Michael E. Rose, OSB#753221

E-mail: mrose@civilrightspdx.com 

CREIGHTON & ROSE, P.C.

300 Powers Building

65 S.W. Yamhill Street

Portland, Oregon 97204 

Phone: (503) 221-1792

Fax: (503) 223-1516

Of Attorneys for Gary Hunt

IN THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF OREGON

Portland Division

UNITED STATES OF AMERICA,

Plaintiff, 3:16-cr-00051-BR

v. MEMORANDUM OF LAW:

REPLY

AMMON BUNDY, et al.,

Defendants.

GARY HUNT,

Respondent.

CERTIFICATE OF COMPLIANCE

This Memorandum of Law complies with the applicable word-count limitation under LR

7-2(b) because it contains 2250 words, including headings, footnotes, and quotations, but

excluding the caption, table of contents, table of cases and authorities, signature block, exhibits,

and any certificates of counsel.

 65 SW Yamhill St. #500 

 Portland, OR 97204-3316 

 T. (503) 221-1792 

 F. (503) 223-1516 

 mrose@civilrightspdx.com 

ATTORNEYS

AT LAW

 CREIGHTON

 &ROSE, PC 

PAGE 1 – MEMORANDUM OF LAW: REPLY
INTRODUCTION

There are two truths underlying the analysis of this case. The first is that the court has the

undoubted power and authority to enforce its judgments and orders. The second is that the

exercise of that power and authority is constrained by the Fifth Amendment due process clause.

See, e.g., Red 1 Invs., Inc. v. Amphion Int’l Inc., 2007 U.S. Dist. LEXIS 85675, *8 (E.D.Wash.

2007). As a general matter, neither of those propositions should be at all troubling. 

In this case, respondent Hunt does not dispute the authority of the court to issue

protective orders or to seek to enforce compliance with such orders order by way of contempt

proceedings. His dispute, rather, is whether the court had the jurisdiction over his person to issue

such an order directed to him in this case and to enforce such order.

DISCUSSION

While it may have been discussed previously in a rule-oriented context, the limitation on

the court’s personal jurisdiction is not based in particular on the federal rules of civil or criminal

procedure or any statutory provision but on one of the core concepts embedded in the due

process clause, namely, the extent to which a court – any court – can exercise its personal

jurisdiction over an individual. The first prerequisite of due process is that the individual must

maintain or have had a certain minimum level of contact with the forum jurisdiction. See, e.g.,

Pennoyer v. Neff, 95 U.S. 714, 24 L. Ed. 565, 5 Otto 714 (1878); Int’l Shoe Co. v. Wash., 326

U.S. 310, 66 S.Ct. 154, 90 L.Ed. 95 (1945). 

To briefly recapitulate, for an individual to be subject to general in personam jurisdiction,

the person “must have such continuous and systematic contacts with the forum that the exercise

 65 SW Yamhill St. #500 

 Portland, OR 97204-3316 

 T. (503) 221-1792 

 F. (503) 223-1516 

 mrose@civilrightspdx.com 

ATTORNEYS

AT LAW

 CREIGHTON

 &ROSE, PC 

PAGE 2 – MEMORANDUM OF LAW: REPLY
of jurisdiction does not offend traditional notions of fair play and substantial justice.” Reebok

Int’l v. McLaughlin, 49 F.3d 1387, 1391 (9th Cir. 1995), citing Core-Vent Corp. v. Nobel Indus.

AB, 11 F.3d 1482, 1485 (9th Cir. 1993); see Lake v. Lake, 817 F.2d 1416, 1420-21 (9th Cir.

1987). Absent such continuous and systematic contacts, a three-part test has been applied to

determine whether the defendant has sufficient connection with the forum to sustain personal

jurisdiction as a due process matter.

“(1) The nonresident defendant must purposefully direct his activities or

consummate some transaction with the forum or resident thereof; or perform

some act by which he purposefully avails himself of the privilege of conducting

activities in the forum, thereby invoking the benefits and protections of its laws;

(2) the claim must be one which arises out of or relates to the defendant’s

forum-related activities; and (3) the exercise of jurisdiction must comport with

fair play and substantial justice, i.e. it must be reasonable.”

