternatively, for a new trial. (CR doc. 334); United States v. Kilbride, 507 F.Supp.2d

1051,1069 (D.Ariz. 2007). After conducting a sentencing hearing, the Honorable David G.

Campbell sentenced Movant to 78 months imprisonment followed by a three-year term of

supervised release. This sentence included a two-level enhancement for obstruction of

justice pursuant to U.S.S.G. § 3C1.1. (CR docs. 353, 358, 359) 

Movant’s convictions and sentences were based on the following activities. In

2003, Movant and co-defendant, James Schaffer, (collectively referred to as “Defendants”)

began “sending large volumes of unsolicited commercial emails, commonly referred to as

‘spam,’” to advertise pornography websites using as server in Phoenix, Arizona. Kilbride,

507 F.Supp.2d at 1055. Defendants commissioned and utilized a software program that

enabled them to design the content of an e-mail and then send that message in an e-mail to

millions of e-mail addresses in a single campaign. Id. When recipients opened Defendants’

spam e-mails, pornographic images were automatically displayed. Defendants received a

commission when recipients clicked on the links in the spam e-mails and spent money at the

advertised websites. Id.; United States v. Kilbride, 584 F.3d 1240, 1244-45 (9th Cir. 2009). 

After their business was established, Defendants became aware of pending legisCase 2:11-cv-00174-DGC Document 17 Filed 04/19/12 Page 2 of 20
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lation, including the Controlling the Assault of Non-Solicited Pornography and Marketing

Act of 2003, 15 U.S.C. § 7701 et seq. (“Can-Spam Act”), that would make their business a

criminal enterprise by prohibiting, among other things, “sending bulk commercial emails

that contain materially false header information.” Kilbride, 507 F.Supp.2d at 1055.

Defendants moved their e-mail operation overseas by logging on remotely to servers they set

up at a co-location facility in Amsterdam to send their pornographic, spam e-mail advertisements (“porn spam”). Id. at 1058-59. Defendants established an overseas business

structure that consisted of a shell corporation, Ganymede Marketing, Ltd. (“Ganymede”),

which was owned by a trust, which in turn had two beneficiaries in the form of two more

trusts held for Defendants’ benefit. Id. at 1059-60. Defendants established the structure in

Mauritius, an island off the coast of Madagascar, because of its favorable tax scheme and

absence of e-commerce laws. Defendants arranged for the positions of officers and directors

of Ganymede to be held by Laval Law, a Mauritian citizen, and Christopher Compton, a

United Kingdom citizen residing in the Isle of Man. Id. at 1060. Defendants, however,

controlled Ganymede and the trusts, and Law and Compton acted at Defendants’ direction. 

Id. at 1055-56, 1058-64. 

Co-conspirator Kirk Rogers testified that in 2003, he sent e-mails to a list of

approximately 17 million addresses, that grew to 35 million addresses by the end of Rogers’

involvement. Id. at 1062. Co-conspirator Jennifer Clason testified that “from the moment

[she] woke up until the moment [she] went to bed,” or approximately 14 hours per day, she

would send Defendants’ porn spam via five or six electronic bulk e-mail campaigns,

simultaneously advertising two different websites - for a total of 10 or 12 bulk porn spam emails sent to the people on the e-mail list every day. Clason testified that she used vague

phrases in the subject lines of Defendants’ porn spam e-mails including statements, such as,

“hi,” and “hey you.” Id. at 1063. Although the e-mails contained an opt-out link, recipients

who opted out were returned to Defendants’ mailing lists 30 days after opting out and, thus,

continued receiving Defendants’ porn spam e-mails. Id. at 1062. Images in Defendants’ bulk

porn spam e-mails included close-up images of sexual acts to advertise two websites. These

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images formed the basis for Defendants’ obscenity charges. Clason explained that Schaffer

directed her to use these images in e-mails and estimated she sent bulk e-mail campaigns

containing the two images approximately 40 times a day. Id. at 1062-63. 

Eight citizens, who received Defendants’ porn spam and complained to either

AOL or the Federal Trade Commission (“FTC”), testified as witnesses at trial regarding the

context in which the e-mails were received and their ensuing complaints. Some of these

individuals testified they complained about all types of spam, while others said it was the

hardcore and unsolicited nature of the images in Defendants’ e-mails that prompted them to

complain. Over 670,000 complaints made in 2004 about Defendants’ porn spam were

introduced into evidence at trial; 662,934 complaints to AOL and 8,272 complaints to the

FTC. Id. at 1064. Some who complained to the FTC wrote messages, asking the FTC to stop

Defendants’ unsolicited, unwanted, “disgusting,” “foul,” porn spam messages, which had

been received “from 10 to 15 [times] per day.” Id.

B. Laval Law and Injunction in Mauritius 

In a May 9, 2007 letter, sent via facsimile, the Government advised Laval Law that

it had determined that his testimony regarding his business relationship with Movant “would

be of significant assistance to the United States in its case in chief,” against Movant and codefendant Schaffer. (CR doc. 259-1 at 38) The Government requested that Law or his

attorney contact the Government by May 15, 2007. (Id.) On May 11, 2007, Law responded

that he was willing to assist the Government in its case against Movant. (CR doc. 259-1 at

39-41) However, Law stated that the laws of Mauritius limited his ability to discuss the trust

he had helped Defendants establish in Mauritius absent a court order. (Id.) In a May 12,

2007 faxed letter, the Government responded that it understood and accepted that limitation,

but still wanted to talk with Law regarding Ganymede. (CR doc. 259-1 at 42) In a May 25,

2007 letter, Law, through local Phoenix counsel Larry Palles, agreed to cooperate with the

Government in exchange for immunity from prosecution. (CR doc. 259-1 at 43-45) 

The Government states that it provided the May 12, 2007 letter to Defendants in

discovery on May 18, 2007. Law was also listed as a witness on the Government’s witness

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list, filed on May 30, 2007. (CR doc. 235) On May 26, 2007, Movant appointed Mauritius

attorney Ayesha Jeewa to act as his “agent and proxy to enter and/or defense any matter

before any court or tribunal in the Republic of Mauritius.” (CR doc. 259-1 at 14) On June 8,

2007, three days after trial started, Movant’s Mauritian counsel sought and obtained an ex

parte temporary injunction from the Supreme Court of Mauritius prohibiting Law from,

inter alia, “disclosing, communicating and testifying on the affairs of (a) the LBFM

Ventures Trust; (b) the Lightspeed Holdings Trust; (c) the PJ Investment Group Trust; (d)

Ganymede Marketing; and (e) the beneficiaries thereof . . under the laws of Mauritius.” (CR

doc. 259-1 at 1-3) Movant attached the correspondence between the Government and Law

to his Mauritian filing. (CR doc. 259, Exh. 1) 

According to the affidavit signed by Movant’s Mauritian attorney and filed with

the Supreme Court of Mauritius, “the agreement of [Law] to testify is in fact a violation of

the laws of Mauritius and same will cause [Movant] irreparable and immeasurable damage

which will never be compensated pecuniarily.” (CR doc. 259-1 at 12) In granting Movant’s

request for an injunction, the Honorable S.B. Domah of the Supreme Court of Mauritius

ordered Law “to appear before the Honorable Judge sitting in Chambers [on Monday the

11th day of June 2007 at 9:30 a.m.] to show cause why the interim order should not be made

interlocutory or discharged after hearing the parties.” (CR doc. 259-1 at 1) 

After receiving notice of the injunction, Law, who had agreed to accept service of

a subpoena to testify at Movant’s trial, appointed Mauritian counsel to act on his behalf there

and traveled to the United States as previously planned. Law arrived in Phoenix on June 10,

2007 and was scheduled to testify on Wednesday, June 13, 2007. Law informed the

Government that he feared being held in contempt in Mauritius if he continued cooperating. 

On June 11, 2007, another party to the injunction and Movant’s defense counsel agreed to a

continuance of the hearing on Movant’s Mauritius action until June 25, 2007, which

effectively left the injunction in place for the duration of Movant’s trial in this case. 

On June 11, 2007, based on the Mauritian injunction and Law’s concern about

cooperating with the Government, the Government moved for a protective order, clarifying

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that Law’s testimony would be limited to subjects he could legally discuss under Mauritian

law. (CR doc. 259) On the following day, the Court held a hearing on the motion. (CR doc.

261) During the hearing, evidence was presented that Movant’s counsel in Mauritius, Ms.

Jeewa, contacted Law, who was represented by counsel, directly and discouraged him from

testifying in Movant’s trial. The Government asserted that the Mauritian injunction was not

obtained lawfully because Kilbride lacked standing to assert rights regarding Ganymede, a

defunct corporation in 2005, which Kilbride did not own and was neither an officer nor an

employee thereof. Movant’s conduct in obtaining the injunction exposed Law to the risk of

contempt in Mauritius if he testified and in the United States if he did not testify. In

response, Movant agreed to contact his Mauritian counsel and request she seek a modification of the injunction in the Mauritian Supreme Court so that it would not apply to Law. 

Law’s local counsel, Mr. Palles, and the Government advised the Court that such a result

would be satisfactory. (CR Doc. 272)

The following day, Law’s local counsel requested another hearing regarding the

Mauritian injunction. Mr. Pelles argued that, contrary to Movant’s representation that he

would file a document in the Supreme Court of Mauritius stipulating to lifting the Mauritius

injunction against Law, Movant’s Mauritian counsel filed a letter, suggesting that the

District Court had coerced Movant into withdrawing the injunction with respect to Law. 