Lake, 817 F2d at 421; reiterated in Core-Vent, 11 F.3d at 1485; Reebok, 49 F.3d at 1391. The

first two parts of the test determine whether there are sufficient “minimum contacts” between the

individual and the forum jurisdiction; the third considers whether jurisdiction in the particular

case is, nonetheless, consistent with the fundamental fairness guarantee of the due process

clause. 

In the narrower case of jurisdiction regarding alleged contempt for violation of a court’s

order by a nonparty who resides outside the territorial jurisdiction of a district court, minimum

contacts sufficient to subject the person to that court’s jurisdiction may also be found if, with

actual notice of the court’s order, the person actively aids and abets a party in violating the order.

Id. As to the fairness component of the due process analysis, “[h]aling a person into court only

upon finding that the nonparty has aided in knowingly violating an injunction fulfills traditional

notions of fair play and substantial justice because it is foreseeable that the person would be

 65 SW Yamhill St. #500 

 Portland, OR 97204-3316 

 T. (503) 221-1792 

 F. (503) 223-1516 

 mrose@civilrightspdx.com 

ATTORNEYS

AT LAW

 CREIGHTON

 &ROSE, PC 

PAGE 3 – MEMORANDUM OF LAW: REPLY
required to respond in that forum.” Red 1, 2007 U.S. Dist. LEXIS 85675, *10-11, citing

Waffenschmidt, 763 F.2d at 721.

The government has submitted, in response to Mr. Hunt’s objection to jurisdiction, two

decisions rendered by Judge Panner in the case of In re Alpha Telecom, Inc., CV 01-1283-PA,

issuing, in chronological order, a Temporary Restraining Order, on 18 December, 2008, and an

Order finding Ernest Bustos, et al., in Contempt, on 1 July, 2009 (Dkt. 2079-1). These two

decisions are later entries in the docket of an ongoing case, the history of which provides some

needed context for the submission.

In 2001, the SEC filed suit against Alpha Telecom, of Medford, OR, and its

president/owner Rubera, for running what the court described as a Ponzi-like scheme for sales

and service of pay telephones. The scheme involved getting people to invest in Alpha, and

guaranteeing a 14% return on investment. Ernesto Bustos was a paid promoter of the scheme.

The court found that the “investment opportunity” offered by Alpha Telcom was a “security” for

purposes of the Securities Act of 1933 (“the Act”) and that Alpha Telcom had violated § 5 of the

Act by failing to register the securities with the SEC prior to selling them in interstate commerce.

As a result, Alpha and its owner were enjoined from any further solicitations or sales and were

ordered to repay its understandably unhappy investors in the amount of some $3,750,707.66, a

Receiver being appointed to facilitate that process. SEC v. Alpha Telcom, Inc., 187 F. Supp. 2d

1250, 1258 (D. Or. 2002), affirmed sub nom. SEC v. Rubera, 350 F.3d 1084 (9th Cir. 2003). 

On December 23, 2003, approximately two weeks after the court decided Rubera, the

Receiver filed a motion to disgorge some $21 million in commissions on the sales of these

unregistered securities from Alpha Telcom’s sales agents, including Bustos, none of whom had

 65 SW Yamhill St. #500 

 Portland, OR 97204-3316 

 T. (503) 221-1792 

 F. (503) 223-1516 

 mrose@civilrightspdx.com 

ATTORNEYS

AT LAW

 CREIGHTON

 &ROSE, PC 

PAGE 4 – MEMORANDUM OF LAW: REPLY
been a party to the previous round of litigation. The agents, including Bustos, sought

intervention and argued, inter alia, that the district court did not have personal jurisdiction over

them. In response to their argument, Judge Panner made what amounted to findings of fact that

there were sufficient “minimum contacts” between Bustos and the forum to warrant the exercise

of the District Court’s personal jurisdiction:

The claims by the Receiver and the SEC (hereafter, “Plaintiffs”) are ancillary to

the Receivership this court is administering. This court necessarily has

jurisdiction over matters pertaining to that Receivership, and the assets thereof.

The Bankruptcy case also is situated in Oregon. In addition, Alpha Telcom was

based in Oregon, the agent’s sales contracts were with a company headquartered

in Oregon and contemplated an ongoing relationship, and the contracts specified

that Oregon law would govern any dispute. Finally, I note that nationwide service

is authorized in most securities law cases. See 15 U.S.C. § 77v(a); 15 U.S.C. §

78aa.