(CR doc. 264 at 2; CR doc. 272 at 3-7) The Court took the matter under advisement to

consider the Government’s request that it exempt Law from testifying and give a spoilation

instruction to the jury if the injunction remained in place. (CR doc. 272) On June 14, 2007,

Movant’s Mauritian counsel was successful in lifting the injunction against Law, which

allowed Law to meet with Government counsel and testify at Movant’s trial pursuant to his

agreement to do so. (CR doc. 265); Kilbride, 584 F.3d at 1261-62. 

C. Direct Appeal

Movant appealed his convictions and sentences to the Ninth Circuit Court of

Appeals, raising several grounds for relief including: (1) the Court erred in instructing the

jury regarding the definition of “obscene” too narrowly defined the “contemporary

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community standards,” which allowed the jury to determine the physical boundaries of the

relevant geographical community and did not require the jury to apply the standards of a

“national community”; (2) his conviction for conspiracy to commit money laundering

(Count 8) should be vacated because of the lack of a predicate-offense felony conviction;

and (3) the Court erred in applying a sentencing enhancement under U.S.S.G. § 3C1.1 for

obstruction of justice. The Ninth Circuit affirmed Movant’s convictions and remanded for

the correction of a clerical error in the written judgment regarding the classification of the

convictions on Counts 1, 2, and 3. (CR doc. 532); Kilbride, 584 F.3d at 1240 

With respect to Movant’s claim that the jury should have been instructed to

consider whether the e-mails were obscene under a national community standard, the

appellate court agreed that the district court should have instructed the jury to apply a

“national community” standard based on the holding of the Supreme Court in Ashcroft v.

ACLU, 535 U.S. 564 (2002). The appellate court, however, found that the error, which was

not raised at trial, was “far from plain,” and thus not reversible. Kilbride, 584 F.3d at 1251,

1255. With respect to Movant’s challenge to the money laundering conspiracy convictions,

the court agreed that the jury instructions created “serious ambiguity” as to what findings of

predicate criminal activity were required to support a conviction. Id. at 1261. However, the

court found that this error had no impact on the proceedings because the evidence at trial

showed beyond a reasonable doubt that Movant committed felony-level violations of 18

U.S.C. § 1037. Id. Thus, the error did not require reversal. In response to Movant’s

obstruction-of-justice sentencing enhancement, the Ninth Circuit held that the district court

did not err, as the “undisputed factual findings of the district court with regard to the timing

of Kilbride’s Mauritius lawsuit” fully supported the application of the obstruction-of-justice

enhancement. Id. at 1262. 

Thereafter, Movant filed a timely Amended Motion to Vacate, Set Aside, or

Correct Sentence pursuant to 28 U.S.C. § 2255, raising three grounds for relief, all based on

ineffective assistance of trial counsel. The Government has responded in opposition to the

Amended § 2255 Motion, and Movant has replied. For the reasons set forth below, Movant’s

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§ 2255 Amended Motion should be denied. 

II. Analysis

A. Ineffective Assistance of Counsel

To establish ineffective assistance of counsel, Movant must establish that: (1)

counsel’s representation fell below an objective standard of reasonableness; and (2) he was

prejudiced thereby. Strickland v. Washington, 466 U.S. 668, 688-692 (1984)). To be

deficient, counsel’s performance must fall “outside the wide range of professionally

competent assistance.” Id. at 690. When reviewing counsel’s performance, the court

engages a strong presumption that counsel rendered adequate assistance and exercised

reasonable professional judgment. Id. “A fair assessment of attorney performance requires

that every effort be made to eliminate the distorting effects of hindsight, to reconstruct the

circumstances of counsel’s challenged conduct, and to evaluate the conduct from counsel’s

perspective at the time.” Id. at 689. Review of counsel’s performance is “extremely limited.” 

Coleman v. Calderon, 150 F.3d 1105, 1113 (9th Cir. 1998), rev’d on other grounds, 525

U.S. 141 (1998). The standard for judging counsel’s representation is a most deferential one. 

It is “all too tempting” to “second-guess counsel’s assistance after conviction or adverse

sentence.” Strickland, 466 U.S. at 689. “The question is whether an attorney’s representation amounted to incompetence under ‘prevailing professional norms,’ not whether it

deviated from best practices or most common custom.” Harrington v. Richter, ___ U.S.___,

131 S.Ct. 770, 788 (2011) (quoting Strickland, 466 U.S. at 690). 

To establish a Sixth Amendment violation, a petitioner must also establish that he

suffered prejudice as a result of counsel’s deficient performance. Strickland, 466 U.S. at

691-92. To show prejudice, a petitioner must demonstrate a “reasonable probability that, but

for counsel’s unprofessional errors, the result of the proceeding would have been different. 

A reasonable probability is a probability sufficient to undermine confidence in the

outcome.” Id. at 694. It is not enough “to show that the errors had some conceivable effect

on the out-come of the proceeding.” Id. at 693. Counsel’s errors must be “so serious as to

deprive the defendant of a fair trial, a trial whose result is reliable.” Id. at 687. 