In re Alpha Telcom, Inc., CV 01-1283-PA, 2004 U.S. Dist. LEXIS 20002, *12-13. (D.Or. 2004).

Judge Panner further held that service on the defendant agents was sufficient, even if, perhaps,

formally wanting. Id. at *13-16. Having found personal jurisdiction, the Receiver’s motion for

disgorgement was granted on the merits. Id.

On appeal, the Ninth Circuit held that the district court lacked personal jurisdiction to

enter the disgorgement order against Bustos. The court engaged in a lengthy discussion of the

requirements for personal jurisdiction in cases such as this, SEC v. Ross, 504 F.3d 1130, 1138-9

(9th Cir. 2007), but, without any particular discussion of the question of minimum contacts in the

instant case, concluded that Bustos had not been properly served, so “the district court’s power

over him remained nothing more than a potentiality.” Id. at 1140. The court therefore vacated the

disgorgement order and remanded. Id. at 1151.

Shortly thereafter, and pertinent to the government’s submission, Bustos re-emerged, this

 65 SW Yamhill St. #500 

 Portland, OR 97204-3316 

 T. (503) 221-1792 

 F. (503) 223-1516 

 mrose@civilrightspdx.com 

ATTORNEYS

AT LAW

 CREIGHTON

 &ROSE, PC 

PAGE 5 – MEMORANDUM OF LAW: REPLY
time as the president of the “Payphone Owners Legal Fund Inc.” (“POLFI”), whose ostensible

purpose was to recoup the money for the defrauded Alpha Telecom investors. Of course, they

had to pay Bustos a sum of money up front for his efforts. It appears that Bustos had, among

other things, used the records of the Oregon court proceedings to identify victims of the Ponzi

scheme for him to target, and may have been interfering with the attempts of the court appointed

Receiver to get the investors’ money back. Judge Panner included a lengthy list of allegations in

his issuance of the TRO (Dkt. 2079-1, at 11-13), which ordered Bustos and POLFI to cease and

desist and to produce documents. Bustos did not cooperate quietly, or at all, and the contempt

proceeding ensued.

The only jurisdictional discussion in either of Judge Panner’s opinions that were

submitted was some general authority about the importance of the court’s inherent power to

“protect the integrity of its proceedings.” Dkt 2079-1, at 13-14. There was no discussion at all

about personal jurisdiction. 

On appeal, the Ninth Circuit, in an unpublished opinion, affirmed the order of the district

court holding that the district court did not abuse its discretion by holding Bustos in contempt.

The only mention of personal jurisdiction was significant. Consistently with Judge Panner’s

decision, the court concluded:

[T]he district court had jurisdiction to issue the Order to Show Cause. Bustos

brought himself within the district court’s jurisdiction by committing seven

purposeful acts in the forum that gave rise to this action.

SEC v. Rubera, 412 Fed. Appx. 980, 2011 U.S. App. LEXIS 1845 (9th Cir. 2011)(emphasis

added). The clear implication is that “minimum contacts” analysis is indeed a part of the in

personam jurisdictional calculus even in contempt cases. 

 65 SW Yamhill St. #500 

 Portland, OR 97204-3316 

 T. (503) 221-1792 

 F. (503) 223-1516 

 mrose@civilrightspdx.com 

ATTORNEYS

AT LAW

 CREIGHTON

 &ROSE, PC 

PAGE 6 – MEMORANDUM OF LAW: REPLY
The other cases cited by the government are not to the contrary. Again, the fundamental

issue is whether the actions of the individual that are alleged to be contemptuous bear a sufficient

connection with the forum to satisfy the due process minimum contacts requirement. Judge

Panner proceeded on that assumption, even if he may not have squarely held as much in Alpha

Telecom, 2004 U.S. Dist. LEXIS 20002, *12-13. Waffenschmidt v. MacKay, 763 F.2d 711, 716

(5th Cir. 1985), relied upon by the government – and the Ninth Circuit – in fact held that this

was the case, and “that nonparties who reside outside the territorial jurisdiction of a district court

may be subject to that court’s jurisdiction if, with actual notice of the court’s order, they actively

aid and abet a party in violating that order.” Red 1, 2007 U.S. Dist. LEXIS 85675 at *8

(emphasis added). In Reebok Intern. Ltd. v. McLaughlin, 49 F.3d 1387 (9th Cir. 1995), which

had been previously cited by the government, the Ninth Circuit, at least as a matter of dictum,

expressed its approval of the reasoning in Waffenschmidt. The other cases cited by the

government are entirely consistent, and, for that, entirely unremarkable.