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“‘Surmounting Strickland’s high bar is never an easy task.’” Richter, 131 S.Ct. at

788 (quoting Padilla v. Kentucky, 559 U.S___, 130 S.Ct. 1473,1485 (2010)). As discussed

below, Movant’s claims of ineffective assistance of counsel fail. 

B. Ineffective Assistance of Counsel - Obscenity Jury Instructions

In Ground One, Movant argues that trial counsel was ineffective for failing to

propose an instruction that would have advised the jury that obscenity distributed via e-mail

must be considered according to a national community standard. (Doc. 5 at 5, Doc. 6 at 6) 

Before trial, the Court heard argument regarding the proposed jury instructions

pertaining to obscenity. (CR doc. 427) The Court instructed the jury, in relevant part, that:

To prove an image is obscene, the government must satisfy a three-part test;

One, that the average person, applying contemporary community standards,

would find that the image as a whole appeals primarily to prurient interests;

Two, that it depicts or describes sexual conduct in a patently offensive way;

And, three, that the image taken as a whole lacks serious literary, artistic,

political or scientific value.

To appeal to a prurient interest is an appeal to a morbid, degrading, and

unhealthy interest in sex, as distinguished from a mere candid interest in

sex. The first test for obscenity, therefore, is whether the predominant

theme or purpose of the image, when viewed as a whole, is to appeal to 

the prurient interest of an average person in the community. 

The second test is whether the image depicts or describes sexual conduct

in a patently offensive way. The Supreme Court of the United States has

given the following examples of materials which satisfy this requirement:

Patently offensive representations or descriptions of ultimate sexual acts, 

normal or perverted, actual or simulated; patently offensive representations

or descriptions of masturbation, excretory functions, and lewd exhibition of

genitals. 

These first two tests are to be decided applying contemporary community 

standards. This means that you should make the decision in light of 

contemporary standards that would be applied by the average adult in the 

community, with an average and normal attitude and interest in sex.

Contemporary community standards are set by what is in fact accepted

in the community as a whole; that is to say, by society at large or people 

in general, not merely by what the community tolerates nor by what some

persons or groups of persons believe the community as a whole ought to 

accept or refuse to accept. 

This decision should . . . not be based on your personal beliefs or opinions,

but on the standards accepted by the community as a whole. 

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* * *

The community you should consider in deciding these questions is not defined

by a precise geographic area. You may consider evidence of standards 

existing in places outside this particular district. 

The parties have presented evidence concerning contemporary community 

standards. You may consider the evidence presented but you may also 

consider your own experience and judgment in determining contemporary

community standards. 

(CR doc. 461 at 31-34) (emphasis added).

Movant challenged this jury instruction on direct appeal on the ground that,

“obscenity disseminated via email must be defined according to a national community

standard” because there is “no means to control where geographically their messages will be

received.” Kilbride, 584 F.3d at 1250-51. The Ninth Circuit found that the court should have

instructed the jury to apply a “national community” standard based on the “fractured”

holding of the Supreme Court in Ashcroft v. ACLU, 535 U.S. 564 (2002), which “most

directly addressed” Movant’s argument. Id. at 1252. However, the Ninth Circuit found that

the error, which was not raised at trial, was “far from plain, and thus not reversible. Id. at

1251,1255. Movant now argues that, because the Ninth Circuit found that the court should

have instructed the jury to apply a national community standard, trial counsel was

ineffective for failing to request such an instruction. Movant’s argument relies heavily on

hindsight as it is based on the Ninth Circuit’s analysis which, of course, was not available

until after Movant’s trial. The relevant inquiry under Strickland, however, “is not whether

another lawyer, with the benefit of hindsight, would have acted differently, but whether

counsel made errors so serious that counsel was not functioning as the ‘counsel’ guaranteed

the defendant by the Sixth Amendment.” Babbitt v. Calderon, 151 F.3d 1170, 1173 (9th Cir.

1998) (internal citations omitted); see also Siripongs v. Calderon, 133 F.3d 732, 736 (9th

Cir. 1998) (stating that “[t]he relevant inquiry under Strickland is not what defense counsel

could have pursued, but whether the choices made by defense counsel were reasonable.”). 

The Supreme Court decision upon which the Ninth Circuit relied addressed the

constitutionality of the Child Online Privacy Act (“COPA”), a successor law to the

Communications Decency Act, which regulated material “harmful to minors,” transmitted

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via the World Wide Web, “for commercial purposes.” Ashcroft v. ACLU, 535 U.S. 564, 569

(2002). The COPA identified materials harmful to minors using a test that relied on contemporary community standards. The Supreme Court held “COPA’s reliance on community

standards . . . does not by itself render the statute substantially overbroad for purposes of the

First Amendment.” Id., at 585 (emphasis in original). The Supreme Court’s decision, however, was fractured and did not include an “explicit holding as to the appropriate geographic

definition of contemporary community standards to be applied” in a case like Movant’s,

where obscenity is distributed via e-mail. Kilbride, 584 F.3d at 1253. On direct review in

this case, the Ninth Circuit, after engaging in a detailed discussion of the Justices’ varied

concurring opinions in Ashcroft, held that “a national community standard must be applied

in regulating obscene speech on the Internet, including obscenity disseminated via email.” 

Id. at 1254. The appellate court held that the district court’s error for failing to instruct the

jury to apply a national community standard was “far from plain” and noted that, prior to its

holding, “the relevant law in this area was highly unsettled with the extremely fractured

opinion in Ashcroft providing the best guidance. While our holding today follows directly

from a distillation of the various opinions in Ashcroft, our conclusion was far from clear and

obvious to the district court.” Kilbride, 584 F.3d at 1255. 

Here, Movant agrees that the Ninth Circuit’s decision was “distilled” from a

fractured Supreme Court’s reasoning in Ashcroft, finding agreement on the national

community standard from various concurring Justices and one Justice’s dissent. (Doc. 6 at 7-

8) In view of the unsettled nature of the law surrounding the relevant geographical

community for determining whether materials disseminated via e-mail were obscene at the

time of Movant’s trial, defense counsel’s performance was not deficient. See U.S. v.

Marshall, 6 Fed.Appx. 626, 627 (9th Cir. 2001) (finding that “[t]he law regarding the

definition of “knowingly” was unsettled at the time of [defendant’s] trial . . . and thus, the

district court correctly determined that [defense] counsel was not ineffective for failing to

object to the district court’s jury instructions.”). Defense counsel’s failure to request a

“national community standard” jury instruction was not objectively unreasonable where the

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law was unclear at the time of Movant’s trial, and on direct review, the appellate court stated

that its holding resulted from a distillation of an “extremely fractured” opinion, a conclusion

that was “far from clear and obvious.” Id. 

Moreover, even if defense counsel performed deficiently by failing to propose a

“national community standard” jury instruction, Movant has not established prejudice. 

Movant must establish, “a reasonable probability that, but for counsel’s unprofessional

errors, the result of the proceeding would have been different. A reasonable probability is a

probability sufficient to undermine confidence in the outcome.” Strickland, 466 U.S. at 694.

Here, as Movant recognizes, the district court did not limit defense counsel to presenting

arguments or evidence regarding the community standards of a precise geographical area. 

Indeed, as Movant states, “defense [counsel] argued during closings that the jury should

adopt an ‘expansive’ view of the relevant community and consider . . . materials available on

‘the entire worldwide web.’” (Doc. 6 at 9) The jury was presented with overwhelming

evidence that the images at issue were obscene, under either a national community standard

or a standard limited to Arizona. In addition to sending e-mails that included sexuallygraphic content, the e-mails containing those images were unsolicited and sent numerous

times a day. Kilbride, 507 F.Supp.2d at 1068, 1070. The jury was instructed that it could

consider the unsolicited nature of the e-mails in determining whether the content was

obscene. (CR doc. 461 at 34) (instructing that the jury, in determining whether the charged

materials were obscene, it could “consider the setting, or context, in which the materials

were presented,” including “the manner of distribution, and the circumstances of production,

sale, and advertising.”) Movant has not shown that he was prejudiced by counsel’s failure to

request a jury instruction on a national community standard, he has not shown that, but for

counsel’s failure to request such an instruction, there is a “reasonable probability that the

result of the proceeding would have been different.” Strickland, 466 U.S. at 687. 

Movant also argues that any error in the jury instructions was constitutional error,

requiring reversal, unless the error is found harmless beyond a reasonable doubt. (Doc. 6 at

6) (citing Chapman v. California, 386 U.S. 18, 24 (1967)). The Chapman standard does not

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apply to cases, such as this one, on collateral review. Rather, on collateral review, the court

assesses the prejudicial impact of most constitutional errors by determining whether they

“had substantial and injurious effect or influence in determining the jury’s verdict.” Brecht

v. Abrahamson, 507 U.S. 619, 623 (1993) (quoting Kotteakos v. United States, 328 U.S. 750,

776 (1946)); see also Fry v. Pliler, 551 U.S. 112 (2007) (Brecht standard applies whether or

not the state court recognized the error and reviewed it for harmlessness). Regardless, the

Brecht standard does not come into play unless the Court finds a constitutional error, which

the undersigned has not found in this case. Moreover, where a habeas petitioner alleges

ineffective assistance of counsel under Strickland v. Washington, 466 U.S. 668 (1984), the

Strickland prejudice standard applies and courts do not engage in a separate analysis

applying the Brecht standard. Avila v. Galaza, 297 F.3d 911, 918 n. 7 (9th Cir. 2002);

Musladin v. Lamarque, 555 F.3d 830, 835 (9th Cir. 2009).