It is important to keep in mind what those cases do not say. They don’t say that the court

has the unbridled authority to order anyone anywhere to abide by any court order under pain of

contempt. They do confirm that due process requires, at very least, a certain “minimum contact”

with the forum as well as adequate notice. 

This returns us to the underlying question of whether there are sufficient “minimum

contacts” between Mr. Hunt and this forum to support the court’s jurisdiction to have directed

the Supplemental Protective Order at him, in the first instance, or to have Ordered him to Show

Cause why he should not be held in contempt for its violation.

As was previously discussed in respondent’s Memorandum, and the supporting

 65 SW Yamhill St. #500 

 Portland, OR 97204-3316 

 T. (503) 221-1792 

 F. (503) 223-1516 

 mrose@civilrightspdx.com 

ATTORNEYS

AT LAW

 CREIGHTON

 &ROSE, PC 

PAGE 7 – MEMORANDUM OF LAW: REPLY
Declaration (Dkt. 2077), Mr. Hunt’s activities do not rise to the level of the minimum contacts

necessary to support jurisdiction. His writings and publication all took place in California, where

he has, at all relevant times, resided. Id. The digital publication of his writings was intended for a

broad, national readership and was not particularly directed at the forum state. See Wright v.

Yackley, 459 F.2d 287, 290 (9th Cir. 1972) (acts that are sufficient to establish minimum contacts

are those “performed by a nonresident for the very purpose of having their consequences felt in

the forum state.” (emphasis added). Mr. Hunt’s web postings were insufficient to establish the

requisite level of contact, since “a mere web presence is insufficient to establish personal

jurisdiction.” Brayton Purcell LLP v. Recordon & Recordon, 606 F.3d 1124, 1129 (9th Cir.

2010); see also Cybersell, Inc. v. Cybersell, Inc., 130 F.3d 414, 418 (9th Cir. 1997) (explaining

that a passive website that “does little more than make information available to those who are

interested in it” does not support specific jurisdiction over operators). 

As has been noted, the courts have also concluded that minimum contacts may be

established by showing that the individual with actual notice of the order actively “aided and

abetted” a party in violating the order. See Reebok, supra, citing Waffenschmidt; Red 1, supra, at

*8. There is no admissible evidence in the record that Mr. Hunt obtained any information from

anyone who was bound by the terms of the protective order, and there is nothing to suggest that

he aided or abetted anything or anyone else in any other relevant regard.1

///

///

1

 The Facebook postings of Mr. Ehmer are inadequate to prove, let alone demonstrate,

that Mr. Hunt was aiding or abetting the violation of the protective order or that he was subject

to the protective order in the first instance. 

 65 SW Yamhill St. #500 

 Portland, OR 97204-3316 

 T. (503) 221-1792 

 F. (503) 223-1516 

 mrose@civilrightspdx.com 

ATTORNEYS

AT LAW

 CREIGHTON

 &ROSE, PC 

PAGE 8 – MEMORANDUM OF LAW: REPLY
CONCLUSION

For all of the foregoing reasons, this court should determine that it has no jurisdiction

over either or both of the person of Mr. Hunt or the subject matter of this proceeding and dismiss

the within proceeding.

Respectfully submitted 8 May, 2017

/s/ Michael E. Rose 

Michael E. Rose, OSB #753221

Of Attorneys for Gary Hunt

 65 SW Yamhill St. #500 

 Portland, OR 97204-3316 

 T. (503) 221-1792 

 F. (503) 223-1516 

 mrose@civilrightspdx.com 

ATTORNEYS

AT LAW

 CREIGHTON

 &ROSE, PC 

PAGE 9 – MEMORANDUM OF LAW: REPLY