B. Conspiracy to Commit Money Laundering Jury Instruction

In Ground Two, Movant alleges that trial counsel was ineffective for failing to

object to jury instruction Number 46 on what constitutes conspiracy to commit money laundering in violation of 18 U.S.C. § 1956(a)(2)(B)(i). (Docs. 5 at 6; 6 at 10) The district

court’s Jury Instruction Number 46 on what constitutes a violation of § 1956(a)(2)(B)(i)

provided, in pertinent part, that:

The person knows that the money represents the proceeds of some form of

unlawful activity, in this case, the a [sic] violation of 18 U.S.C. § 1037(a)(3)

or § 1037(a)(4) as set forth in Counts Two and Three of the Indictment[.]

* * *

To know that money involved in a financial transaction represents the

proceeds of some form of unlawful activity, the person must know that the

money represented proceeds from some form, though not necessarily which

form, of activity that constitutes a felony under State, Federal, or foreign

law.

(CR doc. 330 at 48)

On direct appeal, Movant challenged his conviction “under 18 U.S.C. § 1956(h)

for conspiracy to commit money laundering, asserting instructional error.” Kilbride, 584

F.3d at 1260. Because Movant did not challenge the § 1956 jury instruction at trial, the

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appellate court reviewed for plain error. Id. On direct appeal, the court noted that, “[t]hough

Count 8 of the Indictment charged the Defendants with conspiring to commit four different

money laundering offenses, the jury was instructed that Defendants allegedly conspired to

commit only one violation of 18 U.S.C. § 1956(a)(2)(B)(I).” Id. The Ninth Circuit found that

the jury was not adequately instructed on the requirements for finding a felony-level

violation of 18 U.S.C. § 1037, which was the predicate unlawful activity for the money

laundering conspiracy charge. Id., at 1261. However, the appellate court concluded that the

error was not “plain” and did not require reversal, because “it did not seriously affect the

fairness, integrity or public reputation of the proceedings.” Id. 

Movant has not shown that defense counsel’s failure to identify the ambiguity in

jury instruction Number 46 was objectively unreasonable. Counts 2 and 3 of the Indictment

specifically alleged the facts necessary to prove felony violations of 18 U.S.C. §§ 1037(a)(3)

and (a)(4). Jury instruction Number 47, referring to instruction Number 22, clarified that the

Government was not required to prove that an overt act occurred to convict Movant under

Count 8. (see CR doc. 330 at 23, 49) (“The government is not required to prove that the

defendant personally did one of the overt acts.”) The jury received a copy of the Indictment

for review during deliberations, and the jury heard Clason and Ellifson testify that they pled

guilty to felony CAN-SPAM violations. 

Even assuming counsel’s performance was deficient, Movant has not shown

prejudice necessary to satisfy the Strickland standard. Movant argues that the result of his

direct appeal would have been different had defense counsel objected at trial to jury instruction Number 46 because the issue could have been properly raised on direct appeal. (Doc. 5

at 6) Movant’s argument is based on the premise that, if trial counsel had objected to jury

instruction Number 46 as ambiguous, the Court would have overruled that objection and

given the same jury instructions. Then, appellate counsel could have challenged jury instruction Number 46 on direct appeal, and the appellate court would have reversed Movant’s

conviction. Movant’s argument is clearly speculative. He provides no evidence in support of

his assertion that the trial court would have taken no action had defense counsel objected to

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jury instruction Number 46. 

Moreover, in view of the overwhelming evidence presented at trial of Movant’s

guilt of the felony-level violation of § 1037, he has not shown that, but for counsel’s

deficient performance, there is a reasonable probability that the outcome of his trial would

have been different. Smith, 140 F.3d at 1268-69 (citing Strickland). As the Ninth Circuit

found, there was “uncontradicted testimony” showing that Movant was “transmitting emails

in volumes well exceeding 250,000 in 2004.” 584 F.3d at 1261. The appellate court further

found that the “evidence at trial shows beyond a reasonable doubt that Defendants

committed felony-level violations of § 1037” and the instructional error “had no impact on

the proceedings.” Id. In view of the foregoing, Movant’s claim of ineffective assistance

based on jury instruction Number 46 fails.

C. Sentencing Enhancement for Obstruction of Justice

In Ground Three, Movant asserts that trial counsel was ineffective for failing to

challenge the two-level sentencing enhancement for obstruction of justice. (Doc. 5 at 7)

Movant also asserts that trial counsel had a conflict of interest based on his attempts to

distance himself from the lawsuit filed in Mauritius that led to the application of the

obstruction-of-justice enhancement. (Doc. 6 at 15) Movant argues that this conflict of

interest resulted in ineffective assistance of counsel. 

Movant relies on Mickens v. Taylor, 535 U.S. 162 (2002) and Cuyler v. Sullivan,

446 U.S. 335, 347 (1980), which recognize that, although ineffective assistance of counsel

claims generally require the petitioner to show deficient representation and prejudice, the

court “forgo[es] individual inquiry into whether counsel’s inadequate performance

undermined the reliability of the verdict” in situations “where assistance of counsel has been

denied entirely or during a critical stage of the proceeding.” Mickens, 535 U.S. at 166. Such

circumstances may “arise when the defendant’s attorney actively represented conflicting

interests.” Id. at 166; see also Cuyler v. Sullivan, 446 U.S. 335, 348 (1980). 

The Ninth Circuit, however, has noted that the Supreme Court’s decisions in

Mickens and Sullivan are limited to conflicts of interest caused by the joint representation of

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two or more defendants, and do not apply to situations in which the attorney allegedly

possesses some internal conflict of interest. Earp v. Ornoski, 431 F.3d 1158, 1184 (9th Cir.

2004) (explaining the Supreme Court in Mickens noted that lower courts have applied

conflict-of-interest doctrine “unblinkingly to all kinds of alleged attorney ethical conflicts,”

but cautioning that Supreme Court law does not reach beyond joint representation.); see also

Foote v. Del Papa, 492 F.3d 1026, 1030 (9th Cir. 2007) (holding that “Mickens explicitly

concluded that Sullivan was limited to joint representation.”) (internal quotations omitted).

Because Movant does not allege a conflict of interest caused by joint representation of more then one defendant, to prevail on a claim of ineffective assistance based on

counsel’s alleged conflict, Movant must satisfy the Strickand test. See Earp, 431 F.3d at

1138 (noting that actual conflict-of-interest exceptions to Strickland’s requirements exist to

assure vindication of the Sixth Amendment right to counsel where Strickland itself is

“evidently inadequate,” but that Strickland otherwise applies.); Land v. Giurbino, 2009 WL

313544, at * 16 (C.D.Cal. Sept. 29, 2009) (holding that petitioner’s conflict-of-interest

habeas claim based on the attorney’s personal conflict of interest could not survive unless

petitioner satisfied Strickland). Movant has not satisfied Strickland’s requirements. He has

not shown that defense counsel’s conduct in handling the Mauritian lawsuit and injunction

“fell below an objective standard of reasonableness,” or that “there is a reasonable

probability that, but for counsel’s unprofessional errors, the result of the proceeding would

have been different.” Strickland, 466 U.S. at 694. 

First, Movant has not shown that counsel’s performance was deficient. Movant

has submitted several e-mails in support of his contention that defense counsel initiated the

Mauritian injunction, and therefore, his failure to advise the court of his personal involvement constitutes ineffective assistance. (Doc. 6) The e-mails to do not indicate whether

Movant or defense counsel initiated the Mauritian injunction. They do, however, indicate

that defense counsel participated in communications regarding the Mauritian injunction

during the month of the trial. Although defense counsel did not specifically discuss with the

court his own involvement in the Mauritian injunction, he argued against the obstruction-ofCase 2:11-cv-00174-DGC Document 17 Filed 04/19/12 Page 16 of 20
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justice sentence enhancement. On the fourth day of trial, June 12, 2007, the court discussed

the Mauritian injunction with counsel for Movant and the Government. (CR doc. 439 at 4) 

During this discussion, the Government expressed its concern that the Mauritian injunction

would “severely narrow” Law’s testimony. (Id. at 4-6) The Government also stated that

defense counsel had received notice on May 18, 2007 of the Government’s intention to call

Law to testify. (CR doc. 439 at 7) 

Defense counsel responded that the injunction was not limited to Law, but also

included Deutsche Bank and Inter Ocean Management Limited. (Id. at 8-9) Defense counsel

argued that the injunction was not filed with the intent to prevent Law from testifying, CR

doc. 284 at 9, but rather to ensure that Law’s testimony and the records from Deutsche Bank

and Inter Ocean Management Limited were not admitted in violation of the laws of

Mauritius. (CR doc. 439 at 9) Defense counsel also argued that the injunction was lawfully

obtained to ensure that the Government did not rely on a faulty certification of the Deutsche

Bank records. (CR doc. 439 at 8-9) As for the timing of the injunction, defense counsel

asserted that Movant had obtained an attorney in Mauritius “well over a year ago” to

identify potential violations of Mauritian law with regard to the banking records and Mr.

Law’s testimony, id. at 10, 12, 25, but that defense counsel was unaware that Mr. Law’s

testimony at trial would cover matters in violation of Mauritian law until after trial

commenced. (CR doc. 439 at 10-13) Defense counsel repeatedly emphasized that the

injunction was not intended to impede Law’s ability to testify. (Id. at 10, 12-13, 25) 

In addition to arguing that the Mauritian injunction was lawful during trial, before

sentencing defense counsel submitted a supplemental memorandum reiterating that an

obstruction-of-justice enhancement should not be imposed because the Mauritian injunction

was lawfully obtained from a foreign jurisdiction and was not intended to prevent Law from

testifying. (CR doc. 355 at 1-3) Defense counsel also opposed the enhancement based on

the lack of legal authority providing that a lawfully-issued court order could form the basis

of an obstruction-of-justice enhancement, CR doc. 355 at 4, and was based on the fact that

Law was not actually prevented from testifying. (CR doc. 355 at 2) 

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Defense counsel did not mention any personal involvement with the Mauritian

injunction, however, that omission does not render his performance objectively unreasonable. Strickland, 466 U.S. at 689. Defense counsel acted within the range of reasonable

professional assistance by submitting a memorandum to the court that included evidence and

argument against the court’s imposition of an obstruction-of-justice enhancement. See

United States v. Purviance, 2010 WL 4116640, * 1 (9th Cir. Oct. 19, 2010) (unpublished)

(finding that counsel was not ineffective despite defendant’s claim that he failed to present

the strongest available evidence to rebut a sentencing enhancement, where counsel

“adequately researched the case law” and “reasonably declined to call witnesses.”); Smith v.

Stewart, 140 F.3d 1263,1269 (9th Cir. 1998) (noting that “the mere failure to present

evidence at sentencing, as troubling as that may be on its face, does not result in a per se

finding of ineffectiveness.”). Despite Movant’s allegation that defense counsel failed to

present evidence of his personal knowledge, or alleged participation, in the Mauritian

injunction and, therefore, failed to make the “best possible argument” in Movant’s defense

at sentencing, counsel’s actions do not fall outside the “wide range of professional assistance.” Strickland, 466 U.S. at 689. Whether the best possible argument is made is not the

test for effective assistance, counsel’s assistance need not be “infallible.” United States v.

McAdams, 759 F.2d 1407, 1409 (9th Cir. 1985). 

Even if counsel’s performance was deficient, Movant has not established that he

suffered prejudice. To establish prejudice, Movant bears “the substantial burden of showing

that ‘there is a reasonable probability that, but for counsel’s unprofessional errors, the result

of the proceeding would have been different.’” United States v. Palomba, 31 F.3d 1456,

1461 (9th Cir. 1994) (quoting Strickland, 466 U.S. at 694). Defense counsel repeatedly

argued that Movant did not obstruct justice - that the Mauritian injunction was lawfully

obtained to protect confidential information, not to limit Law’s testimony. The Court

rejected counsel’s arguments, questioning how the affidavit that was filed for the Mauritian

injunction could be consistent with Movant’s claim that he did not know that Law would

testify until a few days before trial. (CR doc. 284 at 14) 

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Movant has not shown that there is a reasonable likelihood the result of his

sentencing would have been different had the court been aware of the defense counsel’s

alleged involvement in obtaining the Mauritian injunction. The record reflects that Movant’s

Mauritian counsel, whom he gave full authority to act on his behalf, obtained an injunction

on behalf of a defunct corporation Movant never owned, directed, or worked for, and that an

injunction against Law was obtained three days after trial started. (CR doc. 259-1 at 1-14,

34-35) Additionally, Movant’s affidavit for the injunction revealed his prior knowledge of

Law’s planned testimony, and that Movant’s Mauritian counsel - despite knowing that Law

was represented by legal counsel, contacted Law and discouraged him from coming to the

United States and testifying. (CR. doc. 259-1) Movant has not shown that there is a reasonable probability that, but for defense counsel’s failure to reveal to the Court additional

information about his alleged involvement in the Mauritian injunction, the result of

Movant’s sentencing would have been different.

III. Conclusion

Based on the foregoing, Movant’s § 2255 motion should be denied. 

Accordingly,

IT IS ORDERED that the Government’s counsel, Wendy Waldron or others,

must

provide more specific citations to the record in future filings. 

IT IS RECOMMENDED that Movant’s Amended Motion to Vacate, Set Aside,

or Correct Sentence pursuant to 28 U.S.C. § 2255, doc. 5, be DENIED. 

IT IS FURTHER RECOMMENDED that a Certificate of Appealability and

leave to proceed in forma pauperis on appeal be DENIED because Movant has not made a

substantial showing of the denial of a constitutional right. 

 This recommendation is not an order that is immediately appealable to the Ninth

Circuit Court of Appeals. Any notice of appeal pursuant to Rule 4(a)(1), Federal Rules of 

Appellate Procedure, should not be filed until entry of the District Court=s judgment. The

parties shall have fourteen (14) days from the date of service of a copy of this

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recommendation within which to file specific written objections with the Court. See 28

U.S.C. ' 636(b)(1); Rules 72, 6(a), 6(e), Federal Rules of Civil Procedure. Thereafter, the

parties have fourteen (14) days within which to file a response to the objections. Failure

timely to file objections to the Magistrate Judge’s Report and Recommendation may result

in the acceptance of the Report and Recommendation by the District Court without further

review. See United States v. Reyna-Tapia, 328 F.3d 1114, 1121 (9th Cir. 2003). Failure

timely to file objections to any factual determinations of the Magistrate Judge will be

considered a waiver of a party=s right to appellate review of the findings of fact in an order

or judgment entered pursuant to the Magistrate Judge’s recommendation. See Rule 72,

Federal Rules of Civil Procedure.

DATED this 19th day of April, 2012.

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